Internet Contract

Time and Place of Internet Contract - Application of contract law to internet transactions

Common law principles of contract law apply to contracts made over the internet.

Digital encrironment may give rise to questions as to the time when the contract is made and the place where the contract is made, both of which may have tax implications.  

Time of Internet Contract: usually, a prospective purchaser responds to the display of goods on a website and makes an order whereby, depending on circumstances, the display of the goods on the website may itself constitute an offer or an invitation to treat. If it is an invitation to treat, the offer would actually be made by the prospective purchaser who makesthe order and communication of acceptance by the seller would be implied from the dispatch of the goods to the purchaser.

In some situations there is a formal acceptance required and in the case of contracts made by telephone, telex or fax, receipt of the acceptance would normally be required though this may be affected by special circumstances. Reference should also be made to the Commonwealth Electronic Transactions Act 1999 and its state counterparts which define when an electronic communication is despatched and received.

The place in which a contract is made may also be important for tax purposes. It will typically be where the communication of the acceptance of the offer is received.

There is no requirement to identify the physical owner or controller of a website. Anonymity of electronic commerce may have important implications for enforcing contracts and/or tax enforcement.