The Impact Of Contract On Dispatch

Nupur Mathur elucidates the concept of Contract on Dispatch and the aspects therein. 

The evolution of electronic and digital media and rapid increase in online shopping has provoked the reassessment of contract law. With a single click of mouse the consumer can afford to shop his favorite products online without even stepping outside his residence. The capacity to create contracts online has reformed the business law. With the development in information and software technology, it has almost raised the standard of living and lifestyle of public in an extraordinary way. No more geographical and time constraints can limit the power of technology to transmit to people residing in any part of the world. Nowadays, every contract is created online whether the aim is shopping, construction; industrial or marketing, people are directing themselves towards the benefits of online transactions. E- Contract basically deals with contracts purposed and executed through software system. Generally the vendor will provide an advertisement of his products which will be considered as invitation to treat and once the customer like the product according to his preferences he will place the order online and it will get dispatched in a period of time. This working is guided through an online contract made by the holder of website. This research article argues that “Contract on dispatch” terms are infringing the consumer interest in adherence to online shopping. Further, this condition restricts the consumer competency to bring a motion based on presence of contract when goods are not dispatched to the consumer.

Customers who shop online may not be anxious about the question – When a binding contract arises during online transactions? This question will surely emerge in the minds of consumers in case the purchase goes wrong and they want to claim remedy. During online shopping there are various aspects which can tell the time the contract has been established. Normally, the consumer will browse the website products and select his appropriate product according to his taste and preferences, progress towards checkout, fill delivery information and mode of payment. A check box will emerge asking consumer consent for the purchase stating –“I Agree”. After that, an order confirmation mail or a text message is sent to the customer to track the product. There are two methods to incorporate the terms and conditions of the trader i.e. – Click wrap method Or Browse wrap method. The above stated example is under Click wrap method. Under Browse wrap method the terms and conditions are prescribed below the website which administers the contract made by the company with any party. There are various operations which reflect the time of creation of valid and binding contract like – I Agree button, filling delivery and payment details, order confirmation page, order confirmation message and mail etc. Beside the general undertakings of online shopping transactions, there are numerous other expressions which create violative terms and conditions in pursuance of contract laws. One tremendous example for this upcoming feature is:-

“We only accept your offer, and conclude the contract of sale for a product ordered by you, when we dispatch the product to you and send e-mail confirmation to you that we’ve dispatched the product to you.”

The above stated line describes the circumstances, consequences and after effects of the products which are never dispatched. “Contract on Dispatch” term provides complete discretion to the traders referring to the performance of the contract. Based on the existence of the contract, there will be no contract if the product is not dispatched to the consumer even if the consumer pays the amount of the product. And, if there is no contract the consumer cannot indemnify himself from the purchase. If the “Contract on dispatch” term is considered to be valid, it will raise controversial remarks in contract law which can unfold into various conflicts between the trader and consumer. The terms are paradoxical and self – defeating as trader on one side is affirming that there is a contract when the goods are dispatched and on the other side no contract. It will be misleading and deceptive for a consumer when the term “Contract on dispatch” is included in standard terms and conditions which refuses the existence of contract until the goods are dispatched. The inclusion of this condition in standard terms and conditions policy of the company results in no particular attention in most of the cases in online shopping. To breakdown a “Contract on Dispatch” term the consumer can claim from the famous theory of equitable principles of estoppel. It will be accessible to a consumer to contend that the actions of the dealer in operating a site which permits the consumer to decide on particular goods and fill in payment for those goods following indication of contract to the trader’s conditions means that the dealer is estopped from question the existence of a contract.

 The “Contract on Dispatch” term creates a grey area of terms and condition policy of company as the trader is provided with the power to nullify the existence of contract by not performing it and is capable enough to terminate the contract by not delivering the said product to the customer. The “Contract on Dispatch” provokes various queries like – “Whether the terms and conditions provides right to merchant to not to deliver the product in numerous circumstances?” It can be incompatible with the term in the contract which forbids the existence of a contract until the goods are dispatched. If the buyer has completed his performance by selecting the available product and subsequently bargained by submitting the payment in compliance with the trader’s terms and conditions evidently established that the agreement is done. The intention to enter into an agreement is evident from the activities of the parties using the website and the creation of that contract should not be nullified by a term indicating that a contract can come into existence at a unique time.

Hence, the rights and justifiable expectations of consumers must be protected if “Contract on Dispatch” term is added into the company’s policy. There must be a proposed guarantee to the customer that their product will get delivered at the said time until and unless an unforeseen situation arises. A proper framework must be initiated so that the consumer can recover the purchase price in case their goods are not delivered by the company in prescribed time period.


[1] Online shopping and consumers – the impact of ‘contract on dispatch’ terms by Trish O’Sullivan*