LEGAL CHALLENGES TO THE FORMATION AND

FORMALITIES OF ONLINE CONTRACTS IN KENYA

Bernard Kibet Sang*

Abstract

This study looks into the formation as well as formalities of contracts over
the internet in Kenya. In particular, it explores the challenges that the inter-
net poses as to the formation and, where applicable, formalities of online
contracts in Kenya.

As to formation, this study focuses on the essential elements of invitation

to treat, offer and acceptance in contracting online. Regarding formalities
of contract, it assesses the requirement for writing and signature in certain
transactions that may be concluded online.

The study also seeks to establish how Kenyan law addresses the legal
challenges arising from contracting online. In doing so, a comparison is
done with other jurisdictions, in particular, the United Nations (UN), United
Kingdom (UK), United States of America (USA) and South Africa (SA).

In conclusion, this study gives a summary of the findings and makes rec-
ommendations on the way forward.

Keywords: Online Contracts, Internet Contracts, Electronic Contracts,

Electronic Signatures.

*LL.M-UoN, Dip-KSL, LL.B-MU, Tutorial Fellow-MU, Advocate of the High Court of

Kenya, Commissioner for Oaths, Notary Public, Tax Agent, Patent Agent, Senior Partner at Sang
Chambers and Partners, Advocates, Nairobi.

African Journal of Commercial Law 1 (2019/2020) 97-124

 Bernard Kibet Sang

1.0 Introduction

The starting point regarding the law applicable to contracts in Kenya is

the Law of Contracts Act.1 According to the Act, English Common Law of
Contract, as modified by doctrines of Equity and Acts of Parliament of the
United Kingdom, is applicable in Kenya.2 Therefore, to know where to find
the law on formation and formalities of contracts, applicable in Kenya, one
has to look at the English Common Law, which is found in judicial decisions.3
In order to form a contract, parties must first reach an agreement.4 The
agreement is reached when one party (offeror) gives an offer that is accepted
by the party receiving the offer (offeree). In addition to the agreement, there
must be intention to create legal relations, and consideration. In short, for
there to be a contract, the essential elements of offer, acceptance, capacity,
intention to create legal intentions, and consideration, need to be there.
However, regarding online contracting, and as this study discusses in the next
heading, it is the elements of offer, as distinguished from invitation to treat,
and acceptance, that are affected by online contracting, and which shall be
interrogated in this paper.
On formalities, the general rule is that no formality is required to
contract.5 Hence, contracts can be made informally, in that, no writing or other
form is required.6 However, there are statutory exceptions that require that
certain contracts must be made or evidenced in writing and even signed, for
the same to be valid.7 Examples are contracts for disposition of interests in
land and contracts of guarantee, which must be made in writing and signed by
the parties.8

1
Cap 23, Laws of Kenya.
2
Ibid, section 2.
3
Common Law is the body of law deriving from judicial decisions, rather than statutes or
constitutions (BA Garner, ‘Black’s Law Dictionary’ (8th edition Thomson West) 293.
4
HG Beale ‘Chitty on Contracts, General Principles’ (13th edition, Volume 1, Sweet & Max-
well) 143.
5
McKendrick, ‘Contract Law, Text Cases and Materials’ (4th edition, OUP 2010) 99.
6
Beale (n 4) 379.
7
McKendrick (n 5) 27.
8
Cap 23 (n 1), section 3(3).

~ 98 ~
 Legal Challenges to the Formation and Formalities of Online Contracts in Kenya....

Further, the Land Registration Act9 prescribes that every instrument

effecting any disposition of land shall be executed by each party consenting
to it.10 The execution is by way of appending a person’s signature or affixing
the thumbprint or other mark as evidence of personal acceptance of that
instrument.11 Disposition is defined to include an agreement to sell land,
whereas instrument includes any writing that affects legal or equitable
rights.12 This means that a land sale agreement is an instrument that is used
for disposition of land. The land sale agreement must, therefore, be signed
by the parties consenting to the sale. It goes without saying that only written
agreements can be signed.
“Writing” and expressions referring to writing are defined to include
printing, photography, lithography, typewriting and any other modes of
representing or reproducing words in visible form.13 On the other hand, to
“sign”, in relation to a contract, is defined to include the making of one’s
mark or writing one’s name or initials on the instrument as an indication that
one intends to bind himself to the contents of the instrument.14 As this paper
discusses in heading 2, the challenge arises as to how to satisfy this formalities
while contracting online.

