CONTRACTS IN DIGITAL ENVIRONMENT: LAW AND PRACTICE IN TANZANIA

©2013 MAGALLA JR. Electronic Contracts in Tanzania: A Detailed Discussion on the Formation of Electronic Contract in Digital Age. | Prepared by Asherry Magalla Do We Need Electronic Contracts? A Detailed Discussion on the Formation of Electronic Contract in Digital Age. Study Case : Tanzania. Iringa University Formerly known as Tumaini University Iringa University College. Prepared by Asherry Magalla (LL.M-ICT LAW-10919) ©2013 2 About the Author. Asherry B.P. Magalla., Ll.B, Ll.M Candidate of Information and Communication Technology Law at Iringa University (Formerly Tumaini University Iringa University College). The author currently a trainee teacher and candidate at Iringa University-Iringa, obtained his first degree of law in the same university in 2012. His Primary studies were at Kowedi Primary School in Dodoma (Mvumi Mission), Forodhani (currently St. Joseph High School), and Bunge Primary School where he finished. Ordinary Level studies at the Kaole Secondary School from 2002 to 2006, and in 2007 to 2009 it was when the Advance Level Certificate was given to him at Midland High School. In 2009, the Author was admitted by the Tumaini University Iringa University College, as it was known by then, after attending Crush Program. As the fact that the inspiration of learning Law was and still running in his blood vein, the Author had to change/shift the course of Community development where he was admitted at first time, to Law where his brain recognised. In 2012 the Author was granted his first degree of Law at Tumaini University Iringa University College, but due to his inspiration to study further, especially law particularly Information, Communication and Technology Law , and with the help of his family, relatives, friends, and the Faculty of Law at Tumaini University Iringa University College especially the Dean Faculty Advocate Renatus Mgongo, he was admitted to continue with Masters of Information, Communication and Technology Law for the year 2012-2013. 3 ARTICLES PUBLISHED This is his eighth article on the Development of Information, Communication and Technology Law. Some other articles are;  THE INTRODUCTION TO CYBERCRIME: SECURITY, PREVENTION AND DETECTION OF CYBERCRIME IN TANZANIA.  THE DEVELOPMENT OF COPYRIGHT LAWS IN TANZANIA; ASSESSMENT OF COPYRIGHT INFRINGEMENT IN DIGITAL ENVIRONMENT, CASE STUDY IRINGA REGION.  COPYRIGHT PROTECTION AND INFRINGEMENT IN DIGITAL ENVIROMENT: LAW AND PRACTICE IN TANZANIA.  THE CHECK SYSTEM AND THE LAW IN DIGITAL ENVIRONMENT.  THE ROLES AND IMPACTS OF INFORMATION AND COMMUNICATION TECHNOLOGY IN CONDUCTING ONLINE BUSINESS IN TANZANIA.  THE HISTORY OF COPYRIGHT.  THE LAW OF DEFAMATION IN TANZANIA AND THE DEVELOPMENT OF DIGITAL TECHNOLOGY.  INTELLECTUAL PROPERTY AND ICT LAWS IN UNCOMPETITIVE BEHAVIOURS: LAW AND PRACTICE IN TANZANIA  And lastly THE INDEPENDENCE OF JUDICIARY IN TANZANIA They are all available on Google and Academicians Website at http://www.academia.edu/ 4 ACKNOWLEDGEMENTS ALMIGHTY GOD is everything to me, everything I have been doing and I’m about to do, it is the results of His Holy Hands. The author would like to thank the following learned brothers and sisters, Dean Faculty of Law, Iringa University (Formerly Tumaini University Iringa University College) Adv. Renatus Mgongo, Dr. Lalteika, Dr. Pulluru, Dr. Lukumay, Philip Filikunjombe, Harry Henry Mwinuka, Nicas P. Ngimbwa for their full support in my studies. 5 COPYRIGHT © Tumaini University-Iringa 2013. This Paperwork is copyright material protected under the Berne Convention; the Tanzania Copyright and Neighbouring Act of 1999, and other international and national enactments, in behalf, on intellectual property. It may not be reproduced by any means, in full or in part, except for short extracts in fair dealing, for research or private study, criticism scholarly review or disclosure with an acknowledgement, without permission of the Dean, Faculty of Law, on behalf of both the author and the Tumaini University, Iringa University College. 6 DEDICATION; This article is dedicated to My Beloved Late Grand Father and Mother (Mr. And Mrs. Magalla Sr.) My Grand Uncle, Augustino Ramadhani, My Parents Mr. and Mrs. Kessy and My Relatives. Without You; I wouldn’t be in this Position. I Will Always Love You, Forever. 7 Do We Need Electronic Contracts? A Detailed Discussion on the Formation of Electronic Contract in Digital Age. Study Case : Tanzania. 1.0 Introduction. This paper presents important issues on whether the Law of Contract of 1975, Cap .345R: E 2002, curter the needs for the Formation of Electronic Contract in Tanzania. The paper will consist of Five Parts in terms of alphabet A-E. The intent of the author is not to provide an exhaustive treatment of the subject but a good understanding of the subject. In Part A, the attempt here is simply to familiarize the reader with a careful understanding of the Concept of Contract. Here then, the author will trace back the history of contract and law, where it was rooted. How do the ancient world defined and understand the concept of contract. What were the regulations regulate the whole concept of contract. And lastly different types of contracts. In Part B, as the fact that a studied area is Tanzania, now the concept of contract in Tanzania Legal Regime will be discussed. After the discussion of the concept of contract and the law in Tanzania Arena, the new world of contract formation that is cyber contracts will be considered in Part C, which will include the origin, meaning, elements and types of cyber contract. In Part D, it is where the issue of whether the Law of Contract of 1975, Cap .345R: E 2002, curter the needs for the Formation of Electronic Contract in Tanzania will be discussed by looking at the aspect of contract formation, validity and other essential aspects of the contract. 8 The last part is Part E in which after considering all the facts explained in Part D, the author will have to give his assessment on the issue and provide his recommendation as to what must be done if there is any problem concerning enforceability of electronic contract and conclusion. 9 PART A THE HISTORY/ORIGIN OF THE CONCEPT OF CONTRACT AND THE LAW OF CONTRACT. “Everything changes continually. What is history, indeed, but a record of change?” Jawaharlal Nehru. 1.1 The Origin of Contract and the Law of Contract. “Society is indeed a contract. It is a partnership in all science; a partnership in all art; a partnership in every virtue, and in all perfection. As the ends of such a partnership cannot be obtained in many generations, it becomes a partnership not only between those who are living, but between those who are living, those who are dead, and those who are to be born.”1 1.1.1 The General Origin. Since the memory of generations and generations, fathers of fathers, our great grandfathers and mothers were normally engaged in various forms of contracts in their daily activities from the day to the night. This is till happening to the current generation. Tyr to think about the public transport you use during the morning and evening when we went to the working places or schools. Think about various products we are buying, think about the various services we obtained from various service companies. Think about the various social networks we visit every day and with a just single click, we entered a contract. Think about phone calls we made with a number of person(s), some of them are contracts. 1 Edmund Burke quotes (British Statesman and Philosopher, 1729-1797) 10 All of the above activities and many others involve contracts, whether we directly know that or we do not know but through our actions, the contract exist. A person buys a cup of coffee in return for money, whatever happened to that cup of coffee, whether the taste or quality, the seller had to be responsible. Buying a bus ticket, with the aims of reaching a certain destination, in which the failure to do reach such area, the owner of the bus will be responsible. What makes these people responsible for the failure their actions? It is the law of contract. It is popularly supposed that the old forms of contract known to our law are covenant and debt. Some principles of contract, and contract law go back three centuries mainly in Ancient Greek2, Rome and Mesopotamia3 where the essence of trade was shown, for instance in Mesopotamia contract for sale of slave, land and other properties were witnessed conducted in the Reign of Rim-sin, c. 2300 B.C. The majority of contract rules were established in the early 19th century. Before that, contract hardly existed as a separate branch of the law. It was due to the transformation of our society which occurred during the late eighteenth and early nineteenth centuries, a transformation which has been described as a move from status to contract.4 2 Greek Civilization for instance Aristotle in his Politics provides a reference to the use of options contracts involving