As business relationships develop in the new economy, the contracts documenting those relationships have to keep pace. Partly because of this, e-commerce specialists have emerged, to a greater or lesser extent, in almost all commercial law firms. But what relevance will e-commerce have to the contract lawyer once it becomes so routine that it becomes merely ‘commerce’ and once the ‘new economy’ grows up and loses its prefix?
Will there be any enduring change to the legal contractual environment, or will it just be a matter of having the old precedents updated occasionally, with some assistance from those obliging colleagues in the IP/IT department?
In the early stages of e-commerce, related contracts tended to be sent to the desks of media and technology lawyers. This was not surprising – traditional offline businesses suddenly found themselves dealing with content and technology contracts, an area that they had previously not had to contemplate.
The pervasiveness of e-commerce has meant that it has progressed beyond a niche activity. The issues raised by e-contracts now potentially impinge on almost every legal area.
The E-contract landscape
So what effect has the rise of e-commerce had on the contractual landscape? Some effects are obvious, others more subtle. It is often a matter of whether new technology has facilitated a new business model or merely provided a new route to market for an established business.
Where new business models have resulted, the effects are more dramatic. New categories of commercial contract are emerging, for example, application service provider agreements, portal tenancy agreements and web hosting agreements.
These may take building blocks from traditional agreements but with a significant shake-up. Even where online services are just a new route to market, e-contract issues arise as a result of the need to complete agreements online without compromising the usability of the website.
New business styles associated with e-commerce have also had a more subtle effect on contracts. Most of this is as a result of the compressed time frame of many
e-business deals. Rapidly changing technologies and short-term commercial relationships have had a knock-on effect on contracts. Where a contract may only be effective for a three-month period (and all a client’s emphasis is on building up a large network of suppliers and customers) there is no time for long negotiations, except for the most crucial agreements.
As a result, many contracts have to be built for speed – keeping the provisions short, reasonable and relatively even-handed in order to get a deal up and running as soon as possible. This need for speed can raise issues for the legal profession, most importantly how to embrace the new economy without sacrificing quality of advice. Where the demand for a rapid response outweighs the demand for a reasoned one, then there may be room for some client re-education.
