CHAPTER ONE.

ABSTRACT

The increase in digitisation and a digitised economy, brought to the front-burner

the need to be able to effectively regulate and manage business relations
digitally, particularly the sphere of electronic contracts and its enforceability. It
has thus become imperative for more than a cursory glance to be given to the
concept of electronic contracts and its enforceability in Nigeria. The legal
landscape in Nigeria, has evolved to recognise the enforceability of electronic
contracts by its entrenchment of certain provisions into law. However, despite
these provisions, challenges abound and there is the need for the enactment of a
comprehensive law that caters solely to electronic contracts like the the Law
Reforms (Contract) law of Lagos state, 2015 which caters for traditional
contracts, instead of the continued recourse to fragmented laws on the concept.
Hence, though Nigeria has made laudable steps towards ensuring the
enforceability of electronic contracts in the country, there is still the need for
Nigeria to enact a specific law to adequately provide for the advancement and
enforceability of electronic contracts in the country.

1.1. INTRODUCTION

Electronic transactions are rapidly becoming the order of the day. The advent of electronic

commerce has enabled global transactions and greatly improved commercial relations between

persons or companies, internationally. A key area in fostering these transactions is electronic

contracts. While Nigeria has recognised the validity of electronic contracts, much still needs to

be done in enacting laws which will enhance enforceability of and promote consumer’s security

in electronic contracts.

It is, however, important to first examine what contracts are in general before one narrows in

particularly on what electronic contracts entail. Contract is defined as “a promise or set of

promises the law will enforce” . Professor Sagay also defines a contract as “an agreement which

1
the law will enforce or recognise as affecting the legal rights and duties of the parties1”.

Therefore, electronic contracts can be defined as an agreement between two parties carried out

through electronic means, creating rights and duties which the law will enforce. Electronic

contracts simply mean the same thing with the only distinction being the mode of creating such

contractual relationships, which is electronically.

In its earliest form electronic contracts were carried out via electronic mails. Presently, with the

advancement of technology, it can be created on social media platforms that allows for human

interactions such as WhatsApp, Instagram, etc or by engaging online stores such as Jumia,

Konga.etc. It also covers contracts between applications or softwares and their consumers.

As with contracts conducted physically, depending on the nature of the contract, electronic

contracts may be compulsorily required to be in writing or may be inferred from conduct or

entered into orally. Notably electronic contracts are recognised in Nigeria, however the emphasis

of the law is on electronic signatures. There is little or next to no law regulating other areas of

electronic contracts. This project seeks to explore this oversight of the law and probe the

effectiveness of available laws in Nigeria in regulating electronic contracts in all forms.

1.2. STATEMENT OF PROBLEM

Prior to the influx of electronic contracts, contractual relations were executed manually.

Contracts were entered face-to-face and there was no confusion as to what point was to be

considered an offer or acceptance. The world suddenly became digital, resulting in online

1
Sagay, Nigerian law of contract (2nd ed., 2000), p. 1

2
transactions and introduced the concept of electronic contracts. With the continued advancement

in technology, it is obvious that the concept of electronic contracts is here to stay and may very

well be the future of contracts, globally. As a result, there is now a heightened need for clear and

concise laws that regulate the enforceability of electronic contracts, particularly in Nigeria.

Also while electronic contracts have undoubtedly brought with it numerous advantages in

relation to commercial transactions in Nigeria, particularly in improving international relations

between persons seeking to enter into a contract cross-country, there is no specific law enacted in

Nigeria that caters to it. Rather what obtains, is a fragmentation of different areas of electronic

contracts in different laws in Nigeria. This has left many areas concerning electronic contracts

without proper regulation and this has left contracting parties scrambling to identify and piece

together the fragments provided for in law. Unfortunately, even those areas provided for in law

are still fraught with problems which need to be addressed in order to ensure and enhance

electronic contracts and secure its enforceability.

Furthermore, although the available laws in Nigeria recognise and make provision for electronic

signatures, majorly its validity, enforceability and admissibility as evidence, there is no all

encompassing law that adequately regulates electronic signature. Also in relation to electronic

contracts required to be presented in their original copy, the law does not provide for this

expressly. Rather, the position of the law on this is implied from the definition of documents

provided in Section 258 of the Evidence Act, 20112.

2
See p.

3
Moreso, there is no adequate provision in law for the common man engaged in an online contract

which turns fraudulent and who is then duped of his money without fulfillment of the contract.

The areas of electronic contracts catered for by the law, focus more on the form rather than

substance of electronic contracts. Perhaps this is because it seeks to uphold the integrity of

freedom to and independence of contract and would rather that electronic contracts be governed

majorly by case laws, as with traditional manual contracts, to ensure flexibility. However due to

the prevalence of cyber insecurity, online theft and unfair contract terms, electronic contracts

need to be specifically regulated by laws in order to ensure compliance with contractual terms by

the parties and reduce online fraud.

These are the problems which this project seeks to explore and provide practical

recommendations to in its subsequent pages.

1.3. RESEARCH QUESTIONS

1. What is electronic contracts and at what point can it be said to be formed?

2. What are the laws regulating electronic contracts in Nigeria?

3. What are the problems with enforceability of electronic contracts in Nigeria?

4. What are the laws that govern electronic contracts in other jurisdictions outside Nigeria?

5. How can Nigeria improve the effectiveness and enforceability of electronic contracts in

the country?

1.4. RESEARCH OBJECTIVES

● To understand indepthly what electronic contracts entail;

4
 ● to examine the laws regulating electronic contracts in Nigeria;

● to examine the problems of enforceability of contracts in Nigeria;

● to conduct a comparative analysis of laws outside in other jurisdictions outside Nigeria;

● to recommend ways in which Nigeria can improve the effectiveness and enforceability of

electronic contracts.

1.5. SCOPE OF STUDY

This project will explore the concept of electronic contracts and its enforceability in Nigeria. It

will examine the dynamics of contractual relationships between: applications or softwares and

consumers, the common man carrying on business on the internet, companies using electronic

means. This will be embedded in the body of the work and examined across various

subheadings.

Also, particular focus will be given to types of electronic signatures, types of electronic contracts

and electronic contracts and deeds. The types of electronic signatures that will be explored are

watermarks, standard electronic signatures, ‘I agree’ electronic signatures and digital signatures,

which is further divided into advanced electronic signatures and qualified electronic signatures.

In addition the types of electronic contracts that will be explored are click-wraps, browse-wraps,

scroll-wraps, shrink-wraps and electronic contracts between personalities.

It will also analyse critically the available laws in Nigeria that are concerned with electronic

contracts and highlight areas that need to be amended or added. Reference will also be made to

international laws on electronic contracts and also on municipal laws which govern electronic

5
contracts in certain countries. Inference will be drawn from notable developments that have

aided or sought to aid electronic contracts through these laws in those countries and

recommendations will be made to help improve the practice of electronic contracts in Nigeria.

1.6. RESEARCH METHODOLOGY

The doctrinal research approach will be employed during the research process, as the focus of the

paper will be an analysis of laws, case laws and legal concepts associated with electronic

contracts in Nigeria. It will also include a comparative analysis of case laws and legal

frameworks in other jurisdictions.

Secondary sources such as articles, journals and academic essays on the topic will also be

alluded to in the course of this research.

1.7. PROPOSED CHAPTERISATION

CHAPTER ONE: This will contain the background for the research and well detailed

information on the purpose of the research. This will be the introduction of the project.

CHAPTER TWO: This will explore detailed literary reviews on articles, journals and essays

that have probed into the concept of electronics within Nigeria and in other countries.

CHAPTER THREE: This will delve into the laws and case laws that govern the enforceability

of electronic contracts in Nigeria. It will also explore the various problems associated with

enforceability of electronic contracts in Nigeria.

6
CHAPTER FOUR: Comparative analysis will be done in this chapter. Reference will be made

to other jurisdictions such as the United Kingdom, United States of America and South Africa, in

relation to the laws which govern electronic contracts in these countries and how these laws habe

contributed greatly to the enforceability of electronic contracts in these countries.

CHAPTER FIVE: This will contain the recommendation which can be implemented to enhance

electronic contracts enforceability in Nigeria. It will also include the conclusion.

7
 CHAPTER TWO

LITERATURE REVIEW

It is important to review vital literature such as journals, articles, essays, etc on electronic

contracts in order to examine various views and contributions to the concept of electronic

contracts. This chapter explores literature from the Nigerian perspective and other jurisdictions

for the purpose of comparative analysis.

2.1. NIGERIAN LITERATURE:

1. Formation of electronic contracts: Melding the traditional contract law with

contemporary electronic commerce citation information by Dr. Ihuoma Ilobinso3-

Dr. Ilobinso explored particularly, in this essay, the issues surrounding formation of

electronic contracts. She narrowed her research focus to: a) Electronic Mail Systems and

Website Tracking platforms (Click wraps). In the former, she examined the point at which

an acceptance can be said to have been duly communicated and highlighted similarities

shared between emails and postal mails but noted the key distinction between the two

which is speed of responsiveness. Thus, she posited that the rule of Adams v Lindsell4,

which provides that acceptance can be said to be effective from the moment a letter to

that effect is posted, does not apply to emails.

Also, on website tracking, she noted the issue of whether the placing of goods for

purchase on a website can be likened to the placing of goods in a store, thus amounting to
3
Ihuoma Ilobinso, Formation of Electronic Contracts: Melding the Traditional Contract Law with Contemporary
Electronic Commerce, 2 Commercial and Industrial Law Review (2016) 50-63.
4
[1818] EWHC KB J59; (1818) 1 B & Ald 681; 106 ER 250

8
 an invitation to treat or if it is an offer in itself. In order to determine what obtained, Dr.

Ilobinso explained that this can be known by whether the website is a bilateral contract or

a unilateral contract. A bilateral contract will mean that the display of the goods is in fact

an invitation to treat and the seller is not bound once the purchaser responds but a

unilateral contract means that the display of the goods online is an offer which is binding

on the seller once accepted by the purchaser. She further noted that in order for either

form to apply, it must be clearly stated in the terms and conditions of the website as such.

Finally, the issue of authentication of electronic contracts was examined by her. She

noted that electronic contracts are not required to be in writing and may be difficult to

prove due to such occurrence. However she noted that electronic signatures which

include names and initials of the parties as provided in UNCITRAL Model for Electronic

Signatures5, can be utilised to the advantage of the purchaser once they can provide

evidence of the correspondence between themselves and the seller which indicates their

names. For instance, an online chat can be tendered effectively as the names of the

accounts will be considered electronic signatures.

The area of electronic contracts examined by Dr. Ilobinso was well argued. She aptly

highlighted key differences between traditional manual contracts and electronic contracts

and properly argued these differences. Moreso, the extension of electronic signatures,

beyond the scope of formal contracts, to cover any evidence displaying the names of the

5
Article 2 (a) of the UNCITRAL Model Law on Electronic Signature defines electronic signature as ‘…data in
electronic form in, affixed to or logically associated with, a data message, which may be used to identify the
signatory in relation to the data message, and to indicate the signatories approval of the information contained in the
data message’.

9
 party in accordance with the UNCITRAL Model Law on Electronic Signatures settles a

major issue of enforceability of electronic contracts, which is proof of authenticity.