a successful speculation by the philosopher Thales (Book I, Chapter 11, Section 5-10) 3 Currently Iran and Iraq. 4 C. Elliot and F. Quinn, Contract Law, 7 Edition, Pearson Longman, 2009-London. th 11 There were many areas of life where free negotiation and bargaining were simply not an issue. An example is the market for what was regarded as essential foodstuffs, which included wheat, bread and beer. Although bakers and millers were entitled to make a profit, that did not mean they could sell at whatever price people would pay5. In terms of employment, employment obligations were simply derived from whether you were a master or a servant; masters were entitled to ask servants to do more or less anything, and criminal sanctions could be used against an employee who disobeyed. Employers had obligations too (though rather less onerous than those of employees), which sometimes included supplying food or medical care.6 All this began to change in the 18th and 19th centuries. Society itself was undergoing huge changes, moving from an agricultural to an industrial economy, and with that came political changes, and changes in the way people saw society. With the rise of an economic doctrine called laissez-faire7 came a view that society was no more than a collection of self-interested individuals, each of whom was the best judge of their own interests, and should, as far as possible, be left alone to pursue those interests. If we apply this view to the market for bread, for example, it would suggest that bakers would sell bread for the highest price they could get, while consumers shopped around for the lowest, and the result should be a bargain suitable for both. The market would consist of hundreds and hundreds of similar transactions, with the result that everyone would be able to secure their own best interests, and the state would not need to intervene to do this for them in fact it should not do so, 5 Ibid 6 Ibid 7 Friedmann, Law in a Changing Society (1959) 12 because the parties should be left alone to decide what was best for them.8 This laissez-faire9 approach carved out a very important place for contracts. As we have seen, where people make their own transactions (party autonomy)10, unregulated by the state, it is important that they keep their promises, and as a result, contract law became an increasingly important way of enforcing obligations.11 Therefore the concept of contract and the law of contract existed due to the increasing of interaction between different classes of people such as rich and poor in which a law had to be established so as to protect the one privilege by legal and social restrictions (from Status to Contract), and left men to settle the rules of conduct for themselves with a liberty never allowed to them till recently. Contract law arose from attempts by judges to solve individual commercial disputes brought before them. The principles of contract law were derived from the reasons of the judge’s decision in cases. Very little contract came from statute law.12 1.1.2 The Concept of Contract in Religion. Can somebody tell me the difference between the Covenant and Contract? It is quite difficult to differentiate between the two concepts, unless you interfere their use. That is Covenant tends to be more religious or stronger whereas contract is usually a written legal document.13 8 Cornish and Clark, Law and Society in England, 1750-1950 9 E. McKendrick, Contract Law, Fourth Edition, Palgrave Publishing ltd, 2000, page 3. 10 J. M, Perillo, The Origin of the Objective Theory of Contract Formation and Interpretation, 69 Fordham L. Rev. 427 (2000). 11 C. Elliot and F. Quinn, Contract Law, 7 Edition, Pearson Longman, 2009-London. th 12 http://www.termpapersmonthly.com/view-essay/73253/extracted in 3rd Jan 2013 at 2200 hours. 13 But when you came to the meaning of covenant; that is an agreement, usually formal, between two or more persons to do or not do something specified or a solemn agreement between the members of a church to act together in harmony with the precepts of the gospel14, one will find that, it is all about the agreement to not to do or to do something bound between people. Does this definition differ from that contract? If this amount or resemble to contract, then all Covenants that were made between Almighty GOD and his servants , were contracts. The agreement between God and the ancient Israelites, in which God promised to protect them if they kept His law and were faithful to Him, the agreement made between God and Adam over the fruits of the centred tree. The promise between God and Abraham, etc., this clearly shows the signs of early contracts. “When God at first made man, / Having a glass of blessings standing by, / Let us (said he) pour on him all we can: / Let the world's riches, which dispersèd lie, / Contract into a span.”15 Once professor Bermans argued that, “Law and Religion are two different but interrelated aspects of social experience, and that one cannot flourish without the other.16 One’s view of God and the world must certainly affect one’s view of the law. Similarly, one’s view of law propably affects how that person views God.”17 13 http://wiki.answers.com/Q/What_is_the_different_between_Covenant_and_Contract. 14 Ibid. 15 George Herbert quotes (English metaphysical Poet and Clergyman, 1593-1633) 14 1.1.3 The Concept of Contract in Europe. The nature and origin of contract law in most of the European Countries are the results of the efforts made by the capitalists, so as to run smoothly their capitalist activities around the world. 1.1.3.1 Contract in Ancient Rome. The earliest contracts were the formal contracts. Certain of these were contracts the form of which was religious and which were enforced primarily by a religious sanction. The religion of Rome was its own native religion and not a foreign importation.18 The religious element in Roman law persisted longer than in English law at a corresponding stage of development. The most solemn of the formal religious promissory oaths was the jus jurandnm by which the promisor devoted himself to the infernal gods in case he should break his promise; and which was enforced by penalties amounting practically to outlawry and excommunicationthe religious element in Roman law persisted longer than in English law at a corresponding stage of development. The most solemn of the formal religious promissory oaths was the jus jurandnm by which the promisor devoted himself to the infernal gods in case he should break his promise; and which was enforced by penalties amounting practically to outlawry and excommunication.19 16 H. BERMAN, LAW AND REVOLUTION: THE FORMATION OF THE WESTERN LEGAL TRADITION 11 (1983) 17 Shaffer, Jurisprudence in Light of the Hebraic Faith ,1 NOTRE DAME J. OF LAW, ETHICS& PUBLIC POLICY 77, 108 (1984) 18 Read more: http://chestofbooks.com/business/law/Law-Of-Contracts-4-1/Sec-4-Evolution-Of-Contract-At- Roman-Law.html#.UZo7opYp_og#ixzz2TqUSMoVC 19 Read more: http://chestofbooks.com/business/law/Law-Of-Contracts-4-1/Sec-4-Evolution-Of-Contract-At- Roman-Law.html#.UZo7opYp_og#ixzz2TqUSMoVC 15 1.1.3.2 English Law of Contract. “What usually comes first is the contract.”20 Without some idea of the origin of contract in English Law much of the law would be meaningless and appear anomalous. From the pages of Bracton's De Legibus et Consuetudinibus Angliae written between 1250 and 1258 we gather that there existed at that time the writs of debt. Detainee, account and covenant which have a bearing on the present matter. Debt lay where plaintiff claimed a definite sum of money as due to him from the defendant. The history of contract law stretches back a very long way. In the past, contractual agreements were much more basic than they are today, and a common law approach to these agreements was considered the norm.21 The evolution of the contract began initially with forms of action based on covenant and debt, roughly equivalent to what we know today as contracts under seal and simple contracts.22 Its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth (such as Australia, Canada and India).23The most important event in English Contract Law was the Norman Invasion and its aftermath. 20 Benjamin Disraeli quotes (British Prime Minister and Novelist. 1804-1881) 21 http://law-contract.co.uk/contract-law/contract-law-history/ 22 Contract Law UK. Anti Essays. Retrieved May 20, 2013, from the World Wide Web: http://www.antiessays.com/free-essays/9783.html 23 The Judicial Committee of the Privy Council decided cases on appeal from the Australian courts until 1985, from Canada until 1959, and from India until 1948. 