Benchmarking of existing national legal e-business practices

Transcription

1 Benchmarking of existing national legal e-business practices DG ENTR/04/68 Country report - Ireland Ref Country report Ireland Date 19 September 2006 Prepd. Robert McDonagh and Philip Nolan, Hayes+Curran

2 Table of Contents Ireland 1.1 General information about the national legal system 1 2. Electronic signatures National legislation and administrative practices Cross border regulatory issues 5 3. General elements of electronic contract law National legislation and administrative practices Electronic invitation to make an offer, submission of an offer and acceptance of an offer Information obligations in relation to electronic contract conclusion Standard terms and unfair clauses Choice of law and forum Cross-border regulatory issues Electronic invoicing, payment and other matters related to execution of electronic contracts National legislation and administrative practice in the fields of electronic invoicing, payment and delivery Electronic invoicing Electronic payment Delivery of the good or provision of services ordered electronically Non performance of the obligation to deliver or late delivery Right of withdrawal from the contract in B2C transactions on goods and services Delivery of a good that is not in conformity with the contract Cross border regulatory issues General assessment Main legal and administrative barriers to e-business Awareness about national authorities information and assistance role in e-business Legal and administrative best practices in e-business 26 ANNEX: NATIONAL LEGISLATION ON E-BUSINESS 27

3 Ireland 1.1 General information about the national legal system The Republic of Ireland is a sovereign independent State. It is a liberal democracy with a parliamentary system of government. It comprises approximately 80% of the island of Ireland and is a member of the European Union. The territory concerned by this report is the 26 county Republic of Ireland. The 1937 Bunreacht na heireann ( Irish Constitution ) sets out the broad principles which underpin the Irish legal framework. Ireland is a common law jurisdiction. This means that there are two main bodies of law, legislation and common law. Common law is the term given to the body of law which has been developed by the judiciary over the last nine centuries and is of binding precedent. Legislation remains a more authoritative source if it covers the particular area concerned. The interpretation of legislation by the Courts, nevertheless, is of binding precedent. In Ireland decisions of a higher Court must be followed by a lower Court. This is to be contrasted with the civil law system which has a much more comprehensive legislation, which attempts to deal with every legal contingency, and where the previous decisions of the Courts are not as important. Higher Courts can overrule as they please but in practice there is deference to lower Courts decisions. It is very rare that Courts of similar jurisdiction overrule previous decisions, instead preferring to distinguish previous decisions. Cases from other jurisdictions are not binding on the Irish Courts but can, in certain instances, provide persuasive authority. Decisions of the European Court of Justice are binding on the Irish Courts. Legislation may be introduced to deal with any issues which a judicial decision creates or to circumvent the effect of a judicial decision. This happens occasionally when a Court rules a law unconstitutional or criticises a law and applies it strictly, against the intention of the legislature. In non-criminal (i.e. civil) cases the rules of evidence declare that the plaintiff must prove his case on the balance of probabilities. This can be contrasted with the criminal Courts where the prosecution must prove its case beyond a reasonable doubt. There is a sizeable difference between the two standards of proof. The reason for the difference is that liberty is not at stake in civil trials. General method for implementation of European Directives European Directives are generally implemented by either primary or secondary legislation. The European Communities Act empowers a government minister to implement directives by way of regulations made under section 3 of that act (secondary legislation). This is the manner in which the majority of directives are implemented in Ireland. Some directives are implemented using primary legislation (i.e. an Act of the Oireachtas 2 (Gaelic for parliament)). Others have been implemented by regulations made under acts other than the European Communities Act No. 27 of For example, the Liability for Defective Products Act 1991 (No. 28 of 1991), implementing Directive 85/374/EEC. 1