2.0 Challenges to the Formation and Formalities of Online Contracts

in Kenya

2.1.0 Formation of Online Contracts

As observed by Marco van der Merwe, online offer and acceptance is not
a simple matter by any means.15 The reasons are because the rules pertaining
to offer and acceptance for defined contracts are complicated and the current
rules originated at a time when modern forms of contracting were a far-off
glimmer on the horizon. Merwe is of the view that these rules have to be

9
No 3 of 2012.
10
Ibid, section 44(1).
11
Ibid, section 44(2).
12
Ibid, section 2.
13
Interpretation and General Provisions Act (Cap 2, Laws of Kenya), Section 3(1).
14
Section 3(6) (n 1).
15
Marco van der Merwe, ‘Internet Contracts’abvalable at [Link]
law/cybertext/[Link], accessed on 05 January 2016.

~ 99 ~
 Bernard Kibet Sang

adapted to accommodate newer forms of communication which include

internet communications.
It is important to ascertain when an offer, as distinguished from an
invitation to treat, has been made in respect of online contracts. This is
because, as stated, an offer is made with the intention, actual or apparent,
that it is to become binding as soon as it is accepted by the person to whom
it is addressed.16 On the other hand, an invitation to treat is not made with the
intention that it shall be binding if the addressee assents to its terms.17 It is,
therefore, necessary to distinguish online offers from invitations to treat.
Usually, the display of goods in a shop window, would amount to an
invitation to treat, as opposed to an offer.18 This is because the customer would
have to pick the goods and head to the pay counter and make an offer to buy
the same. The shop will accept his or her offer whereupon the customer will
pay for the goods. There can, however, be uncertainty over whether the display
of goods over an internet website constitutes an invitation to treat or an offer.
This is more so in a situation where the seller has limited stock of goods to
dispatch or where the seller is prepared to sell to a limited class of persons.
It is also necessary to differentiate between an offer and acceptance for
online contracts. This is because an offer that has not been accepted cannot give
rise to a binding contract.19 So, what does the act of clicking on the ‘OK’ icon
on a website amount to?20 Does it constitute acceptance of an offer to provide
a service or a customer’s offer to contract? Should it be taken as an offer, then
no contract will have been formed. However, should the same be taken as an
acceptance, then assuming that there was consideration and intention to create
legal relations, then a binding contract will be formed.
While there have been no reported cases in Kenya, there have been
incidences of display of wrong prices on the UK’s [Link] website.
[Link] was once shut down over lunchtime following a rush of orders
for pocket computers selling at £ 7.32, instead of the usual price of £ 192.21

16
Beale (n 4)148.
17
Ibid, 144.
18
GHJ Smith, ‘Internet Law and Regulation’ (4th edition, Sweet and Maxwell, 2007) 811.
19
A Grubb, ‘The Law of Contract’ (2nd edition Lexis Nexis Butterworths, 2003) 415.
20
Lovells, ‘E-Finance: Law and Regulation: Contracting on-line’ (Lexis Nexis).
21
Haggart G, ‘ “Mistakes, I’ve made a few…”:Another e-tailer gaff,’ LNB News of 21 March
2003 41 (Lexis Nexis).

~ 100 ~
 Legal Challenges to the Formation and Formalities of Online Contracts in Kenya....