16 However, this theorising and development of contract laws did not truly begin until the 17th century. It was decided that the tort, irrespective of the nature of the contract would be used when legally enforcing the agreement. It was not until 17th century however that the Statute of Frauds was introduced, which made a significant impact on the enforceability of contract laws. Until its introduction, a defendant brought before the court could very easily deny having made any sort of promise or contractual obligation. The Act, acted as the evidence towards the enforceability of the given contract, but later on it was seemed insufficient and unfit. Sir Henry James Sumner Maine, KCSI (15 August 1822 – 3 February 1888), was an English comparative jurist and historian. He is famous for the thesis outlined in Ancient Law that law and society developed "from status to contract."24 According to the thesis, in the ancient world individuals were tightly bound by status to traditional groups, while in the modern one, in which individuals are viewed as autonomous agents, they are free to make contracts and form associations with whomever they choose.25This is one among the concept that develop the law of contract in England and Europe in general. The general principles of contract are usually derived from the common law or judge made law. The treaties relating to these principles of the law of contract can be traced back to Lord Diplock 24 Maine, Henry (1861), The Ancient Law, Its Connection with the Early History of Society, and Its Relation to Modern Ideas (1 ed.), London: 25 Ibid. 17 in 1875, and Anson in 1879. This traditional has been maintained today in the work such as Treitel in 1999, Anson in 1998, and Cheshire, Fifoot and Furmston in 1996.26 1.1.3.3 The American Concept of the Law of Contract. “I believe that a contract, or at least an understanding, exists between the American public and the American advertiser concerning what advertising is, what its limitations are and what price people will pay for it.”27 As early as 1855, a prominent American commentator advised that, "if a party, bound to do a thing on a certain day, and therefore having the whole intermediate time, by some act distinctly incapacitates himself from doing that thing on that day, ... an action may be commenced at once."28 However, one cannot speak about the evolution of the law of contract in America without first considering the aspect of the indigenous individuals before what is known as America today was formed. These are the Red Indians who are believed to be the first American farmer and civilization around 5000 B.C to 1200 B.C. Then, how can these civilized societies living without having rules to regulate their various activities? The law had to exist. The idea of social contract existed in the minds of Americans. This is the belief that the state only exists to serve the will of the people, and they are the source of all political power enjoyed by the state. They can choose to give or withhold this power. 26 Ewan Mckendrick (2000), Contract Law, 4 Edition, palgrave Law Masters, p.2. th 27 John O'Toole quotes 28 Theophilus Parsons, The Law of Contracts 179 (1855) 18 It was from the culture assimilation where by we found now the current American People. As the fact that America was a British colony most of the laws used were British laws, even the law of contract. Soon after the American Independence, the court continued to use the British laws. But in the 19th century two important innovations occurred, the bargain theory of consideration and the objective theory of interpretation.29 By the end of the 19th century, both of the theory were firmly entrenched into the Us laws. By the late 19th to 20th centuries a movement away from formalism in the contract to a practical needs of the parties as specified in their agreement was followed (freedom of contract).30 Thus creating the beginning of the new laws regarding contractual agreements. 1.2 Meaning of the Concept of Contract and Law of Contract. We enter into contracts day after day, with different shape and size. Taking a seat in a bus amounts to entering into a contract. When you put a coin in the slot on a weighing machine, you have entered into a contract. You go to a restaurant and take snacks; you have entered into a contract. In such cases, we do not even realize that we are making a contract. In the case of people engaged in trade, commerce and industry, they carry on business by entering into contracts. But what is a contract and the law of contract? 29 A.W.B. Simpson, A History of the Common Law of Contract: The Rise of Assumpsit (1975). 30 Gregory Klass (2010), Contract Law in USA, Kluwer Law International BV. 19 Sir Frederick Pollock "The Law of Contracts represents the constant endeavour of the public authority viz. The State, to establish a positive sanction for the expectation of good faith which has grown up in the mutual dealings of men."31 Sir William Anson Pithily' "The Law of Contract is intended to ensure that what a man has led to expect, shall come to pass; that what has been promised to him shall be performed".32 Anson defines "the Law of Contract as that branch of the Law which determines the circumstances in which a promise shall be legally binding on the person making it.33 31 Frederick Pollock (1845–1937)The Principles of Contract. 32 Anson, The Principles of the English Law of Contract (1884, 11th ed. 1906), 33 J Beatson Anson's Law of Contract, 28th Edition, 2002. Oxford University Press. 20 In the ancient era when asking most of the people to describe a term contract and they will normally talk about a piece of paper, the documents you sign when you start a job, buy a house or hire a television, for example. While it is certainly true that these documents are often contracted, in law the term has a wider meaning, covering any legally binding agreement, written or unwritten. In order to be legally binding, an agreement must satisfy certain requirements. But with a few exceptions, being in writing is not one of those requirements. We make contracts when we buy goods at the supermarket, when we get on a bus or train, and when we put money into a machine to buy chocolate or drinks all without a word being written down, or sometimes even spoken.34 A contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty35. This definition is broadly 34 th C. Elliot and F. Quinn, Contract Law, 7 Edition, Pearson Longman, 2009-London pg 2 35 Section 1 of the American Law Institute’s Restatement Second of the Law of Contract. Even though the Restatement is not a binding legislative text, it is a very influential and acute interpretation of American Case Law. 21 acceptable, provided that it is realized that, in law, a promise may be constituted by an assurance that a thing has been or is as well as that a thing will be. In Tanzania as per section 2 (h)36 defines a contract as an agreement enforceable by law. The same applies to India as per Section 2 (h) 37defines a contract as an agreement enforceable by law. Section 2 (e)38 defines agreement as “Every promise and every set of promises forming consideration for each other.” Section 2 (b)39 definite promise in these words: “When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal when accepted becomes a promise.” From the above definition of promise, it is obvious that an agreement is an accepted proposal. The two elements of an agreement are: (i) offer or a proposal; and (ii) an acceptance of that offer or proposal. It is an agreement that can be enforced by the law between two or more persons to do or abstain from doing some act or acts with an intention of creating legal relations.40 According to the United States law on the Uniform Electronic Transactions Act (1999), contract is defined as the total legal obligation resulting from the parties’ agreement as affected by this [Act] 36 The Law of the Contract Cap 345 [R.E. 2002]. 37 The Indian Contract Act, 1872 38 Ibid 39 Ibid 40 See Smith & Keens, Law for Business, 13 Edition, 2006 at page 85. th 22 and other applicable law.41 Contract law consists of a large body of rules and guidelines that address the contract formation and enforcement. Stating the fundamental principle in basic terms, a contract is nothing more than "a promise or [a] set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty." Formation of a legally recognized contract requires an offer, acceptance, and consideration. Additionally, rules addressing specific issues of formation and enforcement supplement the basic definition.42 1.3 Why Protecting a Promise? The law of contract creates rights in personam43 as distinguished from rights in rem44.the reason as to why we need the law of contract is one, that is the promises should be binding especially those which involve some form of exchange. A promise for which nothing is given in return is called a gratuitous promise, and is not usually enforceable in law (the exception is where such a promise puts into a formal document called a deed). Why then do we need laws specifically designed to enforce promises involving an exchange? The major reason appears to be the kind of society we live in, which is called a market capitalist society. In such a society, people buy and sell fairly freely, making their own bargains, both on the small scale of ordinary shoppers in supermarkets, and on the much bigger one of a project such as the construction of the Channel Tunnel, which involved many different parties, each buying and 41 Section 3 (4) of Uniform Electronic Transactions Act (1999. 