4 The methodology used to implement a directive varies on a case by case basis. Generally, a directive is implemented by primary or secondary legislation either: declaring the directive to be applicable; transcribing the directive wholesale or piecemeal; or further articulating the detail required to implement the directive in accordance with its aim. In some instances, a directive may be implemented across various pieces of national legislation. Court system The Irish Court system is governed by the Courts (Establishment and Constitution) Act and the Courts (Supplementary Provisions) Act Articles 34 to 37 of the Irish Constitution provide an outline of the essential elements of the Court system. The Supreme Court is the Court of final appeal in Ireland. It has appellate jurisdiction from the High Court. The High Court has full original jurisdiction in and power to determine all matters and questions whether of law or fact, civil or criminal. There are two further Courts of first instance, the Circuit Court and the District Court. These are known as Courts of limited and local jurisdiction because they can only hear civil claims up to a certain value and criminal cases of a certain nature. They cannot rule on the validity of law. The attraction of using these Courts is the cost factor as they are less expensive than the High Court. The appellate process in Ireland is a single instance model. A District Court decision may be appealed the Circuit Court. A Circuit Court decision may be appealed to the High Court and a High Court decision may be appealed to the Supreme Court. Except in the first case, this is not an automatic right and leave to appeal needs to be granted. The monetary jurisdiction limit in the District Court is 6, The monetary jurisdiction limit in the Circuit Court is 38, The High Court can hear civil claims of greater amounts. One division of the High Court is the Commercial Court which has jurisdiction to hear all claims in commercial matters which have a monetary threshold in excess of 1,000,000. This Court was introduced in response to demand from business interests for a faster, more efficient Court system to meet the needs of local and international business. There are a number of key features of this Court. There is a greater emphasis on case management and the Court registrar has a greater role to play in ensuring that strict pre-trial deadlines in relation to the discovery of documents and fixing the issues of law and fact are met. ADR is encouraged as an alternative. The key weapon in the Commercial Court s armoury is Cost Orders which are no longer left until the proceedings have settled but are now granted at the pre-trial hearings. The Court also requires lead counsel to attend the pre-trial conference and hearings to ensure that there is accurate information given to the Court and to ensure that those present have the authority to deal with issues that arise in the course of these hearings. The commercial Court is regarded as a success in legal circles. 3 No. 38 of No. 39 of

5 The Small Claims Court is a service run through the District Court for claims brought by a consumer against a provider of goods or services. It enables a consumer to take a claim directly, without the use of a solicitor/lawyer. The consumer must have purchased the goods or services as a consumer and the seller must have sold the goods or services in the course of business. The financial limit for a claim before the Small Claims Court is currently Where a claimant chooses to employ the services of a solicitor/lawyer, the claimant does so at his or her own cost. ADR There are various methods of alternative dispute resolution prevalent in Ireland. In particular, there is an especially strong arbitration regime which is governed by the Arbitration Acts ( Arbitration Acts ). Whilst participation is voluntary, the Courts are loath to interfere with an arbitration. The Arbitration Acts provide a framework for international arbitrations and provides for the UNCITRAL model law on International Arbitration. There are some slight amendments to the UNCITRAL model law but these all strengthen the autonomy of the commercial arbitration process. A small amount of business to consumer arbitration also occurs. One notable feature of the Irish arbitration regime is that all Courts are empowered to grant an order staying Court proceedings where the dispute being litigated comes within the terms of an arbitration agreement. An application to stay proceedings is brought in the Court in which the proceedings have been instituted. This allows the arbitration process to take its course without a parallel Court case or a dispute as to jurisdiction. Some statutory bodies have an explicit mandate to investigate disputes of a consumer nature, for example, the function of the Financial Services Ombudsman 6 is to investigate complaints concerning financial institutions and the insurance industry. Also, the Pensions Ombudsman 7 has the power to investigate and determine complaints concerning disputes of fact or law and errors in relation to occupational pension schemes and Personal Retirement Savings Accounts (PRSA). There are a number of arbitration centres in Ireland. For instance, the Dublin International Arbitration Centre is an international arbitration centre in Dublin, Ireland which has developed close links with the ICC Court of Arbitration and the American Arbitration Association. The centre has become a popular venue for arbitration both domestic and international. It is also much in demand as a facility for other non-adjudicative forms of dispute resolution such as mediation and conciliation particularly in the sphere of industrial relations. Another method of alternative dispute resolution is to complain to the relevant regulatory authority. For example, consumers who have a complaint in respect of a certain supplier can complain to the Director of Consumer Affairs who, if appropriate, may intervene to facilitate settlement of the relevant dispute. 5 The Arbitration Act 1954 (No. 26 of 1954), the Arbitration Act 1980 (No. 7 of 1980) and the Arbitration (International Commercial) Act 1998 (No. 14 of 1988). 6 Central Bank and Financial Services Authority of Ireland Act 2004, Section 16, Schedules 6, 7. 7 Pensions (Amendment) Act, Section 5. 3

6 The European Consumer Centre Dublin helps to solve cross-border consumer problems. It first tries to mediate on behalf of the consumer with the retailer or service provider in the other Member State. If this fails it puts consumers in touch with relevant alternative dispute resolution organisations in Ireland and Europe. 2. Electronic signatures 2.1 National legislation and administrative practices The Electronic Commerce Act ( ECA ) implements in Ireland Directive 1999/93/EC on a community framework for electronic signatures. Sections 10 and 11 of the ECA sets out a number of qualifications and exceptions to the application of the ECA. These are discussed further below. The ECA refers to three different types of signatures, namely (i) electronic signatures; (ii) advanced electronic signatures and (iii) advanced electronic signatures based on a qualified certificate. Section 13 of the ECA provides that if by law or otherwise a signature is required or permitted, then, subject to subsection 13(2), an electronic signature may be used. The purpose of section 13 is to provide functional equivalence between hand-written and electronic signatures in most circumstances. Section 2(1) defines an electronic signature so as to include an advanced electronic signature and, accordingly, section 13 applies equally to advanced electronic signatures. Section 13(2) provides that an electronic signature may be used only if the other party consents to the use of an electronic signature. In addition, if the signature is to be given to a public body, the electronic signature must accord with the public body s particular information technology and procedural requirements (including that it be an advanced electronic signature, that it be based on a qualified certificate, that it be issued by an accredited certification service provider or that it be created by a secure signature creation device). The public body must make these requirements public and they must be objective, transparent, proportionate and nondiscriminatory. The ECA carves out specific areas where a simple electronic signature will not enjoy functional equivalence to its paper counterpart. These include where a signature is required to be witnessed (section 14) or where a seal is required to be affixed to a document (section 16). In both these cases an advanced electronic signature based upon a qualified certificate must be used and certain other requirements must be satisfied. 8 No. 27 of

