First: Definition of Electronic Contracts
The electronic contract is considered the cornerstone of e-commerce systems, as it represents a legal translation of the meeting of wills between contracting parties. Since the electronic environment differs fundamentally from the traditional contracting environment, such contracts should be surrounded by a framework of legal safeguards to mitigate the risks associated with concluding them, considering that they are contracts concluded remotely.
Article 1, Clause 3 of Royal Decree No. 39/2025 issuing the Electronic Transactions Law defines an electronic document as:
“a contract, entry, record, message, or any other document created, stored, retrieved, copied, sent, communicated, or received, in whole or in part, by electronic means.”
Article 2 of the law also states: “The provisions of this law apply to electronic transactions, documents, signatures, and trust services.”
The Omani legislator has permitted the conclusion of contracts electronically via electronic messages. Article 8 of the Electronic Transactions Law stipulates: “An electronic document is considered a written document and produces its legal effects if its creation and adoption meet the conditions specified in this law, its regulations, and the decisions issued to implement its provisions.”
According to Article 1, Clause 2 of the law on electronic transactions and E-Commerce are defined as transactions and e-commerce operations: “Any act or agreement related to an electronic document carried out or executed in whole or in part by electronic means.”
The electronic contract is considered the lifeblood of e-commerce. Scholars’ opinions vary regarding its definition, but it can be defined as follows:
“It is an agreement in which offer and acceptance meet concerning goods and services—via an international remote communication network—using audible and visual means that allow interactive dialogue between the offeror and the offeree.”
Second: Characteristics of Electronic Contracts
An electronic contract arises from the meeting of offer and acceptance in an audiovisual manner, without the need for the parties to physically meet in a specific location. Accordingly, the concept of an electronic contract does not differ from the traditional concept of contracts. There must be mutual consent free of defects in will, in addition to the legality of the subject matter, which must be defined or definable, as well as the legality of the purpose.
These contracts have several characteristics: they are conducted remotely without physical presence, tend to have an international nature, and are typically commercial contracts.
This invites us to review the main characteristics of electronic contracts as follows:
- Electronic contracts belong to the category of contracts conducted remotely
The particularity of an electronic contract lies in how it is concluded. An electronic contract is concluded remotely through modern communication technologies. The electronic contract may share this feature with some other forms of contracting, such as contracts concluded via television or telephone, but it is unique in that its parties meet through both audible and visual means simultaneously via the Internet, which allows interaction between the parties.
Communication between contracting parties not present in the same location, even if they meet at the same time, is still considered contracting at a distance or between absent parties.
If electronic contracts are concluded remotely, their execution can also take place remotely, without the physical movement of the parties or their meeting in a specific location. Examples include banking service contracts between a bank and a client (such as credit cards), legal consultation contracts between a lawyer and their client, and medical consultation contracts between medical institutions. This also includes certain services such as downloading software, where a client can copy or transfer various programs from the Internet to his own computer. All of these contracts are executed remotely through a telecommunications network.
The emergence of electronic contracting has created a revolution in the field of commerce in general, contributing to a change in the concept of globalization, as major global companies no longer need to branches exist in countries around the world to market their business, and the merchant—wherever he may be—has become no longer restricted to the local market. The entire world has effectively become a free market through the internet. This has led to strong competition, which has positively reflected on the national and global economy, and has resulted in achieving many economic advantages for both commercial projects and clients alike.
2. The Special Nature of Electronic Contracts
The nature of electronic contracts raises differences of opinion among jurists. One school of thought holds that an electronic contract is like a traditional contract and differs only in the electronic means through which it is concluded. Accordingly, it is referred to as an e-commerce contract. However, the commercial character is not necessarily inherent in an electronic contract, such as contracts for accessing a network.
Sometimes the purpose of concluding an electronic contract is to enable interaction with or through the internet, such as contracts for internet access, website creation, or email services.
3. Electronic Contracts Between Negotiation and Adhesion
The expression of will is not bound to a specific form. A contracting party may express their intent in any manner they prefer, provided it conveys a meaning understood by the other party. Expression may be through writing, speech, or gestures, and it may also be expressed through a specific practical act that indicates the parties’ intent to contract, as long as the act is sufficient to demonstrate this intent.
Does an electronic contract fall under the category of negotiated contracts or adhesion contracts?