42 Donnie L. Kidd, Jr. * and William H. Daughtrey, Jr , Adapting Contract Law to Accommodate Electronic Contracts: Overview and Suggestions , Rutgers Computer and Technology Law Journal 26 , Rutgers Computer & Tech. L.J. 215 (2000) . 43 Rights in personam are against or in respect of a specific person and not against the world at large. 44 Rights in rem are generally in regard to some property as for instance to recover land in an action of ejectment. Such rights are available against the whole world. 23 selling goods and services. Although, as we shall see, there are areas in which government intervenes, in general we choose what we want to buy, who from and, to some extent at least, at what price. It would be impossible to run a society on this basis if promises were not binding. Promises must be respected45 1.4 Types of Contracts. “A verbal contract isn't worth the paper it's printed on”.46 As we observed on the concept of contract, people daily engage in different types of contracts depending on their needs. Mainly they are two types of contracts; Written Contract which it entails that, any agreement entered by the parties to the contract must be deduced into a piece of paper so as to be legally accepted. And secondly is Oral Contracts, which just the words of the mouth are sufficient enough to prove the existence of the contract between the contracting parties as long as the services provided are legal. 45 46 Pacta sunt servanda. Samuel Goldwyn quotes (Polish born American movie Producer and Founder of the Metro- Goldwyn-Mayer (MGM) in 1924. 1882-1974). 24 The Young Philosophers concluding a Legal Oral Contract. However, there are some contracts which are legally required to be presented in the document so as to be accepted as a contract, such as land sell contract. These two types of contracts can be implied or expressed. As long as the parties has been agreed on all material points, then the contract exists and no need for strictness analysis of offer and acceptance, as explained by Lord Denning in Gibson v Manchester City Council47, and in Butler Machine Tool Co Ltd v E-Cell-O Corp Ltd48. 47 [1978] 1 WLR 520, 523. 48 [1979] 1 WLR 401 25 In Gibson’s case49 he stated that the; “Better way is to look all the documents passing between the parties and glean from them, or from the conduct of the parties, whether they have reached agreements on all material points, even though there may be differences between the forms and conditions printed on the back of them”.50 49 [1978] 1 WLR 520, 523. 50 Ibid. 26 PART B THE CONCEPT OF CONTRACT AND THE LAW OF CONTRACT IN TANZANIA. “It may be taken as now that, where an offer is made and accepted by letters sent through the post by letter sent through the post, the contract is made the moment the letter accepting the offer is posted, even though it never reaches its destination”.51 2.1 The Origin of the Concept of Contract in Tanzania. The concept of contract in Tanzania it is not such different from any other place in the world. We experienced the intrusion of colonialist from 7th Century by Arabs and people from Asia using business as a way. Arabian merchants visited the Tanzanian Coast 2000 years ago and later settled in Zanzibar around the 7th century A.D. They established trade routes in the interior and in so doing helped to spread the Arab influenced culture and language of the coast: Swahili culture and language. From 1000 A.D., a considerable amount of trade went on between China, Persia and Tanzania Coastal Areas. Much exchange took place in India until after 1500 A.D. when Chinese merchant ships reached the East African Coast. Chinaware of 700 years ago have been excavated in Kilwa, Tanzania bearing evidence that the Tanzania Coast was once part of a developed culture that boomed along the Indian Ocean Coast. As stated above, ivory from Tanzania was also exported to Japan around this period52. Despite the fact that there were Arabs and Asians, before they arrive Native Africans had engaged in trade know as Barter Trade which was resulted by merging of various professional groups such as iron smiths, waiver, potters, fishers, pastoralists and agriculturalists in which each professional 51 See Singh A, Law of Contract, 2005 at page 29, Lordship Thesiger (sic) LJ in (House Fire Insurance v. Grand). 52 http://www.fijibure.com/tang.htm, extracted in 4 Jan 2013 at 1534 hours. th 27 group had to exchange the items which they do not produce. Examples of these tribes were Yao, Sukuma, and Kamba who had three routes the northern, southern and central routes. In this sense we can say that there was an existence of contract as people did agree to the exchange of the products. The basis of contract law in Tanzania is the principles of offer and acceptance as the legal system based on common law as the result of British Colonization. And the laws dealing with contracts are the Law of Contract and the Sale of Goods Act53 2.2 The law of Contract Act Cap 345 R.E.2002. The Act is the result of the old contract laws, the Indian Law of Contract which was imported by the colonial government and the Law of Contract Ordinance Cap. 433 of 1961 which came soon after independence. This is evidenced in the definition of the term contract. Both laws, the Indian and Tanzania law of contract, define the term contract in the same manner, meaning and the same section.54 The law governs non-customary contracts. This was a product of the codification of English common law of contract of the mid 19th century as applied mutatis mutandis by the British in their Indian colony55. After independence, Tanganyika re-enacted the Indian Law of Contract, 1872. It is believed that since such changes in that legislation, nothing has further been changed again, thus remained intact 53 The Sale of Goods Act [CAP 214 R.E.2002]. 54 Section 2 (h) of both Indian and Tanzanian Law of Contract. 55 M C, Kuchhal , Mercantile Law 6 Edition (2006) 7-8. th 28 from the colonial era to the present.56 Although the Law of Contract Act owes its origin to India, various English common law principles and doctrines of equity have relevance to Tanzania, and where necessary may be resorted to by the courts as stipulated by Judicature and Application of Laws Act.57 Furthermore, the courts of East African Countries were no longer bound by the decisions including the Privy Council, as the fact that the East African Court of Appeal became the final appellate court in the region because they were just persuasive. After the collapse of the East African Community in 1977, each country established its own Court of Appeal in which it could try its own case. For instance, in Tanzania in the case of Juwata v Kiuta58, the Tanzania Court of Appeal approved Govindji Mulji Dodhia v National & Grindlays Bank Ltd & Another59, whereby the foreign decisions were regarded as persuasive.60 2.3 The Basic of Contract Law. The basis of the law of Contract Act Cap 345 R.E.2002 is found on the requirements on the validity of a contract. 56 D, J Nangela, Paper on the Adequacy of the Tanzania Law on E-commerce and E-contracting: Possible Solutions to be Found in International Model and South African Legislation, Department of Commercial Law, University of Cape Town, 2011. 57 Section 2 (3) of [CAP 358 R.E. 2002]. See also Hussein Bachoo v Clove Growers Association of Zanzibar [1957] EA 193. 58 Civil Appeal No 29 of 1987 (Unreported) 59 Civil Appeal No. 53 of 1968 (unreported) 60 D, J Nangela, Paper on the Adequacy of the Tanzania Law on E-commerce and E-contracting: Possible Solutions to be Found in International Model and South African Legislation, Department of Commercial Law, University of Cape Town, 2011. 29 Contract requirements: 1. Offer and acceptance61, as to whether the parties’ minds met or meeting of the mind, consciousness of making the contract. The effectiveness of the communication, time and place of effectiveness, revocation and withdraw. 2. Legal intention, as to whether the parties had an idea of putting such agreement to the extent of creating legal enforceability. 3. Capacities, as to whether the parties entered into an agreement, are legally allowed to enter 61 So as to formulate legal agreements. 30 into such agreement, the issue of age and sound mind62 4. Consideration, as to whether parties to an agreement had lawful consideration and an object.63 All of the basic of contract law are found in Part II and III of the law of Contract Act Cap 345 R.E.2002. 62 Maryke S, Nuth, Electronic Contracting II: Notes Formation of Electronic Contracts, NRCCL, University of Oslo, Faculty of Law, 2010. 