7 Section 22 of the ECA addresses the admissibility in evidence of electronic signatures. It provides that nothing in the application of the rules of evidence shall apply so as to deny the admissibility in evidence of an electronic signature: on the sole ground that the signature is in electronic form, or is not an advanced electronic signature, or is not based on a qualified certificate, or is not based on a qualified certificate issued by an accredited certification service provider, or is not created by a secure signature creation device, or if it is the best evidence that the person or public body adducing it could reasonably be expected to obtain, on the grounds that it is not in its original form. The framework provided by the ECA in relation to the use of electronic signatures is comprehensive and provides reasonable certainty in relation to their use. There is a service provider issuing qualified certificates in Ireland. However, the uptake on the use of advanced electronic signatures has been slow. The apparent confidence in the use of electronic signature for small business may be a factor in the slow uptake in the use of advanced electronic signatures. Further, the historical emphasis on concluding large transactions in paper rather than electronic form may also be a factor. A general lack of awareness of the potential uses of advanced electronic signatures is also relevant. Currently, there are no national identity cards with electronic signatures in Ireland. However, there has been speculation recently about the possible introduction of identity cards. However, it is not clear at this stage whether such cards will have electronic signature components. 2.2 Cross border regulatory issues The ECA defines electronic signatures neutrally and does not differentiate between electronic signatures originating in Ireland and those originating in other Member States. Thus, in principle electronic signatures from other Member States will be treated in the same way as electronic signatures originating in Ireland. Similarly, the ECA does not restrict persons resident in other Member States from obtaining a qualified certificate for use with an advanced electronic signature. 5

8 3. General elements of electronic contract law 3.1 National legislation and administrative practices Directive 1993/13/EC on unfair terms in consumer contracts ( Unfair Terms Directive ) has been implemented in Ireland by the European Communities (Unfair Terms in Consumer Contracts) Regulations and the European Communities (Unfair Terms in Consumer Contracts)(Amendment) Regulations (collectively the Unfair Terms Regulations ). Directive 1997/7/EC on the Protection of Consumers in Respect of Distance Contracts ( Distance Selling Directive ) has been implemented in Ireland by the European Communities (Protection of Consumers in Respect of Contracts made by means of Distance Communication) Regulations and the European Communities (Protection of Consumers in Respect of Contracts made by means of Distance Communication)(Amendment) Regulations (collectively the Distance Selling Regulations ). Directive 1998/6/EC on Price Indications has been implemented in Ireland by the European Communities (Requirements to Indicate Product Prices) Regulations ( Product Prices Regulations ). Directive 1999/44/EC on certain aspects of the sale of consumer goods and associated guarantees has been implemented in Ireland by the European Communities (Certain Aspects of the Sale of Consumer Goods and Associated Guarantees) Regulations ( Consumer Goods and Guarantees Regulations ). Directive 2000/31/EC on information society services, in particular electronic commerce, in the Internal Market ( E-Commerce Directive ) has been principally implemented in Ireland by the European Communities (Directive 2000/31/EC) Regulations ( E-Commerce Regulations ) and the ECA. Directive 2002/65/EC on distance marketing of consumer financial services ( Financial Services Distance Marketing Directive ) has been implemented in Ireland by the European Communities (Distance Marketing of Consumer Financial Services) Regulations and the European Communities (Distance Marketing of Consumer Financial Services)(Amendment) Regulations (collectively the Financial Services Distance Marketing Regulations ). Directive 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market amending 1997/7/EC has not been implemented in Ireland yet. 9 S.I. 27 of S.I. 307 of S.I. 207 of S.I. 71 of S.I. 639 of S.I 11 of S.I. 68 of S.I. 853 of S.I. 63 of