2. A critical analysis of the validity and enforceability of electronic contracts in

Nigeria: Need for reforms by Anugbum O and others6-

This article highlighted the issue of location and time in relation to offer and acceptance

associated with electronic contracts. It noted that the applicable legal jurisdiction is often

where the acceptance takes place but with the advent of electronic contracts the scope has

been widened and the jurisdiction may actually be the law of another country.

Furthermore, it explored the intricacies involved in electronic contracts correspondences

and noted that other than the traditional requirements which apply to physical contracts,

there are certain issues peculiar to electronic contracts such as the issue of jurisdiction

stated above, which the law needs to make special provision for. It also noted that there

are 3 types of online contracts involving softwares and applications which are:

● Clickwrap contracts: These are online contracts which ensure the consumer scroll

through all the terms and conditions before they can click on ‘I agree’

● Browse-wrap contracts: This is where a user is simply notified that by continuing

to use the software they will be bound by certain terms and conditions, but

without the user having to take a positive action to accept them.

● Shrink-wrap contracts: This is where a user purchases a physical software product

and the terms are either included with the packaging or in a file that must be

opened during installation.

6
O. Anugbum, A. James and T.O Peter, A critical analysis of the validity and enforceability of electronic contracts
in Nigeria: Need for reforms, Global Journal of Politics and Law Research(2020) 8 (5) 13-30

10
 The article noted that the enforceability of such contracts is not easily discernible as the

issue of what point acceptance can be said to be made has not been effectively addressed

by courts. It however supported the view in Groff v. America Online7, where the Rhode

Island Superior Court held that the general rule was that a party who signs an instrument

manifests his assent to it and cannot later complain that he did not read the instrument or

that he did not understand its contents. The article stated that this was applicable to

electronic contracts in that the customer becomes bound once they click on ‘I agree’ or’

accept’, irrespective of the fact that they first downloaded the software before they could

access the terms and conditions. This writer does not agree with the article that a term

made available to the user after download of a software should be binding. This writer

submits that the terms should be made available and accessible to the user before they

can download the software. Lastly, the article also recommended the enactment of

specific laws to cater to electronic contracts, setting up of special courts, establishing

bi-lateral contracts between countries due to the issue of jurisdiction which may arise,

amongst others.

The view addressed by this article seems very limited as it centered its attention solely on

technicalities rather than what is practically obtainable. Its suggestions are however

sound and if applied are bound to greatly improve enforceability of electronic contracts in

Nigeria.

7
No. PC 97-0331, 1998 WL 307001 (R.I. Super. Ct. May 27, 1998)

11
 3. The legal framework for the regulation of electronic contracts in Nigeria by

Oluwatuyi Oluwasikemi8 -

Oluwatuyi examined very briefly the concept of electronic contracts and signatures. He

analysed both concepts before delving into the available laws in Nigeria that regulate

them. Reference was made to the issue of Cyber crimes, identifying the Cyber Crimes

(Prohibition, Prevention, Etc.,) Act, 2015 as being an adequate provision that regulates

cyberspace by providing a penalty for certain cyber crimes. He highlighted the

challenges of electronic contracts in Nigeria to be the issue of jurisdiction (for instance,

where the contract is between persons in different countries, the contract law that will

regulate the transaction may pose a problem) and insufficient laws providing for

consumer protection and data protection and privacy. He concluded by recommending the

passing of the bills aimed at regulating electronic commerce into law, the need for

establishing an agency like NITDA to specifically regulate electronic contracts and

improving international relations between Nigeria and other countries.

This paper very adequately identified the problems fraught with electronic contracts and

did a proper analysis of the available laws, however it focused more on the problem and

offered very little on how these problems can be resolved. Hence though the paper made

a useful contribution to the concept of electronic contracts, its contribution was minimal.

8
Oluwatuyi Oluwasikemi, The legal framework for the regulation of electronic contracts in Nigeria

12
 4. Online contracts in Nigeria - an overview by Edwin O. Ezike9 -

Edwin focused mainly on contracts entered into through the use of the internet. He drew a

distinction between online contracts and electronic contracts by explaining that the

former were also electronic contracts but those specifically carried out through the

internet while the latter encompassed transactions carried out through the use of fax,

telephone,etc other than the use of the internet. He also examined the point at which offer

and acceptance can be said to have been achieved in an online transaction. Unlike Dr.

Ilobinso, he stated clearly that online stores wore the same garment as physical stores, i.e

the display of items for sale online was an invitation to treat. He addressed the nature of

a contract, i.e whether unilateral or bilateral from the viewpoint of contractual liberty

(terms of a unilateral contract can not be varied by the buyer while that of a bilateral

contract can be varied) and not the effect of boundedness of placing an order online. This

writer submits that both Dr. Ilobinso and Edwin are right in their respective views. Dr.

Ilobinso approached display of goods in a more liberal manner, stating that the

determination of whether the goods displayed amounts to an offer or an invitation to treat

depends on the terms inherent in the electronic contract stating it to be either a unilateral

or bilateral contract unlike Edwin whose point of view can be said to be the general rule

to the concept. Edwin’s adaptation of the effect of a unilateral and bilateral contract is

also very apt. He also concluded in his analysis of electronic contracts via electronic mail,

that acceptance occurs upon actual receipt by the seller and not in accordance with the

postal rule

9
Edwin O. Ezike, Online contracts in Nigeria - an overview (2013) 11 Nig. J. R.

13
 Edwin noted the challenges that face online contracts as- the issue of contracts required to

be in writing, lack of uniform international legal framework and infrastructural

challenges such as lack of electricity and poor internet connection. A peculiarity of this

article is that it explored mistakes made in online contracts. He posited that identifying

whether the problem is due to programming errors, physical issues like poor network

connection or human errors is key to determining the remedy available to either party. In

addition to this, he recognised the issue of imposters and the difficulty in identifying the

true identity of the parties entering into contractual relationships.

It is evident that the focus of this article is more on the technicalities which may arise in

an online contract more than on the law that governs this sphere. Its contributions to this

topic is very relevant as by addressing these technicalities it brings to a sharp focus to the

peculiarities of electronic contracts and highlights areas which will be necessary for the

law to regulate inorder to ensure a seamless operation of online transactions.

2.2. LITERATURE FROM OTHER JURISDICTIONS:

5. Online contracts- Can we rely on our standard terms by Rebecca Gardner?10-

This author examined the issue of online contracts in relation to selling and buying done

via websites. She explored whether the terms on the website are binding on both parties

or whether they are mere guidelines. She stated clearly that the binding effect of terms in

an online contract will depend on whether the purchaser is allowed to read them before
10
Rebecca Gardner, Online contracts- Can we rely on our standard terms?
<https://www.howatavraamsolicitors.co.uk/online-contracts-can-we-rely-on-our-standard-terms/> accessed April
4,2024

14
 entering into the contract or after. In the case of the former, she posited that the terms will

be deemed binding as it will be presumed that the purchaser has read them, provided they

had access to read them and the process was structured in such a way that the purchaser

could not proceed with his purchase without agreeing to have read the terms by ticking

the ‘I agree’ box. However, she noted that if it is after, the terms will not be binding at all.

She referred to the Electronic Commerce (EC Directive) Regulations 200211, a UK law,

which sets out requirements for website transactions, thus:

● A website must make clear what are the technical steps necessary to conclude a

contract online, whether or not the concluded contract will be accessible (and if

so, how), and the manner in which errors in placing an order can be corrected.

● Contract terms must be made available in a way that allows the consumer to store

and reproduce them.

● Orders must be acknowledged without undue delay and by electronic means.

● The customer must be able to identify and correct input errors before placing the

order.

● The order and the acknowledgment of receipt will be deemed to be received when

the parties to whom they are addressed are able to access them12.

This writer opines that this essay makes a useful contribution to the concept of electronic

contracts in the UK. Its analysis of the binding effect of terms in an online contract is

very important in determining the enforceability of electronic contracts, as the absence of

physical human interaction can often pose a difficulty in determining the point at which

11
Electronic Commerce (EC Directive) Regulations 2002, (00/31/EC)
12
ibid

15
 the terms stated can be said to be binding. Also, the UK regulation referenced in the

essay, further presents a waterproof scheme to ensure the safety of the purchaser from

being bound to a contract whose terms are unknown or can not be edited by the

purchaser.

6. What Is an Electronic Contract by IronClad Journals?13

This online journal explored the enforceability of electronic contracts in the United States

of America (USA). It made reference to two key laws that govern electronic contracts in

the USA which are the Electronic Signatures in Global and National Commerce Act14 and

the Uniform Electronic Transactions Act15. It then delved into the various ways signatures

can be procured online. It posited that signatures may be generated online by signing on a

physical paper, scanning it and sending via email, signing on digital notepads which

reflect on the screen, purely electronic signatures which require inviting a username and

password, clickwrap signatures which are determined merely by clicking ‘I agree' or by

using embedded signatures. This is very pivotal to the topic of electronic contracts as it

sheds more light into the concept of electronic signatures which are necessary for

determining the validity and enforceability of electronic contracts. It is clear from this

explanation that electronic signatures are more for the purpose of identity than formality.

The article also examined the advantages of electronic contracts to be ease of use, low

transaction cost and time saving. Unlike most articles, this article shed a positive light on

13
Iron Clad, What Is an Electronic Contract
<https://ironcladapp.com/journal/contracts/what-is-an-electronic-contract/> , accessed April 18,2024.
14
The Electronic Signatures in Global and National Commerce Act, L. 106–229, §1, June 30, 2000, 114 Stat. 464
15
The Uniform Electronic Transactions Act, 815 ILCS 333.

16
the concept of electronic signatures. It brought a fresh perspective to electronic contracts

which are here to stay. Perhaps this view can be attributed to the fact that the USA has

made sufficient provision for electronic contracts in its laws. Thus instead of focusing on

the apparent failures of electronic contracts, it is important to also note its advantages and

look for means to make it even better and more secure as even the traditional means of

contracting is also fraught with its own problems.

17
 CHAPTER THREE

AN OVERVIEW OF ELECTRONIC CONTRACTS AND APPLICABLE LAWS IN

NIGERIA.

3.1. Definition of Electronic Contracts

It is important in defining ‘electronic contracts’ to first individually define each word before they

are defined as a unit. The first is ‘electronic’ and the second is ‘contracts’. According to the

Merriam-Webster dictionary, the word electronic ‘relates to, or is a medium…by which

information is transmitted electronically’16. Also according to the Black Law Dictionary,

electronic means, ‘something employing low-voltage current and solid state integrated circuits or

components. Typically a device or technology for the transmission and/or processing of analog

or digital data’17. Both definitions imply that the word electronic depicts a means through which

things are done or executed, such as a train using rails instead of moving on a bare road. Now

what are contracts? According to Professor Sagay, contracts ‘are agreements which the law will

enforce or recognise as affecting the legal rights and duties of the parties’18. Thus electronic

contracts are agreements entered into through electronic means which are capable of affecting

the legal rights of the parties involved and which are enforceable by law. It is therefore obvious

that a major difference between traditional contracts and electronic contracts is the means

through which it is executed- the former is done manually while the latter is done electronically.