63 Ibid. 31 PART C CYBER OR ELECTRONIC CONTRACTS. “Ever since men began to modify their lives by using technology they have found themselves in a series of technological traps”. Roger Revelle64 3.1 Introduction. Traditional communication channels like posts and telegraphs have played an important role in spread of commerce all over the world. Use of telephones further fast-forwarded the whole process of business transactions. As the business became more and more complex it was realized that in order to remain competitive in the business world, one need faster processing of business information. The answer to this came in the form of development of a “paperless” approach various business process such as inquiries, purchase orders, pricing, order status, scheduling, receiving, invoice payments and contracts.65 Traditional concept of contract provides the foundations for all types of valid and enforceable 64 rd Vakul Sharma, Information Technology-Law and Practice, 3 Edition (New Delhi: Universal Law Publishing Co.Pvt. Ltd., 2011). 65 Ibid. 32 contract, keeping in view the meanings of definition of contract as, “all agreements are contracts if they are made by the free consent of the parties, competent to contract, for a lawful consideration and with a lawful object and are not thereby expressly declared to be void”.66 3.2 Origin of Electronic Contracts E-contracts emerged as the results of the introduction of internet. The Internet was originally developed as a way of sharing current results of military research sponsored by the US government. The concept was first described by J.C.R Licklider of MIT in 1962 and developed by DARPA (Defence Advanced Research Projects Agency)67 and for some time the technology was confined to the military.68 However, earliest form of electronic contract can be traced back from mid -1800s when the first contract was made by using the telegraph or telephone.69 The Request and Reply system introduced by the American Airlines in 1930s represents the earliest form of e-commerce.70 In the late 1970s the use of Electronic Data Interchange (EDI) technology was introduced and became another early example of e-commerce. In the 1980s however, businesses learned about the new technology and started funding research into the hardware and software. This research developed systems that are used in industry, universities and eventually commerce. Online companies and trading (and hence e-commerce) 66 Zakayo N, Lukumay, Notes on Electronic Contract, School of Law. University of Dar es Salaam, 2012. 67 Leiner et al. 1999. A Brief History of the Internet. (visited Jan. 29, 2013) http://www.isoc.org/internethistory/brief.html 68 th Phillip Tagini , E-commerce in Vanuatu: Can contract law accommodate for new technology? (Visited 6 Jan 2013) -www.paclii.org/journals/fJSPL/vol04/10.shtml 69 A Davidson, The Law of Electronic Commerce (2009) 1. 70 D J Brinson, B Dara-Adams, J masek, R McDunn &B White, Analyzing E-commerce & Internet Law (2001). 33 only gained momentum in the middle of the 1990s. Among the first of these entrepreneurs are Amazon and Yahoo.71 Over the past few years, the quantity of e-commerce has increased a thousand fold. In 1999, in the US alone, the value of business-to-consumer electronic commerce is estimated at some $8 billion and predicted to increase to 108 billion over the next five years. That is however small compared to business-to-business transactions, which is estimated at $43 billion and expected to increase to $1.3 trillion in 2003. 3.3 Meaning of Electronic Contract. Many transactions and other forms of trade are now conducted electronically. For example, most people will at least be familiar with, if not frequent users of, ATMs situated outside or inside banks. When a bank’s customer withdraws money or uses an ATM for other purposes, an electronic transaction takes place. More and more business is now done electronically, often with the parties never physically meeting each other. Online shops, for example, allow potential customers to browse, select and purchase goods without ever asking a salesperson for advice or assistance. Negotiations, giving quotes or submitting tenders for work may all be done 71 Connerty A. Electronic Commerce: A United Kingdom View. [1999] International Company and Commercial Law Review: Special Issue. Sweet & Maxwell, p 65 34 electronically and indeed are. All of the above transactions are electronic contracts.72 An electronic contract is an agreement created and signed in electronic form. It is a contractual agreement, represented as digital information and signed with the electronic or digital signatures of the participating parties –no paper or other hard copies are used.73 The E - contract is any kind of contract formed in the course of e-commerce by the interaction of two or more individuals using electronic means, such as e-mail, the interaction of an individual with an electronic agent, such as a computer program, or the interaction of at least two electronic agents that are programmed to recognize the existence of a contract. It excludes all paperwork transactions which are born out of the need for speed, convenience and efficiency.74 3.4 Types and Elements of E-Contracts. An on-line contract is formed when two or more parties reach an agreement by electronic means. An on-line contract should therefore exhibit the traditional hallmarks of intention to create legal relations, offer, acceptance, consideration, and certainty of subject matter.75 72 http://www.inbrief.co.uk/contract-law/electronic-contracts.htm/visited on 6th Jan 2013. 73 Zakayo N, Lukumay, Notes on Electronic Contract, School of Law. University of Dar es Salaam, 2012. 74 Rohas Nagpal, Ecommerce-Legal Issues, Online Trading, 2007. 75 Revill, S. Current e-commerce issues in New Zealand (1999) International Company and Comparative Law Review. Special Issue Sweet & Maxwell. London. p 48 35 3.4.1 EDI Commercial Contracts. It is the short form of the term Electronic Data Interchange. The system involves the electronic transfer of a certain understandable format of information from one computer to another computer. It replaced the use of paper into various transactions76. They involve an ongoing business-to-business relationship, a conventional contracting approach, but as the internet becomes a useful business tool, they also conducted through this medium. 3.4.2 E-mail Contracts. The biggest problem on internet traffic is e-mails. Each second, minute, hour, day, month and year, people keeping on sending themselves e-mails. Some friendly emails, some administrative emails and other for commercial purpose. It is from these activities whereby some persons are found themselves bound to adhere to a certain email they sent and received. 76 C Glatt, Comparative Issues in the Formation of Electronic Contracts, (1998) 6 International Journal of Law and Information Technology 34, 37. 36 Parties may exchange e-mails and send attachments embodying the terms of their contracts.77 3.4.3 Click-Wrap Contracts. Are some forms of web-based agreements on a web page providing right, conditions and obligations of the parties to the contract. The act of clicking the icon verifies the consent to be bound by the terms and condition of the contract. Click-wrap" agreements, requiring an end user to register by name and to click on "I agree" button before gaining full access to the site. 3.4.4 Browse-Wrap Contracts. No requirement for the user of the web to indicate the consent before accessing an online product or service. This is an alternative method of commercial considerations which exist frequently when the Click-wrap Contracts lacks attractions to the customers or user. The picture of an electrical light bulb, indicate cation when one wants to enter into an agreement. 77 L Davis, Contracts Formation on the Internet: Shattering a few Myths in Edward & Waelde (n7) 97-120. 37 3.4.5 Shrink-wrap Contracts. Shrink wrap contracts are license agreements or other terms and conditions of a (putatively) contractual nature which can be read and accepted by the consumer only after the consumer opens the product. The term refers to the shrink wrap plastic wrapping used for coat software boxes, because such packaging makes it impossible for the buyer to have read the contract before completing the purchase. These contracts are not, however, limited to the software industry.78 78 th http://www.wikipedia//meaningofshrinkwrap.com (visited on 8 Jan 2013) 38 PART D: THE APPLICABILITY OF L.C.A. CAP. 345 R: E 2002 TO ELECTRONIC CONTRACTS IN TANZANIA. “Those who fail to anticipate the future are in for a rude shock when it arrives”.79 4.1 Introduction. It has been evidenced that, many African countries, Tanzania being among of them, there is quite different between the existing legal frameworks and the drastic change of science and technology. In e-commerce respectively, all laws relating to commercial activities must support this advancement of the science and technologies especially electronic transactions. Failure to address these and related issues denied the African Continent the opportunities brought by these advancements of technologies.80 Tanzania has been slowly changing her legal system to cope with globalization, economic and political reforms. The development and innovation of technology that has brought on the application of ICT in the world is highly affecting the country.81 Most of the commercial laws in Tanzania are resulted from the old laws of the former colonial master, Britain. These laws were designed to support and facilitate paperwork transactions that requires the use of documents, written notices and manuscript signatures hence they do not open the door for the existing sophisticated technologies.82 79 See R G Smith, P Grabosky & G Urbas, Cyber Criminal on Trial (2004) 156. 