9 3.1.1 Electronic invitation to make an offer, submission of an offer and acceptance of an offer The regulatory framework for electronic contracts is set out in the ECA. As mentioned above, sections 10 and 11 set out certain areas to which the ECA do not apply, similarly to as permitted by Article 9(2) of the E-Commerce Directive. These are, in particular, the law relating to: wills, trusts, enduring powers of attorney, sworn declarations and affidavits, the creation, acquisition or disposal of an interest in real property (but not contracts for the creation, acquisition or disposal of such interest), and the rules, practices and procedures of a Court or tribunal; Consumer Credit Act and the Unfair Terms Regulations; any law relating to the imposition, collection or recovery of taxation or other Government imposts, including fees, fines and penalties, the Companies Act 1990 (Uncertificated Securities) Regulations ; and the Criminal Evidence Act It is notable that many provisions of the ECA contain the phrase unless otherwise agreed which enables the parties to reach their own agreement as to what rules should apply to any contract they conclude. Section 15 of the ECA confirms that electronic contracts within the State are subject to existing consumer law and that the role of the Irish Director of Consumer Affairs shall apply equally to consumer contracts, whether or not concluded electronically. The general rule is that a contract does not have to be in writing before it can be enforced 21. Section 2 of the Statue of Frauds (Ireland) Act 1695 ( Statute of Frauds ) and the Sale of Goods Act 1893 and ( SGA ) provide exceptions to this rule and generally requires the following to be evidenced in writing: contract of guarantee; contract made in contemplation of marriage; contract for the sale of lands or an interest therein; contract not performed within one year; and contract for the sale of goods in excess of It seems by virtue of the ECA that this requirement will be satisfied where the evidence is in electronic form. 18 No. 24 of S.I. 68 of No. 12 of McDermott, Contract Law (First Edition), paragraph See, for instance, Pernod Ricard & Comrie plc v FII (Fyffes) plc, 21 October 1998 (unreported) High Court and 11 November 1988 (unreported) Supreme Court. 22 No. 16 of

10 Section 19 of the ECA provides, in general terms, that an electronic contract shall not be denied legal effect, validity or enforcement solely on the grounds that it is wholly or partly in electronic form, or has been concluded wholly or partly in electronic form. The ECA defines an electronic contract as a contract concluded wholly or partly by means of an electronic communication. Thus, a contract could consist of a mixture of paper documents and electronic communications. Section 19 further provides that, in the formation of a contract, an offer, acceptance of an offer or any related communication (including any subsequent amendment, cancellation or revocation of the offer or acceptance of the offer) may, unless otherwise agreed by the parties, be communicated by means of an electronic communication. The ECA does not address when and where a contract is formed and, consequently, the common law applies in this regard. In order for there to be a binding contract, there must be an offer, an acceptance, consideration and an intention to create legal relations. There is no statutory definition of what constitutes a valid and binding offer or a valid and binding acceptance. However, it is clear from the ECA that both may be made electronically unless the parties agree otherwise. The common law draws a distinction between offers and invitations to treat which is central to whether or not a contract has been concluded. An offer is a clear and unambiguous Statement of the terms upon which the first party is willing to contract, should the person or persons to whom the offer is addressed decide to accept 23. This may be accepted by a final and unequivocal expression of agreement to the terms of the offer. Irish law recognises that acceptance may be communicated expressly or, in certain circumstances, implicitly by conduct 24. The general rule is that acceptance is not valid unless made with the intention of accepting the offer. The offer can generally be withdrawn prior to, but not after, valid acceptance 25. An invitation to treat, on the other hand, is a Statement made in circumstances where it is not intended that a contract will result if the person to whom the Statement is made indicates his assent to its terms 26. Thus, an invitation to treat cannot be accepted but rather may invite an offer from the other party which can then be accepted or rejected. The ECA does not confirm whether or not an advertisement on a website constitutes an offer or merely an invitation to treat. This lack of clarity creates a certain degree of uncertainty. For instance, if the advertisement is found to be an offer, then the placing of the order may constitute an acceptance in which case terms and conditions set out in an acknowledgment of the order will not be binding without more even though this may not have been the subjective intention of the supplier. Generally, it seems that an internet advert may be treated as an invitation to treat; however, this will fall for the Courts to decide based on the particular facts of each case. Ultimately, it seems that the test will be that of the intention of the retailer, objectively ascertained. However, there is no reason why a webpage could not amount to an offer in appropriate circumstances Clark, Contract Law in Ireland (Fifth Edition), page Billings v Arnott (1945) 80 ILTR McDermott, Contract Law (First Edition), paragraph McDermott, Contract Law (First Edition), paragraph McDermott, Contract Law (First Edition), paragraph

