Is the contract you have agreed to really what you think?
Introduction
In this article I will be talking about contract law and the regulations regarding contract law. Many companies are scamming their consumers with contracts which their consumers don’t even read! Using this and taking it to their advantage. People need to understand the contracts as they may be going into something which they don’t know. Contract law is an agreement which protects consumers and gives them rights from a breach in contract. There are four principles which make a contract valid. Today, I will tell you your rights and what makes a fair contract so that you don’t fall into the trap that many people do every day.
What are the legal principles concerning offer, acceptance, consideration and intention to create legal relations?
For a contract to be valid there must be an offer, acceptance and a consideration. This makes an agreement which is an intention to create a legal relation.
An offer is something which someone provides willingness to do and agrees. On terms created by another party with no other negotiations done. The offer can be given in writing or in verbal. However, the contract needs to be addressed to the person to make a contract. Contracts are good to be in writing for evidence which avoids problems. An example of an offer is the fisher v bell case in (1961) where they had shop window displays.
An acceptance is when both parties have agreed and given consent to the terms of the offer. The acceptance can be done in verbal, written or by conduct. The important thing to remember with acceptance is that it is not valid until spoken with the offering party. Once the offer is accepted there is a legally binding contract between both parties. However, if the offer is withdrawn before it is accepted then there is no contact. An example of acceptance deal is the Adams v Lindsell (1818) case where when the letter is posted which is when the acceptance is communication.
A consideration is to act and do something of a meaningful value. The parties would need to support the contract and what it says. If there isn't consideration, then there is no binding contract. There are two types of consideration which is executed and executory consideration. Executed will happen when the agreement is made. Executory will happen after the agreement is made. This means consideration will always happen whether it does in the present or the future.
An intention to create legal relations means you are going into a binding contract. The parties involved would need to have an intention to go into a legal relationship. In the contract it will be evident what the intentions of the parties are.
The consideration is not needed as both parties are getting something of value. There are two ways of giving consideration and this is through money. Another way is through giving something of value given by both parties which they both agree on.
The internet companies meet the requirements of offer and acceptance by giving the consumer an offer of the terms and conditions on the website. Then all the consumer needs to do is click and accept it. This means they are in a legally binding contract once accepted.
Many people do not read the contents of the contract when signing up to receive a service. As they will just accept the terms and conditions. The terms and conditions for many services are very complex for people to understand. Therefore, they need to be simplified and be put in plain English for people to understand easily.
Are the terms of these contracts fair?
The contracts are fair as both parties are getting their side of the bargain. As one party wants something which the other is offering. However, the other party have their terms and conditions which many consumers would be happy to agree to. The contracts are agreed to straight away with no delay.
When understanding if the contract terms are clear. There are things to consider such as representation or misrepresentations, types of terms, exclusion clauses, express or implied terms.
Representation is words stated which are not part of creating a legal binding contact. An example of this is when buying a product such as a phone and mentioning the phone has never been slow to use. However, if the representation comes out to be false then the third party can make a claim for a breach in the contract.
The express terms made between the parties are normally in writing within the contract and there is the verbal terms which has been decided too. The implied terms is when the law is implied in substitute to the express terms. These terms are legally binding to both parties involved.
The exclusion clauses are terms which limit the liability to a breach in contract. There are parties such as businesses which use this as a way of lowering their liability. This is normally within the contract of the business. For example, the business would not accept any loss suffered on their premises.
The types of terms are put into sections such as warranties, condition and innominate terms. This is needed to be able to understand the differences between the breach of contracts.
I. The warranties is a term which is less important and would be a term if it does stop the innocent party from receiving the benefits. The solutions to this is that it is not needed to be justified for the validity. As it is not serious enough.
II. The conditions is a more important term. There would be a breach of the contract if it would stop the innocent party from receiving the benefits of the contract. The solution to this is the innocent party has the chance to cancel the contract if they wish.
III. The innominate term is not either of the above but if there are damages then it should be dealt with like a warranty. If there are very bad damages, then it should be dealt with like a condition.
There are rights for the consumer to be protected if the contract is breached or unfair. The consumer rights act 2015 is for the sales of goods and says that the products must be of a suitable and good level. The product must be fit for purpose. This applies to the digital platform and physical as well, so all the products must meet a good level. Digital content and physical goods need to meet the criteria of these three. It must be of a good quality and be used for its purpose. Also, should be as how the seller has explained the product to be. However, if this does not meet the requirements of the digital content then the consumer has the right to replace or repair the content they have bought. If this is not feasible then you can ask for a reduced price for the content bought. The provider of the content will have to compensate you for anything else which has been affected as an outcome to the faulty digital content that has been downloaded. As a final result if the dealer doesn’t agree the court can decide if the terms are not fair.
In the usual contracts there are highlights and underlining of key terms to make the consumer aware of the terms in the contract. In contracts there would be highlighted words to stress the importance of the term. There are good disclosures in the digital contracts as when a person agrees to the terms and conditions, they would need to verify that it was them. The consumer would normally verify through an email or text message. This prevents people from using other people’s details.
Currently in the recent events there has been made mention of issues around terms of a contract. With the huge social media platform known as Facebook. The platform was fined in regard to a breach in contract of about £500,000. This fine was because the platform was not able to protect the data of its users. This can lead to many problems as protecting people’s details is very important as it contains their location and their personal life. Facebook had breached two of the data protection laws this meant it was unable to protect its consumers information. Also, the social media company had not been transparent about how they gather data from other people. The information Facebook were able to get from its users is a massive amount which they could take advantage of. By using it to target certain audiences.
What does the future hold?
The future for contract law in the digital economy will need a means of more security and protection for its consumers as many consumers don’t understand their rights and what they have agreed to in the contract. A way of doing this is through making the laws of a contract more up to date. The contracts should be made more simpler to understand which will mean consumers know the terms and conditions of the contract straight away. As now the contracts are complex to understand.
Another of improving the method of agreeing to the contract could be by simplifying the wording of their terms. This means people can understand the contract more easily and know their rights. Also, the consumer should agree to each of the terms individually. However, a con to this is that it would take a long time, as there is a lot of terms to agree to.
There are other ways of protecting consumers such as giving extra warnings on the screen before the consumer goes ahead and agrees. The consumers should provide digital signature’s so that consumers would understand the significance of the contract. As writing is better too as good for evidence. The government should get more involved and provide new laws to help stop companies from not providing their consumers with the right information. That they need to know before signing their contracts.
With new stories coming up in television news of many companies being penalized by being fined. This will prevent many other companies taking more caution into the rules and regulations. As it will affect the reputation of the company as well.
Conclusion
Overall, there needs to be more stress put into the terms of a contract. As many people do not know what are in the contracts. This means they do not know what the company's rights are on them. There should be more awareness put into contract law and people should teach people as this is vital as people agree to contracts in their day to day lives. Many companies need to be more aware and be prepared for future changes in new contracts changes. In the news, there will most likely be more stories about companies which have been taken to court. This will help people understand more about contract law and its importance.
Reference:
Class notes
https://www.rocketlawyer.com/article/what-is-consideration-cb.rl
https://www.which.co.uk/consumer-rights/regulation/consumer-rights-act
https://www.theguardian.com/technology/2018/jul/11/facebook-fined-for-data-breaches-in-cambridge-analytica-scandal
http://legalcareerpath.com/what-is-contract-law/
https://www.lawteacher.net/cases/fisher-v-bell.php
https://www.lawteacher.net/cases/adams-v-lindsell.php