3.2. Elements of an Electronic Contract

Having considered that the difference between electronic contracts and traditional contracts is

more in form than in substance, the same elements which must exist for a traditional contract to
16
Merriam Webster Dictionary, 2024
17
Bryan A. Garner (ed), Black’s Law Dictionary, 11th Edition
18
ibid (n 1)

18
be considered binding apply to an electronic contract. This means for an electronic contract to be

binding, there must be an invitation to treat, offer, acceptance, consideration, intention to create

legal relations and capacity.

3.2.1. Invitation to Treat and Offer

Invitation to Treat is a mere indication of intention to enter into negotiation and is not binding on

either party19. An example of this is when a seller displays his wares intending to receive offers

from interested purchasers. At this point, he is simply inviting purchasers to indicate their

interest and may decide whose offer he is willing to accept. On the other hand, an offer is a

promise made by an offeror which becomes binding once it is accepted by the offeree either by

words, performance20 or conduct21. It is important to distinguish between an invitation to treat

and an offer as was rightly posited in BFI Group Corp. v. B.P.E22 where the Supreme Court

clearly stated that:

An offer must be distinguished from an invitation to treat. Invitation to treat is the first

step in negotiations between the parties to a contract. It may or may not lead to a definite

offer being made by one of the parties to the negotiation. An invitation to treat is not an

offer that can be accepted to lead to an agreement or contract.

Generally, the principle governing the display of goods and adverts is that it does not amount to

an offer but an invitation to treat and this also applies to goods displayed online, on platforms

19
Clashfern and Lord Mackay, Halsbury’s Laws of England, Vol. 9(1) (London: Butterworths, 1998), p.
463; Amana Suites Hotels Ltd v. PDP [2007] 6 NWLR (Pt 1031) 453
20
Nigerian National Supply Company v. Agricor Incorporations of USA [1994], 3 NWLR (Pt 322) 339; Carlisle v
Carbolic Smoke Ball Co. [1892] EWCA Civ 1, [1893] 1 QB 256 (CA)
21
Brogden v Metropolitan Railway(1877) 2 App Cas 666
22
[2012] 18 NWLR (Pt. 1332) 209.

19
like Konga, Jumia, AliExpress, etc23. However, this principle can not be strictly applied to

electronic contracts as both display of goods and actual sale may sometimes mingle. In relation

to this, Dr. Ilobinso rightly noted that it is important to examine whether the contract is unilateral

or bilateral24.

A unilateral contract is an offer made in return for performance or acceptance through

communication. The offeree is not obligated to perform the requested act but when he does, it

becomes binding on the offeror; neither does he need to communicate acceptance to the offeror

as most times acting upon the offer suffices. A unilateral contract leaves little or no room for

further negotiations and requires that the offeree accept either by performance or by

communication. This was reiterated in Carlisle v Carbolic Smoke Ball Co25. In this case, even

though it was an advertisement, the court considered the terms/wordings of the advert and

concluded that it was binding upon acceptance by anyone who chose to act upon the offer.

On the other hand, a bilateral contract involves a continued exchange of promises until an

agreement is reached which can amount to a binding contract. The promise given by the offeror

in this case is viewed as an invitation to treat and any response by the offeree will not be deemed

as acceptance binding on the offeror but as a promise to be considered by the offeror. In this form

of contract, a dynamic situation occurs in which the offeree is the person who institutes an offer

and the offeror accepts or declines. This type of contract is often preferred over the other as it

leaves room for flexibility in negotiations. In Fisher v Bell 26, the court stated that the display of

23
UN Convention on the Use of Electronic Communication in the International Contracts 2005, Art. 11:
Display of goods on the websites constitute an invitation to treat.
24
ibid (n 3)
25
[1892] EWCA Civ 1, [1893] 1 QB 256 (CA)
26
[1961] 1 QB 394, [1960] 3 All ER 731

20
goods at the storefront constituted an invitation to treat and not an offer, thus creating a bilateral

contract which only becomes binding when both parties reach a consensus.

In applying these to the issue of whether the display of goods on a website for sale amounts to an

offer or an invitation to treat, it is imperative that the online seller indicates whether it is his

intention to create a unilateral or bilateral contract, i.e. the seller should clearly indicate whether

he intends that whatever response given by a purchaser be considered as an invitation to treat or

as an offer. An example of this can be seen on Jumia. Upon application by a customer to

purchase an item, the customer is informed that they will have to wait for approval of the

request. This is a clear indication of a bilateral contract and if the request is rejected and the

customer has already paid, the money is immediately refunded.

A very good example of a case on online display of goods is the Argos case of 1999 in which it

mistakenly displayed on its United Kingdom’s online store that it was selling a television for

£2.99 instead of £299. As a consequence of this mistake, it received hundreds of orders which it

ignored. This resulted in serious problems for the company which could have been easily

avoided if they had the appropriate terms stated on their site such as whether an indication for

purchase will be viewed as an offer as in a bilateral contract or an acceptance as in a unilateral

contract.27

27
Stuart Barry, ‘The Argos case: Caveat Vendor’ <https://swanturton.com/the-argos-case-caveat-vendor/>, accessed
1 May, 2024.

21
3.2.2. Acceptance

This is when the promise or offer made is accepted by the offeree. An acceptance must be clear

and unequivocal and must not be in the form of further negotiations28. An acceptance must also

be communicated and received by the offeror29. An exception to this rule is the postal rule. The

rule was laid down in Adams v Lindsell30 . It states that acceptance becomes valid once it has

been posted and not when it has been received by the offeror31. The rationale behind this is that

matters have gone out of the hands of the offeree the moment he has posted his acceptance and a

third party, over whom he has no control, is now in charge of the letter.

In regards to electronic contracts, attempts have been made to apply the postal rule to acceptance

by electronic mail (hereinafter called email). The rationale of their argument is that like postal

mail, email too involves a third party which is the Internet Service Provider (ISP) and where

there are network issues, the mail may either be delayed or not delivered. However, this view is

very myopic as it fails to take into cognisance certain peculiarities. Firstly, an email is considered

an instantaneous mode of communication, i.e. responses can be sent back and forth quickly

unlike the postal system which may take days to be delivered and the rule as laid down in

Brinkibon Ltd v Stahag Stahl32 states that where instantaneous communication is used,

acceptance is not binding until it is received and not when it is sent. Secondly, when there is an

issue with the letter of acceptance sent via email such as network issues or sending to a wrong or

28
Hyde v Wrench [1840] 3 Beav 334
29
Entores v Miles Far East Corp [1955] 2 QB 327
30
ibid (n 4)
31
This postal rule applies even where there is delay or the letter is totally lost; Household Fire Insurance Co. v.
Grant (1879) 4 E&D 216; Holwell Securities v Hughes [1974] 1 WLR 155
32
[1983] 2 AC 34

22
non-existent email address, communication is made to the party sending the email. It will

therefore be unfair to hold such a response as binding on the offeror merely on the basis that it

was sent. The receipt rule therefore is what applies to emails.

3.2.3. Consideration

This is popularly defined as anything of value in the eyes of the law. This simply means anything

of value which is given or done by both parties in the fulfilment of the contract. In Best (Nigeria)

Ltd V Blackwood Hodge (Nigeria) Ltd & Ors33, the court noted that,

It is basic that to constitute a binding contract there must be an agreement in which the

parties are ad idem on essential terms and conditions thereof. The promise of each party

must be supported by consideration.

The same principle applicable to consideration given in traditional contracts, applies also to

electronic contracts.

3.2.4. Intention to Create Legal Relations

This simply connotes that both parties must intend and be willing to enter into the contract for it

to be binding. The consent of either party to the contract must not have been gotten through

mistake34, fraud35, duress36 or misrepresentation37. In Cundy v Lindsay38, the court held that there

was no mutual agreement between the parties as the goods were sent to the defendant by

33
(2011) 5 NWLR (Pt 1239) 95 at 107
34
Smith v. Zimbalist, 2 Cal.App.2d 324;Sherwood v. Walker, 66 Mich. 568
35
Furst v. Merritt, 190 N.C. 397
36
Barton v Armstrong [1976] AC 104; Skeate v Beale (1840) 11 Ad&El 983
37
Bisset v Wilkinson, [1927] AC 177; Peek v Gurney (1873) LR 6 HL 377
38
(1878) 3 App Cas 458 HL

23
mistake. There was thus no intention to enter into legal relations with the defendant but with

another and as a result there was no contract at all.

In electronic contracts it is also very important to deduce an intention between the two

contracting parts to be bound to each other. In regards to electronic contracts, an issue which may

invalidate the intention to create legal relations element is online impersonation and fraudulent

websites. Certain questions arise in relation to electronic contracts entered into through

impersonation- can a person whose identity is stolen and used to enter into a contract online be

bound by it? What happens to the other party who ignorantly enters into that contract? In

addressing the first question, it is trite law that it will be unfair to hold the person whose identity

was stolen to be legally bound to such a contract, particularly where it has been clearly proven

that the person's identity was stolen and used to enter into such an electronic contract. Thus what

the law as regards impersonation provides for is a penalty for the imposter as stated in Section 22

of the Cybercrimes Act (Prohibition, protection, etc) Act, 2015. On the second question, the

other party will be able to seek any of the remedies for fraud, particularly where the imposter has

been identified. The person whose identity was stolen can not be bound by the contract as they

had no intention of creating legal relations with the defrauded party.

Similarly, it is worthy of note that there are instances where only one human being can be

involved in the communication, while programmed computers or machines are at the other side.

Previously there was much disagreement that a valid electronic contract could be made between

a human and a programmed computer. However, law presently recognises that contracts can be

made with machines and it is of no legal consequence that a machine physically completed the

24
contract39. An example of this is a website in which there is an already programmed response to

every action taken by the user on the site. In Thornton v Shoe Lane Parking40, Lord Denning

addressed this issue. Mr. Thornton accepted a contract by driving into a car park. Just before he

drove in, he was issued a teller from an automated teller machine on which was written in small

prints that the paper was issued subject to the conditions displayed on the premises. The court

stated that the terms stated before he received the teller and drove into the car park were binding

but those stated after he had entered into the car park were of no effect as he had already

accepted the offer before the terms were presented. The court was of the view that there was a

binding contract on the basis that whatever program was inputted into the device was done by a

human being who can be legally bound.41

The view of the court in Thornton's case is not a fixed rule as the court in most cases adopts an

objective approach in analysing the facts of each case to determine whether a contract has been

made or not42. Also the burden of proving there was no intention to create legal relations in a

human-machine transaction is on the offeror43.

3.2.5. Capacity

This refers to an individual’s legal ability to enter into a contract. Generally, certain persons are

prohibited from entering into a contract and where they do, it is not binding on them, subject to

39
K.E Oraegbunam and 2, Problems of Electronic Contract in Nigeria Today, Law and Social Justice Review
(LASJURE) 1 (2020) p. 6
40
[1971] QB 163
41
In State Farm Mutual Auto. Ins. Co. v. Bockhurst 453 F. 2d 533 (10th Cir. 1972), the court determined that the
computer only functions in accordance with the knowledge and orders provided by its programmers, implying that
there is human intent to create legal relations in computer transactions.
42
Smith v Hughes (1871) LR 6 QB 597
43
Edwards v Skyways Ltd (1964)WLR 349 at 355.