11 The ECA also does not confirm whether the instantaneous receipt or postal rule applies in relation to the formation of an electronic contract and, accordingly, it will be up to the Courts to resolve which rule to apply in a particular case. Again, this creates a certain degree of uncertainty. Under the postal rule the contract is concluded upon posting of the acceptance by the offeree so that the contract is considered to be formed when and where that posting took place whether or not the message ultimately arrived 28. Under the instantaneous receipt rule, the contract is only complete when the offeror receives the acceptance 29. In the latter event, the contract is formed when and where the receipt occurred. Whichever rule applies, the time at which an electronic communication is sent or received is crucial to determining when and where a contract has been concluded. Section 21 of the ECA sets out the rules which apply in this regard. It provides that where an electronic communication enters an information system, or the first information system, outside the control of the originator, then, unless otherwise agreed between the parties, it is taken to have been sent when it enters such information system or first information system. Section 21(2) provides that if the recipient has designated an information system for the purpose of receiving electronic communications, the electronic communication is deemed to have been received when it enters that system unless otherwise agreed or unless the law provides otherwise. Section 21(3), on the other hand, provides that if the recipient has not designated such an information system, the electronic communication is taken to have been received when it comes to the attention of the addressee unless otherwise agreed. However, regulation 14(1)(b) of the E-Commerce Regulations would seem to supersede section 21(2) of the ECA. This provides that, notwithstanding the ECA, where the recipient of the relevant service places his or her order through electronic means, the order is deemed to be received when the parties to whom they are addressed are able to access them. Regulation 14(1)(a) requires the relevant service provider to acknowledge the receipt of the order without undue delay and by electronic means 30. Again, this acknowledgement is deemed to have been received, pursuant to regulation 14(1)(b) when the parties to whom it is addressed are able to access them. Neither the ECA nor the E-Commerce Regulations define when and where a party is able to access an electronic communication which leaves scope for uncertainty in this respect. Significantly, section 20 of the ECA provides that if the originator of an electronic communication indicates that receipt of the electronic communication is required to be acknowledged, the electronic communication, in relation to the establishing of legal rights and obligations between parties, shall, until the acknowledgement is received by the originator and unless the parties otherwise agree, be treated as if it had never been sent. 28 Hedley, The Law of Electronic Commerce and the Internet in the UK and Ireland, page McDermott, Contract Law (First Edition), paragraph Regulation 14(1)(a) does not apply if the parties agree otherwise in a non-consumer contract or if the contract is concluded exclusively by exchange of electronic mail or by equivalent individual communications. 9

12 The ECA also illustrates where an electronic communication is sent from and received which provides guidance in relation to where a contract has been formed. Section 21(5) defines the place of sending and receiving of an electronic communications as the place of business of the sender and receiver, respectively, unless otherwise agreed. If a party has more than one place of business, the place of sending or receipt is the place of business that has the closest relationship to the underlying transaction. If there is no underlying transaction, the place of sending or receipt is the principal place of business. If a party has no place of business, the place of sending or receipt is where he ordinarily resides. Regulation 14(2) of the E-Commerce Regulations requires a relevant service provider to make available to the recipient of the service appropriate, effective and accessible technical means allowing him or her to identify and correct input errors, prior to the placing of the order 31. In certain instances, the Courts may imply terms into a contract which were not expressly agreed by the parties. This is generally on the basis that: the term is so obvious that it goes without saying that the bargain is subject to this unstated term 32 ; or it is felt by a Court to be necessary to do so 33. This will in all cases depend on the particular circumstances Information obligations in relation to electronic contract conclusion The Distance Selling Regulations apply in relation to distance contracts with consumers only. Regulations 4 and 5 of the Distance Selling Regulations require distance sellers to provide information to consumers. Regulation 4 requires the supplier, in good time prior to the making the contract, to provide the consumer with certain prescribed information in a clear and comprehensible manner. This information must be provided in a way appropriate to the means of distance communication used with due regard to any enactment or rule of law requiring good faith in commercial transactions or governing protection of those who are unable to give their consent, such as minors. The distance contract may not be enforceable against the consumer if this information is not provided in this way. Neither the Distance Selling Directive nor the Distance Selling Regulations define what a good time is. Accordingly, it would seem that what a good time is may differ depending on the circumstances and, in particular, on the nature of the distance contract in question. Suppliers may thus have to adopt different standards depending on the particular circumstances which creates uncertainty and a further hurdle for suppliers to overcome. The information to be provided includes the commercial purpose of both the proposed contract and certain prescribed information which mirrors that contained in Article 4(1) of the Distance Selling Directive. 31 Regulation 14(2) does not apply if the parties agree otherwise in a non-consumer contract or if the contract is concluded exclusively by exchange of electronic mail or by equivalent individual communications. 32 Clark, Contract Law in Ireland (Fifth Edition), page Clark, Contract Law in Ireland (Fifth Edition), page

