The Lesotho Electronic Transactions and Electronic Commerce bill : will it replace the common law of contract as we know it?

• Pages: 117-144
• Published date: 01 January 2015
• Author: L.L. Ramokanate
• Date: 01 January 2015
• DOI: 10.10520/EJC177115

_____________

* LLB Hons (NUL), LLM in Import and Export Law (NWU), LLD candidate in

Trade and Business Law at NWU. Advocate of the Courts of Lesotho.

ramokanatel@gmail.com.

THE LESOTHO ELECTRONIC

TRANSACTIONS AND ELECTRONIC

COMMERCE BILL: WILL IT REPLACE THE

COMMON LAW OF CONTRACT AS WE

KNOW IT?

L.L. Ramokanate*

Abstract

At both domestic and international level, the mode of

trading is rapidly shifting from paper to electronic

commerce. Businessmen have openly embraced the

innovations of Information Technology. From simple

negotiations, to payments of huge sums of money,

everything is being done through wires and cables.

While electronic commerce has greatly simplified trade

for businessmen, it has however sadly complicated

commercial legal practice and scholarship. Amongst

the most troubling aspects of electronic commerce is the

issue whether the common law of contract should

continue to apply to electronic transactions exactly as

it does to paper based contracts, or whether in the light

of this revolution, we need a new legal framework? In

an effort to accommodate electronic commerce in that

jurisdiction, the Parliament of Lesotho is currently

working on a Bill which is intended to govern

electronic commerce once passed into law. While

anticipating the Act, perhaps it is wise as early as now

to determine how it will affect the law of contract as we

know it?

Introduction

The business world has made an unprecedented turn from the

physical to the virtual. Today, businessmen prefer to negotiate and

118 The Lesotho Electronic Transactions

conclude contracts through electronic instruments of

communication, furthermore to transfer and store trade records in

electronic formats. This turn of events, properly known in law as

electronic commerce,

1

has greatly simplified the conduct of business

the world all over. The three main benefits of electronic

communications are a reduction in transactional costs,

2

internationality and speed in the transmission of communications.

3

As a result, contracts can be concluded with anyone around the

globe within a very short space of time at affordable costs. Ever

opportunistic in their agenda, businessmen have seized these

benefits without any care as to the validity and enforceability of

electronic contracts in law. However, it is clear from their conduct

that they hold a firm belief that electronic contracts are valid and

enforceable in law, otherwise "they would not enter the digital

market place."

4

It is a sad reality however that legal practitioners

and scholars remain divided on the question of the validity and

enforceability of electronic contracts. Some hold the view that the

common law of contract is inadequate or insufficient to cover legal

issues arising from electronic contracting.

5

On the other hand,

others are of the opinion that the common law of contract is

sufficient to resolve legal issues arising specifically from electronic

1

Electronic commerce (hereinafter e-commerce) is often defined a s paperless

commerce in the sense that commercial communications and transactions are not

recorded on paper but electronic mediums of communications. See Delmedico

A., 'EDI Bills of Lading: Beyond Negotiability', 2003 (1)1, Hertfordshire Law, Journal

95.

2

Eiselen S., 'CISG and Electronic Issues', 2008-2009 (10), International Law Review of

Wuhan University, 138.

3

Boss A.H.,'The International Commercial Use of Electronic Data Interchange and

Electronic Communications Technologies', August 1999, (46) 4, The Business Law

Lawyer, 1787.

4

Gringras C. The Laws of the Internet, (2 nded) Butterworths Lexis Nexis, Lon don,

2003, p 14.

5

Pistorius makes the point that "The principles of contract law are old - they were

formed in a world of paper and ink. The meeting of minds in cyberspace was

never envisaged, and the validity a nd effect of the use of electronic messages in

commercial communications were never contemplated. So the advent of the use

of electronic communications for commercial transactions pose[s] unexpected

and complex legal problems". See Pistorius T., 'Click-Wrap and Web-Wrap

Agreements' 2004 (16) S. Afr. Mercantile L.J., 568.