25
certain exceptions. Such persons include minors, the mentally unstable and persons who are

intoxicated. This is also very important when creating an electronic contract. However it may not

always be easy to discern the capacity of the party with whom the contract is being entered into

because of the lack of physical human contact. For example, it is very easy to lie about one's age

online in order to gain access to a website or application. It is unclear whether in the event of a

breach the injured party will be able to bring an action against such a minor. However, it is

important that the law devices a means to ensure only capable persons enter into contracts online

in order to preserve the sanctity of contracts.

3.3. Forms of Electronic Contracts

There are 4 major forms of online or electronic contracts. These are

3.3.1. The Click-wrap Contract:

This is a type of online contract in which the user or customer is expected to indicate that they

have read the terms of the agreement and they agree to it by clicking on or ticking the ‘I accept’

button provided44. The user can not proceed without ticking the box or pressing the button. It is

implied by the express agreement of the customer that they have read the terms, even if they did

not, as is often the case. In Feldman v Google45, the court recognised the validity of click-wrap

agreements and enforced it. While this mode of contract may absorb the website of liabilities, it

traps the customer in an agreement they may not fully understand and that may be detrimental to

them. One of the factors that discourage a customer from reading the terms and policies is its

length and text size and many of these websites have terms that are at least three(3) pages long

and often written in really tiny text. This needs to be regulated as many companies have taken
44
Ironclad, Electronic contracts: What you need to know
<https://ironcladapp.com/journal/contracts/what-is-an-electronic-contract/> accessed 2 May 2024
45
513 F.Supp.2d 229 (E.D.Pa. 2007)

26
advantage of this system to hide in plain sight, policies that are unfair to the user. The need for

conspicuousness was noted in Specht v. Netscape46 in which the court ruled that for a click-wrap

text to be valid, it needs to be conspicuous and clear for the user.

3.3.2. The Browse-wrap Contract:

This is commonly found on softwares and applications. It may appear before or after the user

downloads the software or application. It provides a hyperlink to the terms which the user is

expected to read47. Assent is imputed on the user by their continued use of the software or

application. It is implied that the user by using the application or software indicates that they

have read the terms and they agree to it. This is worse than the click-wrap agreement and is often

rejected by the court as unenforceable because it doesn't require the user to carry out any overt

act of assent such as clicking on an ‘I agree’ button.

One of the first cases dealing with browse-wrap agreements was Pollstar v. Gigmania Ltd48.,

which was about the purchase of concert tickets online. In this case, the court ruled in favour of

the website as the defendant failed to carry out due diligence in examining the terms stated on

the website when copying their content. However, in Specht v Netscape49, the court did not

enforce a browse wrap agreement because it stated that the hyperlink to the terms was placed

inconspicuously on the website page and not in the clear view of the user for them to access the

terms before clicking on the link which indicates implied assent. A different decision was

reached by the court in Ticketmaster Corp. v. Tickets.com, Inc50. The court distinguished this

46
306 F.3d 17 (2d Cir. 2002)
47
ibid (n 44)
48
170 F.Supp.2d 974 (E.D. Cal. 2000)
49
ibid (n 46)
50
2003 WL 21406289, at *2 (C.D. Cal 2003).

27
case from the Specht case on the basis that the website in this case plainly displayed the

browse-wrap agreement, indicating that by continuing action the user gave implied consent.

Also, the court in Register.com v. Verio51, enforced a browse-wrap agreement because it was

shown that Verio was aware of the terms of agreement by their continued use and enjoyment of

the site. These cases seemed to indicate that courts had finally accepted browse-wrap

agreements. However in Hines v. Overstock52, the court held that the browse-wrap agreement

was not binding as it failed to indicate to the user that it was intended to be a binding agreement

and the link to the terms were inconspicuously placed on the page and not in clear view of the

user. In the same year as the Hines’ case, a browse wrap agreement was enforced in the case of

Major v McCallister53. In Hoffman v. Supplements Togo Management54, a more recent case, the

court held that a website’s browse-wrap agreement did not form a valid contract with a user

because the agreement was all the way at the bottom of the screen and not on the first page the

user views and the user would have to scroll down the webpage to view the agreement.

There is really no conflict in the decisions of the court as it is quite clear that the court will only

enforce a browse-wrap agreement when the owner can show that the user had actual or

constructive knowledge55 and the hyperlink to the terms is placed conspicuously on the site for

the user to see.

51
356 F.3d 393 (2d Cir. 2004)
52
669 F.Supp.2d 362, 368 (E.D.N.Y. 2009)
53
302 S.W.3d 227 (Mo. Ct. App. 2009)
54
LLC, 18 A.3d 210, 219 (N.J. 2011)
55
Thomas Reuters Practical Law, Browse-wrap Agreement
<https://uk.practicallaw.thomsonreuters.com/5-508-6048?transitionType=Default&contextData=(sc.Default)>
accessed 2 May 2024

28
3.3.3. The Scroll-wrap Contract:

This is also referred to as modified click-wrap agreement as its major distinguishing factor from

a click-wrap agreement is that the terms are embedded on the page to be viewed by the customer.

The customer does not have to click on a link to access the terms as they are displayed for their

perusal and the customer is expected to scroll through the terms before they can click on the ‘I

agree’ button56. This is much more effective. Also, the terms are more conspicuous, not bulky

and are easier for the customer to read.

3.3.4. The Shrink-wrap Contract:

This is very similar to the browse-wrap agreement. It is written on the wrap or packaging of

products. The use of the product or tearing of its packaging is considered as an agreement to the

terms by the customer. The court, as with the browse-wrap agreement, is often reluctant to

enforce this form of agreement as it is seemingly contrary to the rules of contracts which

provides that the terms are to be agreed to by the parties before an act of performance binding the

parties can be valid. The law on contract clearly states that both parties must be in consensus ad

idem (an agreement) and have agreed to all the terms in order for the terms of the contract to be

binding. Hence a term that is sprung on the purchaser after payment seems very inadequate to

bind the customer to. Surprisingly, the court was not reluctance to enforce this kind of contract in

ProCD, Inc. v. Zeidenberg57.

56
ibid (n 44)
57
908 F.Supp. 640 (W.D. Wis. 1996); in this case it was declared on the Shrink-wrap that the purchaser of the
CD-ROM database was not to use it for commercial purposes, but the terms were inside the packaging and not on
the outside. The defendant ignored the license and resold the information on the CD database. The court held that
the purchaser was compelled to abide by the terms stated in the Shrink-wrap.

29
A general problem with all these forms of contractual agreements is that the user is expected to

make an instant decision after supposedly reading through a long text of terms drafted by

lawyers of the website, application or software company/owner and without legal supervision on

their own part, make a binding decision themselves.

3.3.5. Electronic Contracts between Personalities

In most instances reference to electronic contracts fail to take into cognisance that occurring

between persons and the types of electronic contracts are usually restricted to the

aforementioned. However contracts which occur electronically are not always done via websites,

softwares or applications. It can be between two individuals, an individual and a company or

between companies by simply utilising electronic means of contracting. An example of this is an

electronic contract between two individuals, an individual and a company or between companies

by simply utilising electronic means of contracting. An example of this is an electronic contract

between two individuals initiated through social media, email58,etc.

3.4. Enforceability of electronic contracts in Nigeria

While it has been clarified that electronic contracts are a valid means of creating contractual

relations, it is important to examine how it can be enforced in the event that either of the parties

are in breach. Firstly, it must be established that there was in fact a contract between the parties

and to prove this, electronic signatures are often provided in the court as evidence. Also, certain

laws, regulations and bills exist which regulate and aim to regulate its enforceability.

58
See p.22

30
3.4.1. Electronic Signatures

It is necessary to examine the effect of electronic signatures when considering enforceability of

electronic contracts. In Nigeria, there is no fixed form of creating contracts. Contract may be

formed orally (by parole), by conduct or by writing. However, some contracts are mandated by

law to be written in order to be enforceable. For instance, section 4 of the Statute of Fraud 1677

mandates that contracts on transfer of land or interest in land must be in writing. It is mostly in

relation to these forms of contracts that signatures are required. Generally, signatures in

traditional written contracts are usually the initials of the parties, their actual names or a sign

peculiar to the person using it. Also they only appear in formal contracts (written contracts).

With electronic contracts, signatures are given a broader meaning and effect.

It is important to note that electronic contracts can be difficult to enforce due to the problem of

proving that one exists in the first place. This is where electronic signatures come into play.

Electronic signatures are defined in Article 2 (a) of the UNCITRAL Model Law on Electronic

Signature as

‘…data in electronic form in, affixed to or logically associated with, a data message,

which may be used to identify the signatory in relation to the data message, and to

indicate the signatories approval of the information contained in the data message’.

This gives a very broad meaning to what an electronic signature entails. It goes beyond a

definitive sign consciously appended by a user on an electronic document, to cover signs such as

user-names of social media accounts that can be used as a means of identity. Similarly, although

31
there is no definition of electronic contracts in Nigerian statute or case law, the Evidence Act

recognises the validity of electronic signatures59 and provides that,

‘...electronic signature may be proved in any manner, including by showing that a

procedure existed by which it is necessary for a person, in order to proceed further with a

transaction to have executed a symbol or security procedure for the purpose of verifying

that an electronic record is that of the person’60.

This allows for a broad categorisation of what can be tagged as electronic signature. Thus as Dr.

Ilobinso rightly noted an electronic signature, ‘could be created by simply typing one’s name and

initials, making any mark in the designated area through the use of encryption software or

through a connected fingerprint device etc’61 . Also the Nigerian court in Kubor v Dickson62 gave

judicial backing to this provision of the evidence act by admitting electronically generated

evidence.

Types of Electronic Signatures

1. Watermarks: These are signatures placed on intellectual properties such as images,

designs or documents to prevent it from being stolen or used without purchase or

permission.

2. Standard signatures: These are the electronic form of physical signatures. This can be

done by simply writing the party's name on the electronic document or signing on a

59
Evidence Act, 2011, s. 93(2)
60
ibid, s. 93(3)
61
ibid (n 3)
62
(2013) 4 NWLR (pt 1345) 534

32
 physical paper and sending it via scan to the other party63. When the latter is utilised, it is

referred to as ‘wet ink signature'.

3. ‘I agree' signatures: These are those signed simply by ticking or clicking on an ‘I agree’

button on a website.

4. Digital signatures: Oftentimes the term ‘digital signatures’ are used interchangeably

with electronic signatures. While a digital signature is indeed an electronic signature, not

all electronic signatures are digital signatures64. A digital signature is something more

technical. It is a more secure form of electronic signature that involves encryption of data

such as use of passwords or keys known only to the user. This safeguards against

impersonation and ensures the integrity of the transaction between the parties.