13 The distance supplier is also required, further to Regulation 5, to provide the consumer with written confirmation (or confirmation in another durable form accessible to the consumer) of the some of the information referred to above unless it has already given the information to the consumer prior to making the contract in such a form. This information mirrors that referred to in Article 5 of the Distance Selling Directive. Further provisions apply if contact is made with the consumer by telephone. In light of the provisions of the ECA, it would seem that the requirement to provide information and written confirmation of the relevant information may, arguably, be satisfied where the information is supplied in an electronic manner. Certain types of contracts are excluded from the application of some or all of the provisions of the Distance Selling Regulations. Consumers are afforded protection in relation to contracts relating to financial services pursuant to the Financial Services Distance Marketing Regulations. The Financial Services Distance Marketing Regulations are broadly similar to the Distance Selling Regulations. Regulation 4 requires the supplier, within a reasonable time before a consumer is bound by the distance contract, to provide the consumer with certain prescribed information in a clear and comprehensible. This information must be provided in a way appropriate to the means of communication used and must comply with any enactment or rule of law requiring good faith in commercial transactions or governing protection of those who are unable to give their consent, such as minors. The distance contract may not be enforceable against the consumer if this information is not provided in this way. Neither the Financial Services Distance Marketing Regulations nor the Financial Services Distance Marketing Directive define what is a reasonable time. Accordingly, it would seem that what is reasonable may differ depending on the circumstances and, in particular, on the nature and complexity of the financial service in question. Suppliers may thus have to adopt different standards depending on the complexity of the particular product offered which creates uncertainty and a further hurdle for suppliers to overcome. The information to be provided includes the commercial purpose of the proposed contract and certain prescribed information which reflects that contained in Article 3 of the Financial Services Distance Marketing Directive. In addition, further to regulation 9 the supplier must provide the consumer with all of the terms of the contract and the information referred to above in writing or via a durable medium accessible to the consumer within a reasonable time before entering the distance contract. The supplier must also provide the terms and conditions, on request, to the consumer printed on paper at any time during the life of the contract. The contract may not be enforceable against the consumer if these obligations are not complied with. Further provisions apply if information relating to the supply of a financial service is given by telephone. In addition to the above information requirements, the E-Commerce Regulations require further information to be provided to recipients of relevant services (i.e. an information society service). The E-Commerce Regulations apply in relation to both B2B and B2C transactions. 11

14 Regulation 7 requires a relevant service provider to provide certain prescribed information to the recipients of the services in a manner which is easily, directly and permanently accessible to the recipients of the service and to the Director of Consumer Affairs. This information reflects that set out in Article 5 of the E-Commerce Directive and includes, in addition, an obligation to provide details of how natural persons can register their choice regarding unsolicited commercial communications. Furthermore, regulation 8 requires a communication that is part of a relevant service to comply with a number of conditions. This provision reflects Article 6 of the E-Commerce Directive and includes, in addition, an obligation to provide details of how natural persons can register their choice regarding unsolicited commercial communications. Regulation 13 contains further information requirements. It provides that, subject to certain exceptions, prior to the placing of an order online, the service provider must provide the certain prescribed information clearly, comprehensively and unambiguously to the proposed recipient of the service. This information reflects that set out in Article 10 of the E- Commerce Directive and includes the languages offered for the conclusion of the contract. Regulation 13(2) requires the service provider, on the placing of an order or as soon as practicable thereafter, to indicate to the recipient which relevant codes of conduct, if any, the service provider subscribes to and information as to how those codes can be consulted electronically 34. In addition, Regulation 13(3) provides that the service provider must, in relation to contracts to be concluded by electronic means, also make the terms and conditions provided available to recipients of the service in a way that will allow them to store and reproduce them. The information obligations contained in the Distance Selling Regulations, the Financial Services Distance Marketing Regulations and the E-Commerce Regulations aim to ensure a high level of transparency in relation to e- commerce transactions and services. However, from a business perspective, these regulations create an additional burden which must be adhered to. There is an overlap between the various regulations which could perhaps be codified to simplify compliance. It seems that a large number of small businesses are not complying with their information obligations under the Distance Selling Regulations and the E-Commerce Regulations. This may be due to the cost of compliance as well as a general lack of awareness of their obligations. A more rigorous approach to enforcement of the Regulations may be required in this regard., There seems to be a higher level of awareness and compliance with respect to the Financial Services Distance Selling Regulations. This appears to be due to the fact that many of these businesses are subject to day to day regulation as financial service providers and, consequently, have the processes in place to ensure compliance with their legal obligations. There is no legal requirement to set out the country of origin of the goods concerned. 34 Regulation 13(2) does not apply if the parties agree otherwise in a non-consumer contract or if the contract is concluded exclusively by exchange of electronic mail or by equivalent individual communications. 12