80 E S Mchome, Evictions and the Rights of People in Conservation Areas in Tanzania (2002) 4 Cap 1 &2. 81 Adam J. Mambi, ICT LAW BOOK, a Source Book for Information and Communication Technologies and Cyber Law in Tanzania and East Africa Community, 2010, page13. 82 Ibid. 39 Professor C. Reed argued that, the laws in most countries were developed over a long time during which physical actors and physical media were the only, or at least the primary, the mechanism by which transactions with legal consequences could be affected. This is currently happening in Tanzania. 4.2 The Application of the Law of Contract Act Cap345. R: E 2002 on E-Contracts. One among the area which can be affected by the development and the use of e-commerce is the law governing contracts.83 The Law governing Contract in Tanzania applies postal rules for the communication and revocation of offer and acceptance as laid down in the case of Adams v. Lindselland House Fire Insurance v. Grandi. The general position of Common law is that communication by post is effected on the date the letter is posted in due course, as explain by Signer L.J in House Fire Insurance v. Grandi (see Part B, page 9 of the paper). There is no legal basis for electronic contracts in Tanzania. The major problems are; the ascertainment of e-contract terms and the other party in the contract with the focus to consent i.e. consensus ad idem requirements and capacity to contract and other formalities on e-contracts they are not provided under the Law of Contract Act Cap 345. R: E 2002. The existing laws in Tanzania provide a general guidance to cyber contracts because there is no specific legislation to govern electronic transactions. This makes it difficult to respond sufficiently to technological changes.84 E-commerce involves e-contracts and the business community in Tanzania enters into contractual 83 Adam J. Mambi, ICT LAW BOOK, a Source Book for Information and Communication Technologies and Cyber Law in Tanzania and East Africa Community, 2010, page 22. 84 D, M, Nyamaka, Electronic Contracts in Tanzania: An Appraisal of the Legal Framework (First Edition). Mwanza: Saint Augustine University of Tanzania, 2011. Available at: http://works.bepress.com/dmnyamaka/1 40 arrangements with the external world via websites or email in which case the electronic environment is not suitable in Tanzania in terms of the laws and the technology85. Messages sent via the internet may be garbled in transmission and also the determination of the time in which the message is sent or received as to ascertain offer and acceptance. On the other hand, the requirement of consent i.e. consensus ad idem in contract in electronic contract has become a challenge because in some e-agents are involved to contract. It has become a question as to whether e-agent can amount to consent of the other party to the contract. E-agents are not included in the definition of the laws in Tanzania to mean a person and hence a problem.86 There is a mismatch between the existing regulatory framework on one hand, and cyber contracts specifically on the issues of contract terms and consensus ad idem on the other hand. And that the existing law yet favours a traditional way of contracting i.e. paper based contracts rather than cyber contracts. We employed interview and review methods in the field as our tools to collect the data.87 Therefore, because of the way in which the two forms of contracts differ, electronic commerce raises some new and interesting technical and legal challenges. In recognition of e-contracts in the Law of Contract Act Cap 345. R: E 2002, following question are needed to be considered: 85 Ibid. 86 D, J Nangela, Paper on the Adequacy of the Tanzania Law on E-commerce and E-contracting: Possible Solutions to be Found in International Model and South African Legislation, Department of Commercial Law, University of Cape Town, 2011, page 54. 87 D, M, Nyamaka, Electronic Contracts in Tanzania: An Appraisal of the Legal Framework (First Edition). Mwanza: Saint Augustine University of Tanzania, 2011. Available at: http://works.bepress.com/dmnyamaka/1 41 1. Whether e-contract is a valid contract (recognition)? 2. Would a supplier make details of goods and services with prices available on a website be deemed to have made an offer? 3. Whether e-contracts satisfy the legal requirements of reduction of agreements to sign documents. e-signature 4. Whether e-contracts interpret, adopt and compile the other existing legal standards in the context of electronic transactions? 42 5. Online mistakes or input errors. Rejection of data 6. Electronic evidence Electronic devices. 7. Jurisdiction of the courts and choice of law. 43 All of these questions have not been answered by the Law of Contract Act Cap 345. R: E 2002, thus there is no application of this Law in terms of e-contracts. 4.3 The Legal Areas Challenging the Applicability of E-Contract in Tanzania. Undoubtedly the development of digital technology, for instance the use of electronic communication using computer represents a major challenge and opportunity in this respect. 4.3.1 Intention to create legal relations This is the intention that one will be legally bound by entering into an agreement. Without such an intention, the agreement would not be legally enforceable. 88 In commercial dealings there is a strong presumption that parties have the requisite intention to be bound.89 Obviously, where there is communication between natural persons, intention can be ascertained by interpreting the communications exchanged or the conduct of the parties. Where there is a person-to-person communication online (whether by email or through the web page), the words used could be analysed to ascertain whether the requisite intention exists. In this case, the normal test of facts can be used. How can people create a legal intention on online basis?90 4.3.2 Offer and Invitation to Treat. The traditional definition of an offer is an expression of willingness to contract on specified terms, made with the intention that it shall become binding as soon as the person to whom it is 88 Beatson, J. (1998) Anson’s Law of Contract 27th Edition. Oxford Publishing. New York, p 70 89 Edwards v Skyways Ltd [1964] 1 All ER 494. 90 The Law of Contract Act Cap 345. R: E 2002 does not provide for this on online basis. 44 addressed accepts it.91 An offer must however be differentiated from an invitation to treat, which is “a preliminary communication that does not indicate a clear intention to be bound.”92 The distinction between offers and invitations to treat is important for businesses that want to sell, advertise or buy on the internet. A website can be treated as an offer or invitation to treat depending on the words used. As a general rule, advertisements on a website constitute only an invitation to treat. However, where the advertiser gives sufficient detail and demonstrates an intention to be bound, it is an offer. 93When it comes to our law, it is silent on what constitute an invitation and offer in terms of cyberspace. 4.3.3 Revocation of offer Revocation is a method of terminating an offer. As a general rule, an offer can be revoked any time before acceptance.94 It is a requirement that the notice of revocation must actually reach the offeree. Where notice is sent electronically, the question arises: what constitutes actual notice? Is the offer revoked when a message arrives at the offer’s Internet Service Provider (ISP), when the 91 Section 2 (1) (a) of Law of Contract Act [CAP 345. R: E 2002] 92 Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 410. 93 Carlill v Carbolic Smoke Ball Co. [1893] 1QB 256 94 Payne v Cave (1789) 3 Term 148. 45 offeree collects his/her mail from the ISP or when the offeree actually reads the notice?95 The Law of Contract Act Cap 345. R: E 2002 provides revocation of offer for traditional basis.96 4.3.4 Lapse of time. Where an offer states that it is open for acceptance until a certain day, a later acceptance will clearly be ineffective.97 In the absence of an express time limit, offers are normally open for a reasonable time.98 What constitutes reasonable time is a question of fact. A reasonable time in the context of an electronic message may be shorter than conventional post because electronic messages travel fast. Where there is a delay by the offeror, such delay will not count against the offeree (Adams v Lindsell).99A problem arises where there is a delay caused by circumstances beyond the control of the offeror (such as a power cut or delay in the communication system). The law in this area is uncertain.100 Such uncertainty may have commercial significance when the message is an offer to enter into a contract and the delay subsequently enables the offeror to either revoke the offer, or argue that it has lapsed. 