Notwithstanding this difference, it is also admissible as evidence of electronic signatures

in Nigeria as the Evidence Act recognises the use of encryption software. Digital

signatures are further divided into three (3), which are

● Advanced electronic signatures: These are digital means of validating documents,

contracts and transactions and aim to ensure uniqueness to the person it belongs to

and also security for them65. An example is a username and password, One Time

Password (OTP) code, etc

● Qualified electronic signatures: This is unique to the European Union. It is an

e-signature that requires a qualified certificate that is very reliable in identifying

the signer and protecting the documents against tampering or forgery in such a

63
Fujifilm Business Innovation, Digital Signing: 5 Types of Electronic Signatures and When to Use Them
<https://www.fujifilm.com/fbhk/en/insights/article/digital-signing-5-types-of-signatures-and-when-to-use-them>
accessed by 27 May, 2024
64
ibid (n 8)
65
Closd, Advanced electronic signature: how it works and use cases,
<https://www.closd.com/en/blog/advanced-electronic-signature/> accessed 27 May, 2024

33
 secure way that it accorded the same legal enforceability as a handwritten

signature.66

3.4.2. Electronic Contracts and Deeds

Contracts by deed are contracts of formal legal evidence that are signed, sealed and delivered to

create a legal obligation67. An example of this is a contract of deed for land transactions, wills,

marriage certificates,etc . In Nigeria, section 17(2) of the Cybercrimes Acts 2015, limits the use

of electronic signatures for documents of wills, family law related matters like marriage, birth

and death certificates, issuance of court orders, notices and official court documents etc. This

impliedly limits the scope of electronic contracts.

However in certain countries like the United Kingdom, electronic contracts suffice as deeds,

since electronic signatures sufficiently fulfill the requirements of physical signatures required in

deeds68. The only deeds which may not be fully covered by electronic signatures are those to be

registered at the land registry. In which case a wet or standard signature will be required69.

Thus while electronic contracts suffice as contracts of deeds in most countries like the United

Kingdom, in Nigeria it does not suffice as a deed. This is because an important requirement of

66
Signicat blog, The Qualified e-Signature (QES): what is it and what is it used for
<https://www.signicat.com/blog/qualified-electronic-signature> 27 May, 2024
67
All Answers ltd, 'Contract by Deed and Simple Contract' (Lawteacher.net, May 2024)
<https://www.lawteacher.net/free-law-essays/contract-law/contract-by-deed-and-simple-contract-contract-law-essay.
php?vref=1> accessed 27 May 2024
68
Simply-Docs, Executing Documents Electronically
<https://simply-docs.co.uk/Managing-Commercial-Leases/Electronic-Signature-of-Deeds-and-Contracts> accessed
27 May, 2024.
69
ibid

34
deeds is a signature and electronic signature have been stated in law not to fulfil this

requirement.

3.4.3. Laws that enable enforceability of Electronic Contracts in Nigeria and their

shortcomings

While there is no specific law which makes express provision for electronic contracts and its

enforceability, there exists laws and regulations which govern certain areas of electronic

contracts and which to a reasonable extent ensure its enforceability. They are:

1. Evidence Act, 2011:

It is common knowledge that in order to enforce an action or agreement, one must be able

to prove successfully the liability of the other party. It is therefore imperative that a party

to an electronic contract is able to adduce evidence which shows that they indeed entered

into an electronic contract with the other party. Section 84 of the Evidence Act, 2011

provides for electronically generated evidence or computer based evidence. It enables the

admissibility of documentary evidence derived from a computer.70

However, the Evidence Act seems to limit the scope of electronic documentary evidence

that may be admitted by the continued use of the word computer. Thankfully, a broad

definition of documents has been provided in Section 25871 which accommodates

electronic documents generated through the use of other devices.

70
Section 84(1) & (2) of the Evidence Act, 2011
71
Section 258 of the Evidence Act, 2011

35
 Also, the court has on several occasions declared electronic evidence generated through

other devices as admissible. In Adeleke v Oyetola72 the Supreme Court noted that

electronic evidence, such as scanned documents and video recordings, was admissible.

Also, the Court of Appeal in Nwoye v FRN73 and Dabiri v Attorney General of the

Federation74 held that emails and text messages; computer generated evidence and tape

recordings, were admissible as electronically generated evidence. The courts stated that

they were admissible provided that they satisfied the requirements of authenticity,

reliability, and admissibility under the Nigerian Evidence Act75.

Lastly, Section 93(2) of the Evidence Act also recognises the validity of electronic

signatures. As earlier discussed, electronic signatures are very important in proving

electronic contracts as they constitute valid evidence76.

Under the umbrella of the Evidence Act, parties to an electronic contract can provide

electronic documents as evidence to prove the existence of the contract where it is being

denied by either party or in the case of breach of terms, evidence can also be supplied to

show the terms of the contract that is in breach. However, as with regular evidence,

electronically generated evidence can also be challenged and cross-examined by the

72
(2019) LPELR-46987(SC)
73
2019 LPELR 47095 CA
74
(2018) LPELR-44115(CA)
75
UniUyolawclinic, The critical analysis of the admissibility of electronic evidence in Nigerian court,
<https://uniuyolawclinic.wordpress.com/2023/05/18/the-critical-analysis-of-the-admissibility-of-electronic-evidence
-in-nigerian-court/#_ftn9> accessed 11 May, 2024.
76
See p.32

36
 opposing or accused party. Also whether it is admissible or not is still subject to the

discretion of court based on the facts and circumstances of the case77.

Shortcomings

In order for computer-generated or electronic evidence to be admissible in court, the

party adducing evidence must give the best evidence of facts that are in issue before the

courts. In relation to electronic contracts, information fed into the computer and posted,

for instance, on the websites of sellers and suppliers of goods and services, when

retrieved from the web, would only be copies of such information and would be

considered hearsay evidence78. Despite the willingness of the court to apply sections

33(b), 38, 39 and 9179 as exceptions to hearsay evidence in the context of electronic

evidence, these sections have been found to be grossly inadequate80.

2. Cybercrimes (Prohibition and Prevention) Act 201581:

Despite the fact that the economic space is fast becoming electronical with most contracts

being done through electronic means, many people shy away from electronic contracts

because of cybercrimes such as internet fraud, impersonation, ‘ponzi’ schemes, online

ghost vendors, etc. The enactment of the Cybercrimes Act was to actively combat

cybercrimes. The Act prohibits key cyber issues like computer related forgery82,

77
ibid (n 75)
78
ibid (n 6)
79
Yesufu v ACB [1976] 4 SC 1, 16, Anyeabosi v RT Briscoe [1987] 3 NWLR 8
80
ibid (n 6)
81
Hereinafter called Cybercrimes Act 2015
82
Section 13, ibid

37
 computer related fraud83, cyber terrorism84, impersonation85, etc. Ogham noted that the

aim of the Cybercrimes Act is to make the cyberspace a safe place for electronic

communications, data, computer programs, intellectual property and privacy86. It

therefore provides penalties for each offence.

The importance of the Cybercrimes act to electronic contracts can not be overstated as it

addressed major issues in internet fraud such as unlawful access to computer87 in order to

obtain vital information of persons for the purpose of defrauding them. This attracts with

it a jail term or a fine running into millions of naira. This provides sufficient punishment

for hackers who gain illegal access into electronic databases in order to syphon people’s

money or vital personal information. Also, section 14 of the Cybercrimes Act provides

for acts of computer related fraud and covers acts such as willful misrepresentation of

facts when sending electronic messages with an intent to defraud. This relates to such

acts of online vendors who create fake online businesses and willfully misrepresent that

they sell those products when in reality they do not and upon receiving payments, they

become unreachable by the customer. These are called ghost vendors. With the

enforcement of this section, they can be sufficiently penalised by imprisonment or fine.

Identity theft and impersonation is also frowned upon by the Cybercrimes Act which

penalises in section 22(2) the act of any person who impersonates another by making use

of the ‘... electronic signature, password, or any other unique identification feature of the

83
Section 14, ibid
84
Section 18, ibid
85
Section 22, ibid
86
S.C. Ogham, ‘Cyber Security Laws in Nigeria in the Era of Internet Scams’ (22 June 2022)
<https://sabilaw.org/cyber-security-laws-in-nigeria-in-the-era-of-internet-scams/#> accessed 11 May, 2024
87
D. Ikonne, G.O Okorie, Scrutiny of Legal and Regulatory Framework of E-commerce in Nigeria.

38
 other person’. This ensures security of electronic signatures and protects the sanctity of

electronic contracts.

Nigerian courts have in several cases implemented the provisions of the Cybercrimes

Act, 2015. In FRN v Wilfred Fajemisin, an unreported case, the accused was convicted

for impersonating himself with the intent to defraud unsuspecting foreign nationals under

false pretence. He was sentenced to 2 years imprisonment with an option of a fine of

N500,00088. Also, in the Federal High Court of Ilorin, six people were convicted for

cybercrimes pursuant to the act89. This shows the importance of this act to regulating

electronic transactions including electronic contracts.

Shortcomings

The provisions of the Cybercrimes Act are very broad and not very specific. Its words are

couched in such a way that crimes not intended to be catered for can be placed under any

section wide enough to contain. While this may be an advantage to a claimant, it

unfortunately also gives an offender too much wiggle room to escape as much as it gives

the offended a wide umbrella under which it may seek the protection of the law. Also, the

court is known to be narrow in application of laws in order to prevent punishing an

innocent party. For instance, section 14 of the Cybercrimes Act provides for

computer-based fraud and while it might cover most internet frauds, it would have greater

effect if it made specific reference to certain offences such as ‘ponzi’ schemes and

88
TransparencIT, Cybercrime/Fraud <https://v1.corruptioncases.ng/cases/frn-vs-wilfred-fajemisin> accessed 11
May, 2024.
89
Demola Akinyem, Six convicted for cybercrime in Ilorin, Vanguard (Ilorin, 14 March, 2022)
<https://www.vanguardngr.com/2022/03/six-convicted-for-cybercrime-in-ilorin/> accessed 11 May, 2024.

39
 vendors who misrepresent themselves on social media as having goods which they do

not. Finally, it also fails to make any specific reference to electronic commerce or

electronic contracts in respect of fraud.

3. Companies and Allied Matters Act, 202090:

The CAMA 2020 was enacted at a time when physical contact for formation of business

contracts was impossible or greatly limited due to the lockdown that occurred in that year

as a result of COVID-19. It thus made provision for things like electronic transfer of

shares91, virtual meetings92 and electronic filing of documents with the Corporate Affairs

Commission (CAC)93 . Its recognition of electronic input focuses majorly on the internal

management of a company.

Shortcomings

Although the CAMA 2020 makes provision for virtual presence for companies by

enabling virtual meetings, it fails to make any provision to regulate companies that are

majorly online. Information such as domain name and social media username

registration, online business rules, and the terms and conditions agreement that would be

displayed on the firm website are not covered by CAMA 202094. It also fails to make

provision for B2B95 online contracts. Lastly, the provisions of the CAMA 2020 fail to

take into cognisance transactions which a company may enter into online.

90
Hereinafter called CAMA 2020
91
section 176(1) of Company Allied Matters Act, 2020
92
section 240(2), ibid
93
section 860(1), ibid
94
ibid (n 6)
95
B2B (business-to-business) is a type of commerce involving the exchange of products, services or information
between businesses, rather than from a business to consumer (B2C).