15 3.1.3 Standard terms and unfair clauses A person can only be bound under Irish law by terms and conditions which the person accepted. A person cannot accept terms and conditions which were not communicated to him or her 35. Thus, whether or not a person is bound by a click-wrap (i.e. a point and click agreement) or browse wrap (i.e. non-point and click agreements) agreement may depend on whether the terms and conditions have been communicated to the person and in turn accepted. Whether the terms and conditions were communicated would seem to be a question of fact in each case and may turn upon whether or not the other party took reasonable steps to bring the terms and conditions to the participant s attention before contract 36. There is no Irish case law expressly acknowledging the enforceability of click-wrap or browse-wrap agreements. As a matter of practice, website operators use click-wrap agreements to incorporate the terms of sale or supply and browse-wrap agreements for the terms of use of websites. There is decided case law to the effect that signature of a contact is sufficient to incorporate a term into the contract and that a term of such a contract will bind the signatory notwithstanding that he or she has not actually read them 37. This would seem to apply equally to contracts concluded by electronic signature by virtue of the ECA. Accordingly, it seems in principle that a person may be bound by a click-wrap agreement provided the terms and conditions are available and communicated to the person. Requiring a person to scroll through the terms and conditions of sale before clicking the I Accept icon may overcome any evidential hurdle in this respect. There is case law which indicates that it may be possible for terms and conditions to be incorporated by reference into a binding relationship between parties even though the party has not seen or read a copy of the terms and conditions. The circumstances are usually where this is explicitly agreed between the parties and a copy of the terms and conditions is available 38. Accordingly, it is possible that a person may be bound by a click-wrap agreement in certain circumstances where they are not required to scroll through the terms and conditions if there is a readily accessible hyper-link to the terms and conditions. There is no case law in Ireland directly on this point. However, it appears from general Irish contract law that this mechanism may not be as effective to incorporate all terms under Irish contract law as where the person is required to scroll through the terms and conditions before accepting. On the other hand, it would seem that there may be evidential difficulties proving that a person has accepted terms and conditions which are simply made available by hyperlink somewhere on a website in the absence of a requirement to click an I agree icon. 35 Tansey v the College of Occupational Therapists [1995] 2 ILRM Shea v Great Southern Railways (1944) Ir Jur Rep Siebel v Kent (1 June 1976, unreported) High Court, Duff v GNR (1878) 4 LR (Ir) 178 and L Estrange v Graucob [1934] 2 KB Tierney v An Post (7 July, 1998, unreported) High Court and Sweeney v Mulcahy [1993] ILRM

16 The enforceability of the terms of a browse-wrap agreement may depend, in particular, on: the nature of the terms themselves; the accessibility and availability of the terms; and whether, objectively considered, a reasonable person in the circumstances would have known such terms were intended to bind them. While there has been no direct attack in this jurisdiction on the rule that signature will incorporate a term into a contract, there is persuasive (but non-binding) case law in other jurisdictions which suggests that surprisingly onerous or unusual terms may be required to be brought fairly and reasonably to the attention of the signatory to bind him 39. There is also evidence in Irish case law to suggest that a signature will not always automatically incorporate a clause which seems to support this position 40. Therefore, a party may be required to show that an unduly burdensome or unusual term was fairly and reasonably brought to the attention of the other party in order to enforce that condition 41. This may have ramifications in relation to both click-wrap and browse-wrap agreements. A number of other factors may also be relevant in determining whether a term is enforceable. The common law principle of freedom to contract is circumscribed and limited in the area of consumer contracts by numerous laws which have been enacted to protect consumer interests. The Unfair Terms Regulations are an example. Section 15 of the ECA confirms that such consumer legislation applies equally to electronic and non-electronic contracts. The Unfair Terms Regulations provide protection for Irish consumers entering into contracts including e-commerce contracts. These regulations do not apply to business to business transactions. Consequently, the general principle of freedom to contract applies in a B2B context. Regulation 3 of the Unfair Terms Regulations provides that the regulations apply, subject to certain exceptions, to any term in a contract concluded between a seller of goods or a supplier of services and a consumer if it has not been individually negotiated. The exceptions are: contracts of employment; contracts relating to succession rights; contracts relating to rights under family law; contracts relating to the incorporation and organisation of companies and partnerships; and terms which reflect mandatory, statutory or regulatory provisions of Ireland and the provisions or principles of international conventions to which the Member States or the EU are party. A term is regarded as not having been individually negotiated if it has been drafted in advance and the consumer has therefore not been able to influence its substance. Thus, the terms of a click-wrap or browse-wrap agreement are likely to be subject to the Unfair Terms Regulations. 39 Ocean Chemical v Exnor Craggs [2000] 1 All ER (Comm) 519 and Crocker v Sundance Northwest Resorts Ltd (1988) 51 DLR (4th) McDermot, Contract Law (First Edition) at paragraph Carroll v An Post [1996] 1 IR