95 New Zealand Law Commissions report, (1998) “Electronic Commerce – Part One; A guide to the Legal and Business Community. Web site http://www.lawcom.govt.nz/Ecomm/R50chap7.htm 96 Section 5 (1)of the Law of Contract Act[CAP 345. R: E 2002] 97 Ramsgate Victoria Hotel Co v Montefiore (1886) LR 1 Exch 109. 98 Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) 1953 1 AB 410 99 New Zealand Law Commissions report, (1998)“Electronic Commerce – Part One; A guide to the Legal and Business Community. Web site http://www.lawcom.govt.nz/Ecomm/R50chap7.htm 100 Ibid. 46 Nothing has been explained in our law of contract context relating to lapsing of time when it comes to cyber affairs.101 4.3.5 Acceptance. Acceptance is a final and unqualified expression of assent to the terms of an offer.102 Generally, only the person to whom an offer is made can accept it and the offer must be communicated to the offeree. Acceptance must also correspond to the terms of the offer. The postal rule is an exception to the general rule that an acceptance must be communicated to the offeror. The postal rule states where “the post might be used as a means of communicating the offer, the acceptance is complete as soon as it is posted.”103 The postal rule applies only to the conventional postal service. Later, it was interpreted to include telegrams based on the assumption that sending a telegram is analogous to mailing a letter.104 Other forms of communication are excluded. Telephones are excluded from the rule105 because they are instantaneous and hence analogous to face to face communications. Telexes are also excluded based on the same principle. 106 To date there is no detailed judicial analysis on the 101 Section 6 (b) of the Law of Contract Act [CAP 345. R: E 2002] provides for lapse of time for conventional offers and not non-conventional offers. 102 Treitel, G. (1995) the Law of Contract Ninth Edition. Sweet & Maxwell. London, p 16. 103 Section 4 of the Law of Contract Act [CAP 345. R: E 2002] 104 Phillip Tagini, E-commerce in Vanuatu: Can contract law accommodate for new technology? (visited at www.paclii.org/journals/fJSPL/vol04/10.shtml) 105 Entores V Miles Far East Corporations [1955] 2 QB 327 at 332 in O’shea & Skeahan (1997) at p 252. 106 Brinkibon Ltd v Stahag Stahl mbH [1982] 1 All ER 293 47 application of the rule to facsimiles but given the obvious similarities between telexes and facsimiles, it is likely that facsimiles will be excluded from the postal rule as well.107 From the above developments, it is arguable that the postal rule will not apply to e-commerce communications. It is also contended here that the postal rule will not apply to other forms of communications such as web pages because they are instantaneous. The Postal Rule applied to conventional contract under Section 4 of the Law of Contract Act Cap 345. R: E 2002 is a problematic to e-contracts. 4.3.6 Consideration. Consideration is “the price paid by the promisee for the promisor’s promise.”108 Where the transaction involves businesses, the contract must be supported by something of value such as the promise of a party to provide goods or services, a promise to pay for goods or services or foregoing a benefit.109 While in conventional contracts, payment does not have to be in the form of money, in electronic commerce this is usually the case. The substance of consideration is essentially unaffected by the advent of e-commerce. The New Zealand Law Commission suggested that the form of the contract is affected, not the substance. Even if the substance of the contract may not be affected by the advent of e-commerce, but if even the form of contract is not stipulated under the law, what is the essence of substance? 107 O’shea & Skeahan (1997) Acceptance of offers by E-Mail 13 (QUTLJ) at 255 at p 255 108 Williams v Roffey Bros and Nichols (Contractors) Ltd [1990] 1 All ER 512, see also Section 2 (1) (d) of the Law of Contract Act [CAP 345. R: E 2002]. 109 Thomas v Thomas (1842) 2 AB 851 48 In consideration there must be consensus ad idem (meeting of the minds)110. What if it is between a person and a machine? Does the concept of free consent prevail under this situation? What happen if the consideration seen on the internet is not what physically presented after the other party flourished his consideration? How does the law deal with such confusion? It is still a puzzle among the users of internet in contracting various contracts through such a medium in Tanzanian Laws. 4.3.7 Writing and signature requirements. A signature and writing requirements are generally understood as evidence that the signatory approves of a document’s contents.111 But does this ring true also for a person’s name printed on a telex or fax, or reproduced in electronic mail? Section 9 of the Sale of Goods Act Provides that, “a contract for sale any goods shall not be enforceable by action unless the buyer accepts part of the goods so sold, and actually receives, the goods, or gives something in earnest to bind the contractor in part payment or unless some note or memorandum in writing is made and signed by the party to be charged or by his agent in that behalf”. The writing and signature to both statutes did not explain the matter in cyber world. 4.3.8 The Issue of Time and Place. Non-conventional nature of the internet makes it difficult to establish the time when such communication is sent or received, and from where exactly they were sent. This is a crucial matter when contracting with someone. This also establishes the aspect of law. Traditionally, the 110 Section 13 of the Law of Contract Act Cap 345. R: E 2002. 111 Section 25 (1) (a) of the Law of Contract Act Cap 345. R: E 2002 49 parties are free to choose which law will apply to their relations, as long as it is expressed with reasonable certainty. In the absence of any choice of law, the contract will be governed by the law of the country with which it is most closely associated. Since internet recognizes no borders, the issue of place is vague. Therefore, from the above legal issues based on electronic contracts and many others which were not expressed in this paper, it is evident that, no matter what we do, except amendment of the laws, there would be no such a thing, named electronic contract supported by the Act.112 112 The Law of Contract Act Cap 345. R: E 2002 50 PART E PERSONAL ASSESSMENT. “We need courage to throw away old garments which have had their day and no longer fit for the requirements of the new generation”. Fridtjof Nansen 5.1 Introduction. After looking into the whole concept of contract and the law of contract relating to formation of electronic contracts, it's my believe that the above quotation made by Fridtjof Nansen is suitable enough to tell the Government and other Stakeholders on the drastically fastening of both amendments in our laws, and the creation of new laws specifically on the issue relating to Information and Communication Technologies. For instance, in the business and legal world, people asked whether electronic contracts were real and could transactions formed by electronic messages in an electronic or internet be enforceable. In the matter of law people asked whether the paperless contracts real exist and could be introduced into evidence in the event of a dispute.113 Those questions have been satisfactorily resolved, to a great extent, both on a national and international basis. 5.2 International Basis A key factor in that resolution was the work of the United Nations Commission on International Trade Law (UNCITRAL) and the adoption of the United Nations Model of Electronic Commerce 113 Amelia H. Boss, Electronic Contracting: Legal Problem or Legal Solution? Temple University, Philadelphia, PA. 51 in 1996.114 5.2.1 The United Nations Commission on International Trade Law (UNCITRAL) As early as 1985, UNCITRAL had called upon all national governments to review the legal barriers to electronic commerce found in writing and signature requirements of legal systems.115 Electronic Commerce legal issues focus on three categories that are, contract formation, legal formalities and enforcement. The categories form the basic foundation of Electronic commerce. The UNCITRAL Model law in trying to harmonize the situation addressed the following. 