40
 4. Nigeria Data Protection Act, 202396:

The NDPA established the Nigerian Data Protection Commission (NDPC)97. The agency

is responsible for making regulations to control the disclosure of and protect personal

data. The NDPA replaced the Nigerian Data Protection Regulation (NDPR) 2019. It shifts

focus from the residence and domicile of the data subject, as found under the NDPR, to

the processing activity through which the data is gotten and the controller/processor who

gets such data98. The NDPA applies where:

● the data controller or data processor is domiciled or resident or operating in

Nigeria;

● the processing of personal data occurs within Nigeria; or

● where the data controller or data processor is not domiciled or resident or

operating in Nigeria but is processing personal data of a data subject that is in

Nigeria.99

The NDPA also allows for cross-border data transfer on the basis that the entity to whom

the data is being transferred to are subject to a law, binding corporate rules, contractual

clauses, codes of conduct, or certification mechanisms that afford an adequate level of

protection with the NDPA100.

96
Hereinafter called the NDPA
97
section 4 of the Nigerian Data Protection Act, 2023
98
T. Osazuwa & 3 ors, Highlights of the Data Protection Act, 2023 | Nigeria,
<https://www.aelex.com/highlights-of-the-data-protection-act-2023-nigeria/#:~:text=The%20Nigeria%20Data%20P
rotection%20Act,data%20protection%20in%20Nigeria1> accessed 11 May, 2024.
99
ibid
100
section 41, ibid (n 96)

41
 A data controller or processor may only transfer data where;

● the data subject consents to the transfer and does not revoke such consent after

being informed of the associated risks inherent in the transfer in the absence of

adequacy of protection;

● transfer is necessary for the performance of a contract to which the data subject is

a party in order to take steps at the request of the data subject, prior to entering

into a contract;

● the transfer is to protect the vital interest of the data subject or another person;

● transfer is necessary for important reasons of public interest;

● transfer is necessary for the establishment, exercise, or defence of legal claims101.

Evidently, the NDPA by implication protects the data of parties to a contract, including

electronic contracts. Parties to a contract, particularly those entered into with applications

or softwares can be rest assured that their data is safe. However, most of these kinds of

contracts usually contain a waiver clause which allows certain data of users or customers

to be transferred.

Lord Hoffman in R v Brown102 surmised the importance of data protection thus:

Vast amounts of information about everyone are stored on computers, capable of

instant transformation anywhere in the world and accessible at the touch of a

keyboard. The right to keep oneself to oneself, to tell other people that certain

things are none of their business is under technological threat. In view of the

openness and accessibility of the internet the protection of such data has been a

101
Section 25, ibid (n 96)
102
(1996)1 ALL ER 545,546

42
 constant source of concern for internet users and consequently has remained a

threat to e-commerce.

Also, Nigerian courts take data protection in contracts seriously. In Emerging Market

Telecommunication Services v. Barr Godfrey Nya Eneye103, the claimant, a legal

practitioner, sued the operators of Etisalat mobile line for exposing his phone number to

persons or companies that sent him unsolicited text messages in violation of section 37 of

the Nigerian constitution. He was awarded damages by the Federal High Court, and on

appeal, the Court of Appeal upheld this decision.

NDPA provisions are essential in ensuring that people feel safe in divulging their

personal information online. It helps safeguard against impersonation or identity theft or

the use of a person's information to defraud such a person.

Shortcomings

It does not make special provision for data disclosure on social media and websites.

However, restrictions can be drawn from its general provisions. While its provisions are

wide enough to cover data controllers outside Nigeria, it does not provide any possible

way for enforcing these laws against them.

103
(2018) LPELR-46193

43
3.5. The Electronic Transactions Bills 2017

The bill was proposed with the view of specifically regulating electronic commercial transactions

and contracts. The bill seeks to ensure validity of electronic transactions and protection of

personal data in relation to the right to privacy as provided in Section 37 of the Constitution of

the Federal Republic of Nigeria ( CFRN) 1999104. The bill also seeks to establish the validity of

electronic evidence in line with section 84 of the Evidence Act which provides for the

admissibility of electronic evidence105. The bill provides that transactions that require writing,

signature and other prescribed forms are deemed to be complied with when done electronically.

However the Bill, as noted by Anthonia, will not apply where writing or signature is required in

certain transactions. These instances include:

● creation or execution of a Will;

● the execution of negotiable instruments;

● creation, performance or enforcement of an indenture, declaration of trust or power of

attorney with the exception of constructive and resulting trusts;

● any contract for the sale or disposition of immovable property, or any interest in such

property;

● conveyance of immovable property or the transfer of any interest in immovable property;

● the document of title for movable or immovable property; and

● where such application would involve a construction of a rule of law that is clearly

inconsistent with the manifest intent of the lawmaking body or repugnant to the context

104
It provides that the privacy of citizens, their homes, correspondence, telephone conversations and telegraphic
communications is hereby guaranteed and protected
105
Anthonia Igba, An overview of electronic transactions bill 2017 <https://ssrn.com/abstract=3275075> accessed
by 13 May, 2024

44
 of the same rule of law; however the mere requirement that the information be in writing,

written or printed shall not be sufficient to constitute such intent.106

This means that written electronic documents of electronic contracts for these purposes will not

satisfy the writing requirements of these transactions under the act.

The Bill recognises contracts formed by the interaction of electronic agents, provided that it

results in the performance by the agents or any other act indicating the existence of a contract. It

also recognises a contract formed by the interaction of an electronic agent and a natural person.

The Bill also makes provision for the recognition of electronic signatures107. It defines an

electronic signature to mean, ‘data in electronic form attached to, incorporated in or logically

associated with other electronic data and which is intended by the user to serve as a signature108’.

It still gives room for the validity of the provisions of other laws on electronic signatures, such as

the Evidence Act.

This bill has been passed by the National Assembly but awaits Presidential assent109. It is very

important that it be passed into law as it makes substance provision for electronic contracts and

its peculiarities.

106
ibid; section 2 of the Electronic Transactions Bill, 2017
107
ibid (n 105)
108
Section 11 of the Electronic Transactions Bill, 2017
109
ibid

45
Problems with enforceability of Electronic Contracts in Nigeria

3.6.1. Problem of jurisdiction and conflict of law :

A major advantage of electronic contracts is that it enables contracting parties to enter into

contracts cross-border, i.e internationally. However this also gives rise to a major problem, which

is that of jurisdiction. Due to the fact that parties are resident in different jurisdictions, in the

event of a dispute, the problem of the law that applies will arise. In most instances, the parties

state in the contract the law they wish to apply in the event of a dispute110.

In Nigeria, where the parties do not have a jurisdiction agreement and dispute of jurisdiction of

courts arises between state high courts, i.e. inter state, the court applies the Private International

Law principle which provides that the court with jurisdiction is where the dispute arises or where

the defendant is resident111. Where the location of the dispute is different from where the

defendant is resident, the lis pendis rule, which means the court first seised rule, will apply112.

This means that the state high court in which a proceeding is first initiated is the court which will

have jurisdiction over the matter. Also according to Perdue, the applicable jurisdiction and law

can be determined by examining some key factors, such as :

● The place of the contract;

● The place the contract was negotiated;

● The place of performance;

● The location of the subject matter of the contract; and

110
ibid (n 105)
111
In Nwabueze v Okoye, the Supreme Court per Obaseki JSC, correctly noted that, “in matters of jurisdiction, the
common law rules [on private international law] apply as between States within the Federation of Nigeria.”
112
Orji A. Nduka, Internal Conflict of Laws in Nigeria: Making a case for the Consolidation of Rules of Jurisdiction
in Inter-state Disputes.

46
 ● The domicile, residence, nationality, place of incorporation, and place of business of the

parties113

It is important to note however that in resolving a dispute arising in an online contract, it is the

location of the court that will determine the applicable law irrespective of the substantive law

applied in the contract114. Oputa JSC rightly noted in a dictum given in the case of Sonar (Nig.)

Ltd v. Partenreedri M. S. Nordwind (owners of the M.V Nordwind)115 ,thus:

What is the relevance of German law to a Liberian ship owner and a Nigerian shipper? I

see none. It is also conceded that when the intentions of the parties to a contract as to the

law governing the contracts are expressed in words, this expressed intention is general

and as a general rule determines the law of the contract. But to be effective, the choice of

law must be real, genuine, bonafide, legal and reasonable. Choosing German law to

govern a contract between a Nigerian shipper and a Liberian ship owner is to my mind

capricious and unreasonable... Luckily, nowadays a clause of the proper law by the

parties is not considered by the court as conclusive.

3.6.2. Problems associated with contracts required to be in writing :

As noted earlier, generally in Nigeria contracts can be formed orally, by writing and even by

conduct. However, there are certain contracts such as contracts concerning declaration of trusts

respecting land and dispositions of interests in land, that are mandated by law to be in writing

113
S. Perdue, “Creating Contracts Online” in T. J. Smedinghoff (ed.) Online Law, (New York: Addison-Wesley
Developers Press, 1996)
114
U. Valentine, Enforceability of online contracts in Nigeria and the jurisdiction question: The need for regulatory
framework (2016)
115
1987] 4 NWLR (Pt 66) 520.

47
these contracts are stated in the Statute of Fraud Act 1677116. Other contracts required to be in

writing are contracts for hire-purchase117, agreements between master and seamen118, marine

insurance policies119, bills of sales, bills of exchange120, money-lender’s contracts, legal

practitioner’s agreement with his client for remuneration, pawn-broker’s agreement for a pledge

and arbitration agreements121. Most of these contracts just require written evidence which online

contracts can easily satisfy.

The problem arises where the contract is required to be in form of a deed and also duly signed.

As stated by Nikki Tobi in Omega Bank (Nig.) Plc v. O.B.C. Ltd122, ‘a document which is not

signed doesn't have any efficacy in law’. As has been noted earlier, by virtue of section 84 of the

Evidence Act 2011, electronic signatures can now sufficiently satisfy the requirement of

signatures. Notwithstanding this, the issue of execution by deed remains. The form of electronic

contracts which may easily satisfy this requirement is executed by email. This is because an

email is a type of teletype platform that allows parties to append their signatures or names to the

bottom of the mail as a depiction of their agreement. In Joseph DeNunzio Fruit Co. v. Crane123,

a United State’s case, the federal court held that an exchange of teletype messages satisfied the

California Statute of Frauds (which has similar provisions to that of Nigeria). Judge O’Connor

noted in the case that the courts:

116
Section 4 of the Statute of Fraud Act, 1677
117
Section 2(1) & (2) of the Hire-Purchase Act, Cap. H4 LFN 2004
118
Article 3 of the Seamen’s Articles of Agreement Convention 1926 (No. 22)
119
Section 24 of the Marine Insurance Act, Cap. M2 LFN 2004
120
Section 3 of the Bills of Exchange Act 1882
121
Section 1 of the Arbitration and Conciliation Act, Cap. A18 LFN 2004
122
[2005] 8 NWLR (Pt 928) 547 at 581 para. D
123
79 F. Supp. 117 (S.D. Cal. 1948); 342 U.S. 820 (1951).

48
 Must take a realistic view of modern business practices, and can probably take judicial

notice of the extensive use to which the teletype machine is being used today among

business firms, particularly brokers, in the expeditious transmission of typewritten

messages124.