The technological leap in communication means has resulted in extremely fast contract conclusion and inequality between contract parties. Standardized contracts have spread, approaching the nature of adhesion contracts—pre-prepared, technically drafted with precise terms, and uniform conditions applicable to all—which are close in nature to contracts of adhesion.
What most distinguishes adhesion contracts is the way the offeror presents the contract to the other party, following the logic of “take it as it is or leave it as it is.” This type of contract is considered an adhesion contract only if it contains certain conditions that the other party would not have accepted had they been given the freedom to negotiate. Accordingly, it can be said that the will of the adhering party is defective; therefore, if consent is verified and found to be sound, such contracts cannot be described as adhesion contracts.
Adhesion contracts generally relate to consumer goods and services.
Various countries have enacted legislation regulating the conditions of contracts concluded between a trader and a consumer. These laws prohibit “unfair terms” that limit the consumer’s options in the event that the trader breaches the contract, such as preventing the consumer from resorting to the courts or obtaining compensation, and similar restrictions.
In electronic contracts, the offeror often directs the offer to the public in the form of a pre-prepared template delivered through modern communication technologies. The person to whom the offer is addressed may accept it as it is, without any discussion or objection. The contract must also relate to an essential good or service and must fall under either a legal or actual monopoly.
A consumer contract involves the supply of goods or services, but the provider of the good or service is a producer or professional, while the recipient is the consumer seeking to satisfy personal or family needs. Therefore, there is no specific category that can be labeled “consumers”; rather, all individuals in society may be considered consumers, albeit to varying degrees.
It is difficult to establish special rules for consumer protection in this type of contract because the parties do not meet in person. Nevertheless, this does not mean that there are no rules for regulating such contracts.
4. International Electronic Contracts
The traditional concept of classical commerce has evolved, and this transformation has affected many aspects of transactions between individuals. Their legal positions have changed, and the foundations of civil and criminal liability have developed.
The Internet provides a set of modern technologies that allow the crossing of geographical borders between countries. Information now flows freely across international boundaries, and legal relationships are no longer confined to the national sphere. Instead, they have notably expanded to allow contracting between groups of individuals who are geographically distant. In this way, the electronic contract has penetrated all borders.
An electronic contract may be domestic when it is concluded within the territory of a state between contracting parties belonging to the same country. It may also be international according to one of the following two criteria:
A – The Legal Criterion
According to this criterion, a contract acquires an international character if the contracting parties belong to different countries.
B – The Economic Criterion
According to this criterion, a contract is considered international if it relates to the interests of international electronic commerce, resulting in the flow of goods, products, and services across borders.
Electronic contracts constitute a significant proportion of electronic commerce, which is characterized by its international nature. As a result of this nature, such contracts have become subject to laws similar to international laws and agreements, although these laws are implemented through electronic means.
The international nature of a contract raises a number of legal challenges, including determining the legal capacity of the contracting parties, verifying the identity and financial standing of the other party, determining the court with jurisdiction over electronic contract disputes, and identifying the applicable law.
5 – Methods of Payment in Electronic Contracts
The methods of payment and settlement in electronic contracts differ from traditional methods. Information technology has generated modern means for delivering banking services, managing banking operations, making online payments, managing accounts remotely, and the widespread use of payment and credit cards. The concept of the electronic wallet and the smart card is now becoming common, paving the way for the end of paper and metal currency and opening the door to the concept of electronic or digital money.
6- Proof of Electronic Contracts
The particularity of the electronic contract, compared to traditional contracts, is evident in the field of proving such a contract. Paper documentation is what confirms the physical existence of a traditional contract. Thus, writing is not considered complete evidence unless it is signed manually by its owner.
In contrast to traditional contracts, an electronic contract is proven by the electronically signed electronic document. This document represents the main reference that embodies the rights of the parties and defines their mutual obligations.
References:
- Ref: Dr. El-Sayed Mohamed El-Sayed Omran, Consumer Protection During Contract Formation, Al-Maaref Establishment, Alexandria.
- Ref: Dr. Tamer Mohamed Suleiman Al-Dimyati, Proving Electronic Contracting over the Internet.
- Ref: Dr. Khaled El-Sayed Mohamed Abdel-Majeed Mousa, The Electronic Employment Contract.
- Ref: Dr. Mohamed Ali Al-Qary, Research titled Adhesion Contracts.
Prepared by: Mr. Saied Ahmed Ahmed
Al-Alawi & Co – Lawyers and Legal Consultants
Muscat, Sultanate of Oman