Intention to create legal relations for an online advertisement in ordinary offline transactions

Question

intention to create legal relations for an online advertisement in ordinary offline transactions

Answer

It is a well-established rule that an agreement will not constitute a binding legal contract in the absence of a reasonable decision which acknowledges each party’s legal consequences. In the era of electronic media though, the intention to make a legal relationship through online advertisements for ordinary offline transactions is difficult to establish.

Traditionally, the law preserved an objective standard to finding intention. In Carlill v Carbolic Smoke, it was held that a contract will be binding if a reasonable person would determine that there was an intention to make a contract. This test however does not adapt well to the exact nature of online advertising and any intentions to create legal relations, as online advertising does not establish on its own that the offeror intends to make a legal relationship with a potential customer looking at the advertisement.

The new Consumer Contracts Regulations provides some assistance for this. The Regulations state that an online advertisement will lead to the creation of a contract if certain information is provided in a clear and comprehensible manner. The information required comes from a non-exhaustive list, which includes the trader’s name, charges and contact information. In this way, it is assumed that the offeror intends to create legal relations with the viewers of the advertisement by providing the information necessary under the Regulations, while the consumer’s use of this information constitutes his part of intention to enter into an agreement with the offeror. In this way, the exchange of information through the advertisement constitutes the intention necessary to create a binding agreement.

References

Beatson, J., Burrows, A. and Cartwright, J. (2010) Anson’s Law of Contract 29th edition, Oxford University Press, Oxford.

Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256

Contracts (information, cancellation and additional charges) Regulations 2013, 13