Unfortunately, it is however uncertain if other forms of electronic contracts can cater adequately

to the requirements of writing in deed. The Nigerian courts are yet to preside over such a matter

but it looks very unlikely as the Bill125 which seeks to strengthen electronic contracts notes its

limitations as regards certain contracts required to be in the form of a deed. Also section 17(2)

of the Cybercrimes Act 2015 greatly limits the applicability of electronic signatures to certain

contracts required to be by deed126.

3.6.3. Lack of an adequate specified law

The absence of a central law for electronic contracts in Nigeria poses a huge challenge to its

enforcement. Rather, what Nigeria has are fragments of laws which leave the parties to a contract

scrambling to piece them together in the event of a breach. The United Nations provided model

laws to govern electronic commerce and signature127 which have been adopted by other

countries128 that have seen the need and importance of having a central law governing electronic

transactions and while this does not solve all the problems of electronic contracts, as it is a

124
ibid
125
The Electronic Transactions Bill 2017
126
See pp. 37-39
127
See pp. 52-55
128
In the UK: Consumer Protection (distance selling) Regulation 2000, Electronic Commerce Regulation 2002; in
the USA: Uniform Electronic Transactions Act 1999, Uniform Computer Information Transaction Act 1999,
Electronic Signatures in Global and National Commerce Act (E-sign Act); in South Africa: Electronic
Communications and Transactions Act 2002.

49
constantly evolving field, it provides the parties with the certainty and stability they need when

venturing into the world of electronic transactions.

3.6.4. Problem of modification clauses in online contracts:

Many online transactions include in their terms, a term that allows them to modify the terms of

the contract without notice to the other party. Presently, there are no laws or judicial decisions

depicting a standard rule concerning modification clauses. In Comb v. PayPal129, the court

refused to enforce the modification clause that allowed PayPal to modify the terms of the

contract without notice. Ryan does not agree with this position of the court and is of the opinion

that the modification clause should be binding as the party read the terms and agreed to it on

their own130. He noted that this is because most websites indicate the change in their terms and

the user has a right to opt out of any changes and refuse modifications131. The High Court in Utah

seems to have adopted this view. In the 2008 case of Margae v. Clear Link Technologies132,

the plaintiff admitted that it assented to an online agreement which contained a modification

clause, on Clear Link’s Website via a “click.” Clear Link later modified its agreement to include

an arbitration clause. When a dispute arose between the parties, Clear Link invoked the

arbitration provision in the modified agreement. Margae opposed Clear Link’s motion to compel

arbitration, claiming among other things that the modified agreement was unenforceable,

because the provision allowing Clear Link to modify the terms without notice was

129
218 F.Supp. 2d 1165, 1174 (N.D.Cal. 2002)
130
Ryan Hilleshiem, Scaling the Assent: The Enforceability of Modification Clauses in Online Agreements,
<https://ssrn.com/abstract=2045829> accessed by 15 May, 2024.
131
ibid
132
LLC, 2008 U.S. Dist. LEXIS 46765 (D. Utah June 16, 2008)

50
unconscionable. The district court concluded that under Utah law, the agreement was neither

procedurally nor substantively unconscionable.

The enforcement of modification clauses till date has not been resolved by the courts. It seems

the determination of its enforceability will be dependent on the jurisdiction of the court and the

applicable law in that jurisdiction. Unfortunately, there is a scarcity of both judicial decisions and

applicable laws on the issue of unilateral modification clauses in Nigeria.

51
 CHAPTER FOUR

A COMPARATIVE ANALYSIS: UNITED NATIONS CONVENTIONS AND LAWS

FROM THE UNITED KINGDOM, UNITED STATE OF AMERICA AND SOUTH

AFRICA

4.1. United Nations133 Conventions

4.1.1. UNCITRAL Model law on Electronic Commerce134

This Model law on Electronic Commerce was an attempt by the UN to create a model law which

when adopted by its state member will create a uniformity of laws that govern the area of

electronic commerce, in which electronic contracts are subsumed. Article 11 of the Model law

on Electronic Commerce, recognises electronic contracts and provides that unless the parties

agree to the contrary, data messages135 can be used to validly express offer and acceptance and

such contract shall be enforceable. This recognises and establishes the validity of electronic

contracts. At the time in which this Model law was signed, it was important for this to be clearly

stated as electronic contracts were still relatively new.

The Model law on Electronic Commerce goes further to make specific provision for electronic

contracts involving carriage of goods, due to its peculiarities. It states that data messages

sufficiently satisfy the requirement of documents required to be in writing to make such

transportation valid. This reference is very important as most electronic contracts occur

cross-border and usually involve transportation of physical goods. However, its provision on

133
Hereinafter referred to as ‘the UN’
134
UNCITRAL Model Law on Electronic Commerce with Guide to Enactment 1996, United Nations. Hereinafter
called ‘Model law on Electronic Commerce’
135
Article 2(a) of the UNCITRAL Model Law on Electronic Commerce defines data messages as, ‘information
generated, sent, received or stored by electronic, optical or similar means including, but not limited to, electronic
data interchange (EDI), electronic mail, telegram, telex or telecopy;’

52
electronic contracts is grossly insufficient. This is understandable as it merely serves as a guide

for its members states, who upon its adoption are expected to flesh it out and simply model their

domestic laws to recognise the legal validity of electronic contracts. Thus it simply seeks to unify

the laws on recognition of the legal validity of electronic contracts.

Also, Article 6 of the Model law on Electronic Commerce recognises that contracts requiring

writing, either as an obligation or whether the law provides consequences for the information not

being in writing, are sufficiently satisfied by written data messages provided that such data

messages are accessible for subsequent use. This means that contracts required to be in writing

are satisfied by written electronic contracts. However, it is uncertain whether contracts required

to be executed by deed also fall within the ambit of this provision. Adequate provision needs to

be made to enable electronic contracts suffice where the contract is required to be executed by

deed, provided it follows the format of a physical deed. This will broaden the scope of electronic

contracts, enhance its flexibility and promote its adoption for all kinds of transactions.

On the basis of evidentiary requirements, Article 7 of the Model law on Electronic Commerce

recognises electronic signatures, provided it is unique to the person using it. Additionally, Article

8 of the Model law on Electronic Commerce recognises that some laws may require information

to be preserved in its original form and states that data messages will suffice provided its

integrity can be assured and the information is capable of being displayed to the person to whom

it is presented. This adequately solves the problem of generation of original data from websites.

53
Also most countries have recognised the difficulty in generating original evidence for electronic

contracts and have made their laws more flexible136.

Despite the fact that this model law was promulgated in the 20th century it quite adequately

covers pressing issues on electronic contracts in this 21st century. It provides an adequate

platform for electronic contracts and has been domesticated into the laws of many countries.

4.1.2. UNCITRAL Model Law on Electronic Signatures137

The UNCITRAL Model Law on Electronic Signature was made to expand on Article 7 of the

UNCITRAL Model Law on Commerce. In the footnote of Article 1, it stated that this Model law

on Electronic Signatures applied to all relationships of a commercial nature including contractual

transactions. It gives a broad definition of electronic signatures138 such that it extends beyond the

conventional signatures to include encryptions, user-names, passwords, etc.

Article 6 of the Model law on Electronic Signatures recognises that electronic signatures can

fully satisfy the requirements of signature by the law ‘whether in the form of obligation or

whether the law simply provides consequences for absence of a signature'. This solidifies the

position of electronic signatures in enabling the validity and enforcement of contracts requiring

signatures but are executed electronically.

136
Nigeria recognises this and has broadened the definition of documents to accommodate this. See Section 258 of
the Evidence Act, 2011. However, it is implied from this provision and not expressly stated.
137
UNCITRAL Model Law on Electronic Signatures with Guide to Enactment 2001, United Nations, New
York, 2002. Hereinafter called, ‘Model law on Electronic Signatures’
138
Article 2(a) of UNCITRAL Model Law on Electronic Signatures

54
The Model law on Electronic Signatures also makes provision for the 3 key parties concerned

with the validity of electronic signatures. They are the signatories139 themselves, the certification

service provider140 and the party relying on the signature141. It provides guidelines for all 3 with a

view to enhancing and securing the position of the relying party.

The Model law on Electronic Signatures not only recognises the validity of electronic signatures

but also provides adequate regulation for parties involved which is essential in promoting the

confidence of contractual parties as to the validity of the electronic contracts. However, it makes

constant use of the phrase, ‘signature creation data' but fails to define what this is. Rather a

meaning can be gleaned from its repeated usage which is data containing the electronic signature

and its code.

It is quite obvious that in drafting this Model law, effort was made to ensure that it was

consistent with both the substance and the terminology of the UNCITRAL Model Law on

Electronic Commerce. It has also been domesticated by many state members.

4.2. The United Kingdom's142 Regulatory Framework:

Most regulations and laws used in the United Kingdom were passed by the European Union.

However on the 31st of December, 2020 ceased to be a member of the European Union (EU)143.

139
Article 2(d) ibid, defines a signatory to mean, ‘a person that holds signature creation data and
acts either on its own behalf or on behalf of the person it represents’
140
Article 2(e), ibid, defines certification service provider to mean, ‘’a person that issues certificates and may
provide other services related to electronic signatures’
141
Article 2(f), ibid, defines a relying party to mean, ‘a person that may act on the basis of a certificate or an
electronic signature’
142
Hereinafter called UK
143
UK Parliament, Brexit timeline: events leading to the UK’s exit from the European Union
<https://commonslibrary.parliament.uk/research-briefings/cbp-7960/> accessed 11 June,2024

55
This move is popularly referred to as Brexit. Most of its laws followed EU regulations and

standards and after its exit, these laws were referred to as retained EU laws until the Retained EU

Law (Revocation and Reform) Act 2023 which came into effect this year replaced the term,

‘retained EU laws' with ‘assimilated laws 144'.

4.2.1. Electronic Communications Act 2000

This Act was made to facilitate the use of electronic communications and electronic data storage

in place of physical communications and data storage. The act makes provisions for electronic

signatures, electronic seals, electronic time stamps, electronic documents and electronic

registered delivery services in relation to their validity and enforceability when used in

transactions such as contracts that would otherwise have been executed physically. The major

focus of this act is ensuring the admissibility of these electronic communications and data

storage in evidence. This is very relevant in electronic contracts as it enhances the security of the

parties involved due to the fact that they can easily adduce evidence by providing any of these

electronic communications and data storages to support their position in the event of a breach of

contract.

The provision for electronic seals is very insightful as it recognises that companies can also enter

into electronic contracts, which can be legally binding, through an electronic seal. This is unlike

Nigeria which only provides for electronic signatures and does not make adequate provision for

companies that seek to contract electronically. The provision for an electronic seal also posits

that contracts requiring execution by deed can be done electronically. Also, these Regulations lay

144
Travers Smith, ‘Retained EU laws: 10 key questions’
<https://www.traverssmith.com/knowledge/knowledge-container/retained-eu-law-10-key-questions/#:~:text=Howev
er%2C%20with%20effect%20from%202024,apply%20UK%20principles%20of%20interpretation.> accessed by 24
May, 2024.

56
down a framework for what is expected of trust services (called data controllers in Nigeria) and

despite the ease with which websites are created and their plenitude, it also states clear

requirements of certifications for website to be able to execute electronic contracts or

transactions that can be validly binding. Presently in Nigeria other than the National Data

Protections Act which provides requirements for data controllers, there is no provision for

website regulations in order to ensure integrity of the website and security of the contracting

party.

