Parties’ legal capacity in electronic commerce transactions

The aim of this article is to scrutinise the uncertainty of the Iranian Electronic Commerce Law (IRI ECL 2004) provisions especially on the issue of capacity of parties. Issues of parties’ legal capacity have been resolved in traditional contracts but they are still debatable in electronic commerce transactions. Under UK law, contracts formed by minors for things other than necessities are unenforceable against the minor but enforceable against the merchant (seller) while according to US uniform commercial code in online contracts capacity is not recognized as a legal excuse to nullify a contract. At the mean time, contracts made by incapacitate person is considered null under Iranian law. In spite of technical developments such as digital signatures and smart cards used in verifying the identity and capacity of parties in electronic commerce transactions, the legal certainty on capacity of parties is still questionable. The article also examines the application of traditional contract general rules on parties’ legal capacity in Iran to electronic commerce with reference to EU law. The EU law which is already at an advance stage serves a guide for future development of e-commerce law in Iran.     

The application of the Khiyar al-‘Aib (option of defect) principle in on-line contracts and consumer rights

This paper scrutinises the legal protection of consumer rights in on-line contracts through the application of Khiyar al-??Aib (option of defect). Khiyar al-??Aib is a legal Islamic mechanism by which, one party, both parties or even a third party can nullify a contract, electronically or conventionally. Khiyar (option) means the authority to nullify a contract and Aib means defect. In fact, it is a right given to the purchaser to cancel the contract if he discovers that the object acquired has defect that diminishes its value. In on-line contracts, the consumer has no direct contact with the merchant and cannot easily verify the quality of the goods, thus creating a situation in which contracting parties are not at equal bargaining strength. Therefore, application of Khiyar al-??Aib (option of defect) would be helpful in protecting consumer rights in the virtual world. This paper explores the Islamic principles by taking Iranian laws as well as the European law as a point of reference.