Digitalization of Transactions and Consumer Protection in Wrap contracting

Abstract

E-commerce today gives opportunities for businesses in the online environment to expand their businesses rapidly and provide services to larger group of online consumers. Although the online medium is a comfortable platform for carrying out commercial/consumer transaction, the purchasers are disadvantaged due to various major reasons like lack of adequate information about the products and services, acceptance of the standard form contracts (SFC) which binds parties to the terms and conditions prescribed by the e-commerce business providers based on their convenience which includes dealing with defects, redressal mechanisms included, etc. This leave no option/feedback for online purchasers before or at the time of making their transaction. One of several defences which can be claimed by the online purchasers is unconscionability in contract clauses. The difficulty on the part of consumers is to prove unfairness which can be either substantive or procedural. To deal with SFCs, courts have concerned that online users consenting to these agreements leads to absolute exploitation on the part of businesses without considering the mutual benefits of either party which is the essence of the contract. The article focusses on the concept of wrap contracting, the legality and enforceability of standard forms used in digital transactions and existing legal regimes in various jurisdictions and also steps to be taken to regulate web-based business/service providers in dealing with modernized electronic contracting. The article reveals that the existing legal mechanisms and the role of law dealing with SFCs is not adequate protecting online consumers and there is an urgent need to amend or formulate regulations leading to absolute consumer protection.