Online Contract Formation: Taking Technological Infrastructure Seriously

39 Pages Posted: 8 May 2004

See all articles by Joseph Savirimuthu

Joseph Savirimuthu

University of Liverpool - Law School


If one mentions online contract formation students and academics intuitively turn to the legal rules. This interpretive community seems less than convinced that the distinctive features of the virtual environment have new insights to offer. Whether that is likely to be the case cannot be ascertained if we continue to map our understanding of online contract formation in accordance with the textbook tradition of contract law. An illustration of this pattern of analysis can be seen by the way that discussion and analysis of online contract formation frequently focuses on two issues: first, the applicability of contract principles and, second, the shortcomings of the Electronic Commerce (EC Directive) Regulations 2002. A consideration of the value of consent and of its role in contract formation and operative factors, with regard to the way in which obligations are characterized, suggests that the overemphasis on the process/method distinction is misleading. The paper demonstrates the following: (a) that, to the extent that the rules of contract formation are relevant, they provide a preliminary and not a final point of understanding; (b) that the dominant role of computers in structuring and processing communications makes it critical to identify the values embedded in the technological infrastructure; and (c) that the narrative of values in the technological infrastructure provides a better route to understanding online contract formation. Illustrations are provided to support the hypothesis. The layer principle, it is suggested, provides an appropriate basis for reconciling contract doctrine with the central role of the Electronic Commerce (EC Directive) Regulations 2002. The paper concludes that attempts to understand the governance challenges for online contract formation through legal rules are misplaced. To understand the contemporary role of contract we need to integrate the communications systems of hardware and software into our understanding of what it is that gives commitments their binding character.

Keywords: Legal theory, contract, cyberlaw, regulations

Suggested Citation

Savirimuthu, Joseph, Online Contract Formation: Taking Technological Infrastructure Seriously. Available at SSRN:

Joseph Savirimuthu (Contact Author)

University of Liverpool - Law School ( email )

Liverpool L69 7ZS
United Kingdom

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