4.2.2. Consumer Contracts (Information, Cancellation, and Additional Changes)

Regulations 2013

Regulation 14 provides for distance contracts concluded by electronic means. It provides that

where there is an obligation for the consumer to pay for the goods or service, the seller or

company must indicate clearly that there is a requirement for payment if not the consumer will

not be bound to pay. It is important that this requirement for payment on a website pertaining to a

sale or purchase be conspicuously displayed on the screen in order to ensure validity of contract.

The Regulation requires that the clause ‘order with obligation to pay’ be written legibly on the

button which the consumer is required to click.

This provision ensures that buyers only buy what they intend and are not billed arbitrarily

without clear knowledge of the fact that the service or goods is to be paid for. This applies when

using applications or websites whose product or services may require purchase such as Canva, an

artificial intelligence that allows users to design flyers for free or at a premium.

57
4.2.3. Electronic Commerce (Amendment etc.) (EU Exit) Regulations 2019

This statutory enactment replaced the Electronic Commerce Directive Regulations 2002. It

regulates service providers (companies or sellers) and their role in contractual agreements. It

provides that company's carrying on business online are expected to provide certain credentials

online in order to promote transparency. It also requires that proper information and clear terms

are provided for online contracts so that the customers are aware of the terms of the contract they

are entering into145. This Regulation is essential to electronic contracts as it ensures transparency

on the part of the service providers and also enhances consumer experience as they have

confidence in the electronic contract.

4.2.4. UK eIDAS Regulations

The UK has as its domestic regulation Electronic Identification and Trust Services for Electronic

Transactions Regulations 2016. Also being a former member of the EU it adopted the

Regulations (EU) Electronic Identification and Trust Services for Electronic Transactions in the

Internal Market but this has been replaced by the Electronic Identification and Trust Services for

Electronic Transactions (Amendment etc) (EU Exit) Regulations 2019. Summarily, these

regulations make provision for electronic signatures, electronic seals, electronic time stamps,

electronic documents, electronic registered delivery services and certificate services for website

authentication. It regulates trust services in order to ensure the safety of data or information in

their possession. It draws a distinction between electronic identification for companies and

145
Regulation 9 Electronic Commerce (Amendment etc.) (EU Exit) Regulations 2019

58
individuals. It provides that electronic signatures are identity data for individuals and electronic

seals are identity data to ensure the origin and integrity of the company. Also it regulates

electronic time stamps which are used to ascertain the time a particular data is provided.

Electronic time stamps are very relevant to documents required to be presented in their original

form and also in determining the amount of damages payable where calculation from the time of

breach is necessary. It also regulates certification for websites. This legal framework covers the

issue of identity marks for individuals and companies and also ensures that websites are certified

in order for them to validly create binding contracts.

4.3. The United States of America's146 Regulatory Framework

4.3.1. Uniform Electronic Transactions Act (UETA) 1999 and the Uniform Computer

Information Transaction Act (UCITA) 1999

Both Acts are a model law and an attempt at a uniform law for all states in the USA. The UETA

provides for legal recognition of electronic signatures, electronic records and electronic

contracts147. The UETA regulates them and ensures their enforceability. While UETA provides

for electronic signatures and records generally, the UCITA provides specifically for electronic

signatures and records in relation to commerce. The UCITA creates definitive rules online

formation and terms of contracts. It also facilitates computer information transactions such as

making shrink wrap contracts unenforceable and regulating software contracts in general. This

provision is also commendable as it enhances confidence between the contracting parties and

ensures the terms of the contract are binding.

146
Hereinafter called USA
147
Uniform Electronic Transactions Act (UETA) 1999, Section 7

59
4.3.2. The Electronic Signatures in Global and National Commerce Act (The E-sign Act)

2000

Unlike the UETA which may or may not be adopted by the states, the E-sign Act serves as a

uniform law regulating electronic contracts, signatures and records for interstate and foreign

relations. Every state is governed by it and any law enacted in relation to the subject matter of

this E-sign Act must not be inconsistent with it. It provides for flexibility of choice between the

parties as to the means of authentication which they may wish to adopt and this is viewed as their

own electronic signature. This leaves a wide room for what could constitute electronic

signatures, provided the parties can defend it148. A unique provision found within the E-sign Act

is that of online children protection. Unfortunately no such provision is found in Nigerian law.

4.4. The South African Regulatory Framework

4.4.1. Electronic Communications and Transactions Act 2002

This is an all encompassing Act. According to its introduction, it aims to provide for the

facilitation and regulation of electronic communications and transactions. It also seeks to

promote universal access to these electronic communications and transactions and to prevent

abuse of information systems. Thus it provides for electronic signatures, requirements of writing,

service providers, consumer protection, websites, cybercrimes and even provides for the issue of

jurisdiction of courts. The Electronic Communications and Transactions Act also provides for

online transactions and documentations by government bodies.

148
The Electronic Signatures in Global and National Commerce Act (The E-sign Act) 2000, Section 301

60
The Electronic Communications and Transactions Act is a very thoughtful initiative due to the

fact that contracting parties can easily find all they require to regulate their electronic contract in

a single law. It really simplifies the process.

4.5. Observations

As can be seen from the above analysis of the laws of the UK, USA and South Africa, deliberate

and conscious attempts have been made to regulate electronic contracts and while it can not be

said that all problems associated with electronic contracts have been fully resolved by these laws,

they have provided sufficient guide to ensure the validity of electronic contracts and deal with

pressing issues associated with it. Of all three legal systems though, the South African approach

seems to be the best as it has a single law adequately providing for electronic contracts, which is

unlike the other two which have multiplicity of laws with the UK being the worst.

As has been aforementioned, the provisions on electronic seals enable companies and

government bodies to enter into electronic contracts and this is very important as it will enhance

the confidence of the parties entering into the contract as to its validity and boundedness.

Implementation of this into law by Nigeria will ensure that there is an increase in contractual

relations, intranationally and internationally, thus ensuring economic development and societal

growth. Another useful provision was that made for electronic time-stamps. This adequately

addresses the issue of originality required when presenting documents in evidence. In Nigeria the

provision governing originality of electronic documents is implied from its definition in section

61
258 of the Evidence Act, 2011. Implementation of an express provision on electronic

time-stamps will adequately resolve the issue.

While Nigeria has through enacted laws and case laws, given legal recognition to electronic

contracts, it does not have an all encompassing law regulating it and also fails to provide for

certain areas of electronic contracts such as websites, companies and government. The next

chapter will seek to proffer recommendations which Nigeria can implement to address these

issues.

62
 CHAPTER 5

RECOMMENDATIONS AND CONCLUSIONS

5.1. Summary

As can be seen from the above findings, Nigeria though it has recognised electronic contracts as

being valid and enforceable, lacks the proper framework required to facilitate its formation and

does not cover certain areas which may affect enforceability. Also, the available laws regulating

electronic contracts focus majorly on that occurring between individuals and individuals or

individuals and services providers or data controllers. There is no adequate provision regulating

that occurring between companies or even regulating that of companies entering into electronic

contracts with individuals. Moreso, it fails to take into cognisance the fact that the government

can also enter into electronic contracts. It has no law regulating the issue of jurisdiction of the

court and on the requirement of original evidence, there is no express definition rather parties

tend to rely on the definition of electronic documents provided in Section 258 of the Evidence

Act 2011149.

5.2. Recommendations

● Nigeria needs to enact a singular legislation like South Africa that seeks to regulate

electronic contracts, not just for individuals but also for websites, companies and the

government. It is important that this law be made to promote uniformity as to the law on

electronic contracts amongst the states of Nigeria. Item 62 Part 1 of the Second schedule

of the Constitution of the Federal Republic of Nigeria, 1999, empowers the National

Assembly to make laws on trade and commmerce between Nigeria and other countries

149
See p. 35

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 including import of commodities into and export of commodities from Nigeria, and trade

and commerce between the states. Electronic contracts fall within this ambit particularly

that which occurs interstate and internationally.

● Specific provision needs to be made to enable electronic contracts to suffice where the

law requires the contract to be executed by deed. As noted above the proposed Electronic

Transactions Bill does not cover contracts to be executed by deed.

● A wide approach should be given to what constitutes electronic signature as provided in

the USA legislation which enables parties to determine what they would like to use as an

electronic signature, provided they agree to it and can defend that it is an electronic

signature for the purpose of their contract. This will enhance freedom to contract while

ensuring enforceability.

● Specific provisions also need to be made for electronic seals which apply to both

companies and the government, in order to better enhance their position in entering into

electronic contracts. This will improve Nigeria's economy as the trust generated from

electronic security will result in an increase of electronic contracts locally and

internationally.

● It is important, in order to resolve the issue of jurisdiction of court where the electronic

contract is between parties in the same country but different states, that a provision be

included in the recommended Act which will clearly address the issue and put any

possible conflict arising from it to rest. It is recommended that a provision mandating that

parties have a choice of law or jurisdiction agreement should be stated in the

recommended Act. Where it is international, it is also important that parties have a

jurisdiction agreement, however where there is none it is advised that Nigeria should

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 form bi-lateral agreements with countries that it or its citizens are prone to form

contractual relations with150 or private international law principles will apply151.

● Lastly, the Company Allied Matters Act 2020 needs to be amended to enable registration

of company domain names or websites and not just documentation for physical locations.

This will enhance the confidence of customers when entering into contractual

relationships with these companies or websites and most importantly enable them to trace

the websites to a physical location in the event of breach of contract. It will also prevent

other person from using similar names or its affiliations to create fake websites.

5.3. Conclusion

Electronic contracts, though it shares striking similarities to traditional contracts, have their

peculiarities which need to be adequately provided for by law. It is quite clear from the above

findings that electronic contracts are the future of contracts and though continuously evolving, is

here to stay. Countries such as those analysed in this essay, have as far back as the early 20th

century, recognised this and made provision to regulate it effectively and ensure its

enforceability.

Nigeria is also not left out as through a plethora of laws as examined above, it has recognised the

validity and enforceability of electronic contracts and has made provision to regulate certain

areas such as electronic signature, electronic documents as admissible evidence, cybercrimes,

150
Presently, Nigeria has bilateral investment agreements with 31 countries and 15 of these are in force. Nigeria also
has double tax treaties with 13 countries. Source: Department of Commerce, United States of America, Nigeria-
Country Commercial Guide
<https://www.trade.gov/country-commercial-guides/nigeria-trade-agreements#:~:text=Nigeria%20has%20bilateral%
20investment%20agreements,Investment%20Framework%20Agreement%20(TIFA).> accessed 27 May, 2024.
151
See p. 46

65
data protection, etc. However, Nigeria’s attempt at regulating electronic contracts still remains

highly inadequate as it does not provide a single legalisation that focuses solely on electronic

contracts. It also fails to provide for certain key players in an electronic contract such as

websites, companies and even the government.

In summary, while Nigeria recognises electronic contracts and makes it enforceable, there

remains certain grey areas which must be addressed by the enactment of a single uniform

legislation in order to solidify its enforceability and enhance the formation of electronic contracts

both domestically and internationally.

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