E-CONTRACTS & E-SIGNATURES

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 Contracts and their Formalities

• The formalities of a contract under traditional

contract law are well understood – the ingredients
being:
1. an offer by a party;
2. an acceptance by a offeree; and
3. consideration…
4.….
WHAT IS E-CONTRACT?
• Is a contract formed in the course of transactions
between parties using electronic means such as email
or a text message.

• It also includes a contract executed/concluded with

an electronic signature using a digital signature such
as DocuSign and similar certificated and licensed
signature software.
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• While previously all contracts which needed to be in
writing required a physical/hard copy writing,
Kenyan Law now provides that the requirement of
writing is satisfied if such an agreement is rendered in
an electronic form that is accessible for future
reference.

• This now validates digitally signed contracts or

contracts made solely by email and even text
messaging and renders such electronic contracts to be
legally enforceable.
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(i) E-Contract Offers
• Under s83J of Kenya Information and Communication
Act (KICA), an offer and acceptance of an offer may be
expressed by electronic means. Globally, it is widely
accepted that offers on websites and via email should
adhere to the traditional contract law requirements of a
valid offer.
i. expressed in clear and certain terms;
ii. communicated to the offeree (“the person to whom it
is addressed); and
iii. made with the intention to become binding on the
offeree.
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• Consider the display of items for sale on commercial websites such
as Amazon or Jumia = an offer or is it an invitation to treat?

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The Current Legal Framework on Electronic Contracts

• S83J of the KICA provides that save for statutorily exempt

contracts, a contract shall be valid and enforceable even
when the contract is formed electronically.

• For instance, negotiable instruments such as promissory

notes and cheques are still required to be in hard copy as
they are specifically exempt from the law on electronic
transactions under s83B of KICA.
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 Business Laws Amendment Act, 2020
• In an effort to provide an effective legal framework for the
practical implementation of s83 of the KICA on electronic
contracts and electronic transactions, Parliament enacted
the Business Laws Amendment Act to support the KICA.

• This 2020 Amendment inter alia solidified and aligned the

statutory provisions under KICA as pertains to electronic
contracts and electronic signatures with other existing
statutes relating to land; registration of documents and
stamp duty
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1. Amending the Land Registration Act to provide that instruments
for the disposition of interests in land may be in electronic form
(i.e. electronic contracts).
2. Amending the Law of Contract Act to provide that where a
contract related to the disposition of an interest in land requires a
signature by any signatory, this shall be fulfilled by an electronic
signature. This effectively allows electronic real estate contracts
(i.e. electronic signatures in addition to wet ink signature).
3. Amending the Stamp Duty Act to allow for electronic stamping
of documents that have been assessed with stamp duty tax (i.e.
removing the need to take the original hard copy document for
physical stamping by the office of the Commissioner for Stamp
Duty).
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When can E Signatures be used?
• Parties in Kenya may now use an e-signature where contract is
required to be signed and such signature shall only be valid if
an advanced electronic signature is used.
• An advanced electronic signature means a digital signature using
a signature creation software whose authenticity can be
authenticated & if:
i. The signature data is linked to each signatory and no other
person (this is best indicated through the electronic signature
certificate created after each signatory has signed).
ii. The signature data was under the control of the signatory
and no other person.
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 Foreign and Local Parties: Cross Border Electronic
Contracts
• Where the contract relates to a cross border transaction, it
is absolutely essential for the purposes of enforceability of
the contract to check whether the jurisdiction where the
other party is domiciled AND the jurisdiction where you
will seek recognition and enforcement of the contract also
recognize electronic contracts and electronic signatures.

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(ii) E-Contract Acceptance
• An offeree ought to communicate the acceptance of an
offer to the offeror. With regard to emails, communication
is effective when the offeror receives an emailed
acceptance of the offer.
• It is generally accepted that email acceptance takes effect
when the email arrives on the servers that manage the
offeror’s email. (Art 24 of the UN Convention on
Contracts for the International Sale of Goods; Article 15
(2) of the UNCITRAL Model on Electronic Commerce and
s 102(a)(52)(B)(II) of the US Uniform Computer
Information Transactions Act).
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Offer and acceptance process through “clickwrap”
agreements
• Most websites, manage the offer and acceptance process
through “clickwrap” agreements.
• Clickwrap agreements require users to click a button or link
to indicate confirmation of an order or acceptance of terms.
• For example, after placing an order on Amazon, the site
requires the customer to select preferred delivery options
and to confirm the order and acceptance of terms by
clicking “I Accept” or “Submit“.
• Most companies use both the clickwrap agreements and
email notifications to denote acceptance. (read receipt)
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Offer and acceptance process through“browsewrap agreements”
• In some instances, website providers display their T&C’s
through “browsewrap agreements”.
• In contrast to clickwrap agreements, browsewrap
agreements do not require users to take any action to
indicate assent to terms.
• For instance, the terms may be placed in a hyperlink which
leads to a separate page containing the detailed terms.
Alternatively, the terms may appear at the bottom of the
web page in small print.
• Browsewrap agreements fall short of the acceptance
requirements set out above. Therefore, in the event of a
dispute, it becomes difficult to prove that the terms have
been sufficiently incorporated into an electronic contract.
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 CAT 2 (SIT IN)

DATE: 24 NOVEMBER 2021

VENUE: LECTURE HALL
TIME: 11H00 – 12H00
MARKS: 30

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