5.2.1.1 The recognition of data message vide Article 5116. The information should not be disregarded or denied legal effect, validity or enforceability solely on the basis that it is in the form of a data message. In supporting this, Professor Michael Geist stated that, “Although the Model Law does not deem electronic communications valid (just as with paper documents, legal validity depends upon more than a document's form), it provides that information or documents will not be denied legal effect or enforceability solely because they are in electronic format”117. 5.2.1.2 The Admissibility of Data Message. Article 9118 entails that, nothing in the application of the rules of evidence shall deny the admissibility of data messages basing solely on the ground 114 Report of the United Nations Commission on International Trade Law on the Work of its Twenty-Ninth Session, United Nations Assembly, 51 Session, Supplement No.17, at United Nations Document A/51/17 Annex I (1996), reprinted in 36 I.L.M 200 (1997). The Model Law is on the website www.unctral.orgy 115 th Official Records of the General Assembly, 40 Session, Supplement No. 17 (A/40/17), Para. 360. This recommendation was endorsed by the General Assembly, United Nations Resolution 40/71, para. 5 (b) 116 UNCITRAL Model Law, page 5. 117 Professor Michael Geist, A Guide to Global E-commerce Law, page 14. 118 UNCITRAL Model Law, page 7. 52 that it is data message or it is not in its original form119. It further entails that, the information in the form of data messages shall be afforded evidential weight and in assessing its regard should be drawn on its reliability, looking at how it was generated, stores or communicated to maintain integrity of the information. 5.2.1.3 Formation and Validity of Electronic Contract. Article 11, states that a contract cannot be denied validity or enforceability simply because it was formed through the means of data messages since offer and acceptance of the offer can be expressed by data messages unless otherwise agreed by the parties on the format of the contract.120 5.2.1.4 Signature and Writings as Legal Requirements. Article 6121 provides that a legal requirement to provide information or a document sent "in writing" is satisfied by its electronic equivalent if it is in a form that can be subsequently accessed and used by the recipient. 5.2.1.5 Integrity of the Information. Electronic documents will satisfy a legal requirement for "original" documents if there is a reliable assurance as to the integrity of the information and that the information is capable of being displayed to the person to whom it is to be presented.122 The question of whether an assurance is reliable is to be determined in the light of all the circumstances, including the purpose for which the document was created. 123 119 Professor Michael Geist, A Guide to Global E-commerce, page 15. 120 UNCITRAL Model Law 121 Ibid 122 Article 8 UNCITRAL Model Law 123 Professor Michael Geist, A Guide to Global E-commerce, page 16 53 Thus in terms of international legal regime the United Nations Commission on International Trade Law (UNCITRAL) and the adoption of the United Nations Model on Electronic Commerce of 1996, have try to open the doors to those countries which are still facing some obstacles on the issue of electronic contract. 5.3 National Basis. Many countries have tried to adopt the United Nations Commission on International Trade Law (UNCITRAL) and the adoption of the United Nations Model on Electronic Commerce of 1996, and sometimes creating their own laws basing on UNCITRAL. 5.3.1 Hong Kong. Hong Kong has adopted some provisions of UNCITRAL, for example under the Electronic Transactions Ordinance, Ord. No. 1 of 2000, some principles relating to formation and validity of electronic contracts has been endowed. On the matter of admissibility of electronic records, Section provides that, “electronic records ought not to be accorded weight as having evidential value without regarding it as a mere electronic records”. This entails that; electronic records/data can have the same weight as the one which is in paperwork transactions Basing on the legal requirement of any document being in writing and signed, Sections 5 and 6 of the Ordinance refers requirement of writing and digital signature respectively. This is to say articles 6 and 7of the UNCITRAL Model Law has been applied effectively. The concept of offer and acceptance in electronic contracts. Section 18 of the Ordinance reflects the situation of the offer under electronic contracts and section 19 refers to situation on which 54 acceptance is addressed under different situations in due course of entering into electronic contract. And lastly, on addressing the issue of formation and validity of electronic contract, under Section 17 of the Ordinance, the contract shall not be denied its validity on the fact that it was or it is resulted from the electronic medium. 5.4 Recommendations: The following are the areas that need legislation either to be amended or enacted to effectively regulate: 1. Where the intention is generated by a computer which is programmed to make or accept offers once particular information is received, legislation must be enacted to deem that a data message is attributable to a party if it was sent by its authorized electronic agent. 2. To avoid confusion about the application of the postal rule to electronic communication, legislation must state clearly whether or not the postal rule of acceptance applies. 3. To minimize the confusion about what when the time would lapse for an offer, legislation must be enacted so that a message is deemed to have been received when it would have ordinarily been received but for the circumstances outside the control of the parties. 55 4. Where writing and signature are requirements for certain forms of contract, legislation must be enacted to state that this requirement is deemed to be met when a data message is communicated via a reliable method.124 5.5 Conclusion. “The law is the last interpretation of the law given by the last judge” Anon. Seen the problem it is not a problem, but seen the problem and letting it the way it is, it is a problem. This is simply because we have already seen the problem, then what is our step towards it? Are the steps we are taking sufficient enough to eradicate or reduce the problem, currently and in the future? Once David Ben Gurion argued that, “It’s not enough to up to date; you will have to be up to tomorrow”125 124 These recommendations have extracted from E-commerce in Vanuatu: Can contract law accommodate for new technology? Written by the Author Phillip Tagini, Graduate Assistant, School of Law, University of South Pacific. www.paclii.org/journals/fJSPL/vol04/10.shtml 56 The contracts are generally governed by the Law of Contract Act [CAP 345 R.E. 2002] but courts of law may extend and develop some principles where necessary, to fill these gaps, as it was in the case of Trust Bank Ltd v. Le-Marsh Enterprises Ltd., Joseph Mbui Magari, Lawrence Macharia126 in which the court ruled that the electronic evidence is admissible in Tanzania courts and this was a departure from the strict rule of best evidence rule. This must not only ended on this case, but judges through readings, expertise in ICT and other relevant authority must not hesitate to judge those cases even if it lacks jurisdiction, because “the law is the last interpretation of the law given by the last judge”.127 Once Mahatma Gandhi, argued that, “We get the Government we deserve. When we improve, the Government is also bound to improve”128 125 rd Edition (New Delhi: Universal Law Publishing Vakul Sharma, Information Technology-Law and Practice, 3 Co.Pvt. Ltd., 2011), page 10. rd Edition (New Delhi: Universal Law Publishing 128 Edition (New Delhi: Universal Law Publishing Vakul Sharma, Information Technology-Law and Practice, 3 Co.Pvt. Ltd., 2011),pg xi. 126 H.C., (Com. Div.) at DSM, C.C. No.4 of 2000, (unreported) 127 rd Vakul Sharma, Information Technology-Law and Practice, 3 Co.Pvt. Ltd., 2011), page 46. 57 On the above quotation, it is the duty of the government of the United Republic of Tanzania to ensure that its laws cope with the development of science and technology, and fully participate in e-commerce specific legislation enactment (for example in Kenya they have the Electronic Transactions Bill of 2007 which is supported by USAID, E-legislation Policy Development Initiative for the East African Community which will soon be an ACT) so as to avoid these mischief brought by the advancement of science and technology, because her citizens deserve to accords with the technological advancement, then the Government must also accords the laws to meet the demand of these changes. This must go hand in hand with the provision of education for the advancement of science and technology, and the awareness of the danger that could be brought by the said advanced science and technology. 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E-mail Address: [email protected] 64 Phone No: +255716348882, +255687565680, +255752140992 Occupation: Student (LL.B Degree Holder (2012) and LL.M-ICT LAW Candidate (2013) Tumaini University Iringa University College. 65