Advertisement of goods for sale on websites : a pre-legislative scrutiny of section 10 (2) of the Lesotho Electronic Transactions and Electronic Commerce Bill 2013

• Record Number: lesotho_v26_n1_a4
• DOI: 10.10520/EJC-110b164f4a
• Author: L. Ramokanate
• Pages: 105-146
• Date: 01 September 2018
• Published date: 01 September 2018

ADVERTISEMENT OF GOODS FOR SALE ON WEBSITES: A

PRE-LEGISLATIVE SCRUTINY OF SECTION 10 (2) OF THE

LESOTHO ELECTRONIC TRANSACTIONS AND

ELECTRONIC COMMERCE BILL 2013

Ramokanate L.



Abstract

At common law, there is a presumption that advertisements of

goods for sale to the public constitute invitations to treat,

rather than firm offers. That rule was admittedly developed in

a paper-based environment, decades before the advent of

electronic commerce and the digital economy. Modern traders

prefer to ply their trade online, and to advertise their goods on

websites instead of newspapers, catalogues and other

traditional media. In light of certain compelling differences

between websites and traditional media, the advertisement of

goods for sale on websites has understandably given rise to

the issue whether the doctrine of invitation to treat continues

to apply in their instance. This is so because most websites

fuse conventional advertising with transaction-processing

capabilities, meaning that they can automatically conclude

agreements of sale with customers without direct human

intervention. In the case of digital goods (such as e-books and

computer programs) these websites can also automatically

perform contracts, e.g. by allowing customers to download

items. The object ive of this paper is to conduct a pre-

legislative scru tiny of section 10 (2) of the Lesotho Electronic

Transactions and Electronic Commerce Bill 2013: primarily

 LLB (NUL) LLM LLD (NWU). Lecturer in the Department of Private Law

at the National University of Lesotho, Member of the Golden Key

International Honour Society, NWU Chapter. ramokanatel@gmail.com.

106 LLJ Vol. 26 NO. 1

with a view to determining how that provision addresses the

issue of the legal effect of website advertisements.

INTRODUCTION

The Internet is increasingly changing the way businesses produce

and market goods.1 This transition entails, amongst others, the use

of websites in the place of brick -and-mortar stores.2 Commonly

referred to as electronic storefronts,3 these websites effectively

permit merchants to ply their trade online. The first benefit of

trading online is that the internationality of the Internet significantly

broadens a merchant’s sphere of trade. 4 Unlike a brick-and mortar

store, whose clientel e is limited to individuals that are resident

withi n its geographical setting, an electronic storefront ca n b e

1 See UNCTAD, World Investment Report 2017: Investment and the Digital

Economy (UN Publications, 2017) pg iv.

2 See Nicole Fallon, ‘Retailing on a Budget: 7 Brick-and-Mortar

Alternatives’< https://www.businessnewsdaily.com/8191-retail-

store-al ternative s.ht ml > accessed 07 July 2018. The substitution of

brick-and-mortar stores by websites is usually referred to as electronic

commerce, see Patricia Brumfield Fry, ‘Introd uction to the Uniform

Electronic Transactions Act: Principles, Policies and Provisions’ (2000-

2001) 37 Idaho Law Review pg 239, stating that “[t]he image which

springs to the mind of most people when the term ‘electronic

commerce’ is used generally is a retail purchase using an I nternet

site.”

3 See Techo pedia, ‘Electronic Storefront’

accessed 05 July 2018

stating that “[a]n electronic storefront is an e-commerce solution for

merchants who want to host a website that advertises their prod ucts

or services and for which consumer transactions are g enerated

online.”

4 Joan Cradock and Kurt April, E-business: Redefining the Corporate

Landscape in South Africa (Butterworths Durban 2000) pg. 19.

107

visited by anyone across the globe that has access to the Internet. 5

The second benefit of electronic commerce is that modern websites

often fuse traditional advertising with transaction-processing

capabilities:6 meaning for purposes of present considerations that –

over and above advertising goods on them – merchants can also

automatically conclude contracts of sale with customers through

these websit es. 7 In this manner, online traders are able to capitalise

on labour costs by substituting human cashi ers with automated

processes. With regard to customers, apart from the frequency of

discounts and promotions, 8 the main benefit of electronic commerce

is that one can go on a s hopping spree in the comfort of their home,

and can easily compare prices by browsing from one electronic

5 Lehlohonolo Ramoka nate and Wian Erlank, ‘Challengin g Old

Perceptions: The Classification of Website Advertisements Accordi ng

South African Contract Law’ (2016) Obiter pg. 509.

6 Tana Pretorious, ‘Formation of Internet Contracts: An Analysis of the

Contractual and Security Issues’ (1999) South African Mercantile Law

Journal pg. 286; Clive Gringras, The Laws of the Internet (Butterworths

1997) pgs. 17‒18.

7 Lorenzo Sasso, ‘Certain Comparative Notes on Electronic Contract

Formation’ (2016) Pravo. Zhurnal Vysshey Shkoly ekonomiki pg 208.

8 See Ravi Kumar, ‘Online Retail in India – A Disruptive Force’ (2015)

IX Samvad pg. 4, stating that “[t]he first and the foremost reason has

been the availability of huge discounts online. These discounts have

become a big attraction even for hard core shoppers who like

exploring brick and mortar outlet s. So much so that a few of them

visit the stores for the t ouch an d feel aspect of the product, explore its

features thoroughly in the traditional retail outlets and then come and

buy online at reduced prices at higher comfort levels;” see also

Benjamin Groebner, ‘Oops! The Legal Consequences Of and Solutions

to Online Pricing Errors’ (2004) 1 Shidler Journal Law Commercial &

Technology at para 15, stating that “[r]egular retailers, like

Amazon.com, often offer sales that are not typical for brick-and-

mortar retailers.”