17 It is for a seller or supplier who claims that a term was individually negotiated to show that it was. Regulation 6 provides that any unfair term in a contract concluded with a consumer by a seller or supplier of services is not binding on the consumer. While the unfair term will not bind the consumer, the contract itself will continue to bind the parties if the contract is capable of continuing in existence without the unfair term. Regulation 3 provides that a term is regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties rights and obligations under the contract to the detriment of the consumer, taking into account the nature of the goods or services for which the contract was concluded and all circumstances attending the conclusion of the contract and all other terms of the contract or of another contract on which it is dependent. These circumstances may include the manner in which the seller purported to bind the consumer to the terms in the first place. Further to regulation 3, in determining if a term satisfies the requirement of good faith, regard is had to the matters set out in Schedule 2 of the Unfair Terms Regulations. These are: the strength of the bargaining positions of the parties; whether the consumer had an inducement to agree to the term; whether the goods or services were sold or supplied to the special order of the consumer; and the extent to which the seller or supplier has dealt fairly and equitably with the consumer whose legitimate interests he has to take into account. An indicative and non-exhaustive list of the terms which may be regarded as unfair are set out in Schedule 3 to the Unfair Terms Regulations. These terms mirror the terms set out in the Annex to the Unfair Terms Directive. Regulation 5 provides that if a consumer contract is in writing, all terms must be in plain, intelligible language. Terms are interpreted in favour of the consumer if there is a doubt as to the meaning of a term. Regulation 8 of the Unfair Terms Regulations empowers the Director of Consumer Affairs or a consumer organisation to apply to the High Court for an order prohibiting the use or continued use of terms adjudged by the High Court to be an unfair term. Although the Director has, on occasion, applied to the High Court for orders seeking to have the terms in particular consumer contracts declared unfair, generally, however, it seems that the Director of Consumer Affairs engages in a process of consultation with the relevant supplier in relation to terms considered to be unfair before instigating enforcement action. Sections of the Sale of Goods Acts 1893 and 1980 ( SGA ) and section 39 of the Sales of Goods and Supply of Services Act 1980 ( SGSSA ) imply a number of terms into contracts for, respectively, the sale of goods and the supply of services. Both the SGA and the SGSSA apply to B2B and B2C transactions; however, the manner in which they apply varies in each case. Section 55 of the SGA provides that the terms implied by sections of the SGA (dealing with the sale of goods) may not be excluded if the buyer deals as a consumer. Any term purporting to do so is void. 15

18 If the buyer deals other than as a consumer, a term excluding these implied terms, with the exception of the term implied pursuant to section 12, will only be enforceable if it is shown that it is fair and reasonable. The term implied by section 12 cannot be excluded in any case and a clause purporting to do so will be void. Similarly, section 40 (dealing with the supply of services) of the SGSSA provides that the terms implied by section 39 of the SGSSA may only be excluded or varied in the case of a consumer contract by an express term if it is fair and reasonable and the term has been specifically brought to the attention of the consumer. Section 46 of the SGSSA is also relevant. This provides that any provision in an agreement for the sale of goods or supply of services which excludes or restricts any liability to which a party may be subject by reason of a misrepresentation made before a contract was made, or any remedy available to the other party by reason of such misrepresentation, is not enforceable unless it is shown to be fair and reasonable. Pursuant to section 45 of the SGSSA, a person who entered into a contract after a misrepresentation has been made to him is entitled in certain circumstances to rescind the contract, without alleging fraud, if the misrepresentation has become a term of the contract or the contract has been performed. The doctrine of unconscionable bargain and the doctrine of fundamental breach may also be relevant. In certain circumstances the laws of equity may intervene to set aside as unconscionable a transaction if the parties to the transaction have unequal bargaining positions and the weaker party has not been adequately protected. It is usually assumed that the parties in a B2B transaction will be in equal bargaining positions and that accordingly the doctrine may not be applicable. However, this is not always the case. While it may be difficult to obtain relief from an allegedly unfair bargain if the transaction is struck between two commercial organisations, the case of O Flanagan v Ray-Ger Ltd. 42 seems to indicate that even business transactions may not be immune from the doctrine of unconscionable bargain. The doctrine of fundamental breach provides that a clause may not be drafted so wide as to permit the proferens to avoid liability in cases which amount to non-performance of the essential part of the contract 43. However, there is certain authority which suggests this doctrine may no longer find favour with the Irish Courts 44. In addition, certain contracts or terms may be unenforceable on grounds of public policy such as a contract to publish libellous material or to defraud the Revenue April 1983, (unreported) High Court. 43 Clayton Love v B & I Transport (1970) ILTR Western Meats Ltd v National Ice and Cold Storage [1982] ILRM 99 and Fitzpatrick v Harty and Ballsbridge International Bloodstock Sales, 25 February 1983 (unreported) High Court. 16