In this case, customers received immediate and automatic confirmation of

their “purchases” by e-mail, and soon thereafter, the site was pulled down
and the product withdrawn. There has been no consensus as to whether or not
binding contracts arose in that context. This article takes the view that once
the confirmation e-mail was received, there was acceptance of the customer’s
offer, and as such [Link] was bound to supply the products at the
displayed price, no matter how unrealistically low the prices were.
Amazon’s position was that its online Terms and Conditions state that
there is no legal contract to sell to customers until Amazon sends them an
e-mail confirmation that the item has been dispatched. No claim was, however,
brought against Amazon and, as such, the court’s view in such a situation
is still not ascertainable. Were a similar situation to arise in Kenya, and in
particular where there are no Terms and Conditions similar to that of Amazon,
what would be the legal position?
Knowing the time that the contract was concluded is of paramount
importance because this is when contractual obligations and rights are deemed
to arise. Therefore, what time is an online contract concluded? Is it the time of
receipt or of sending the acceptance? When is an online order deemed to have
been placed?22 Is it when it is received or when it is accepted? Is it when it
enters a computer network or when it is drawn to the attention of a particular
person designated as the recipient? What if the seller is on holiday and the
email orders were not checked? How about if there is insufficient stock and
the customer was not warned about delays?
There are views that because of the borderless nature of the internet, more
often than not, online contracts are international transactions.23 This view is
not accurate given that there are numerous transactions that are concluded over
the internet within the domestic borders. Nonetheless, the place of contract
formation is of interest to international transactions. In the absence of express
provisions by the parties or applicable international convention, how is the
place of formation of the contract determined?

22
Jacobson Consulting Pty Ltd, ‘Online Contracts: How to Make Ecommerce Work’, avail-
able at [Link], accessed on 05 January, 2017.
23
Ibid.

~ 101 ~
 Bernard Kibet Sang

Further, regarding the place of contract formation, the international

element is complicated in cases involving corporate transactions where the
computer of the offering company that first receives a reply may be located
in one jurisdiction. The reply may then be transmitted automatically to a
subsidiary or holding company located in a different jurisdiction. Therefore,
the question that arises is, is the contract formed where the acceptance is sent,
where it is received at the place of re-transmittance, where it is received at its
last destination, or where it reaches the mind of the offeror?
In electronic contracting, the so called ‘shrink wrap’, ‘click wrap’ and
‘browse wrap’ contracts have raised fundamental questions about assent or
acceptance.24 Firstly, in a ‘shrink wrap’ contract, for example, when purchasing
off-the-shelf software, when the purchased product is received, it comes with
additional terms and conditions in the packaging or in the accompanying
documentation. Secondly, in a ‘click-wrap’, the purchaser is required to click
“I agree” before the transaction will continue, the installation will proceed or
the user will gain access to the web site. Thirdly, in the ‘browse wrap’ contract,
the user will visit the pages of a website where terms and conditions are posted
that purport to bind anyone who uses the website or its services. But what
types of conduct constitute assent or acceptance to terms and conditions. In
particular reference to ‘’shrink wrap’ contracts, how should one treat the terms
that are not proposed or disclosed until after the user has already agreed to go
forward with the transaction and has tendered the required consideration?
As stated, it is a general rule that for acceptance to be valid, it must be
communicated to the offeror, unless the need for communication is waived by
the offeror.25 Thus, communication is key to acceptance of an offer. As such,
when is acceptance deemed to have been effectively communicated over the
internet? Should there be an application of the rule regarding instantaneous
communication, so that receipt or deemed receipt by the offeror is key? On
the other hand, should the “postal rule” be applied, so that the dispatch of the
accepting e-mail or response form is effective?

24
Amelia H. Boss, ‘Electronic Contracting: Legal Problem or Legal Solution?’ available at
[Link] accessed on 05 January, 2017.
25
McKendrick (n 5) 99.

~ 102 ~
 Legal Challenges to the Formation and Formalities of Online Contracts in Kenya....

2.2.0 Formalities of Online Contracts

The general rule is that no formality is required to contract.26 There are,

however, statutory exceptions that require that certain contracts must be made
or evidenced in writing and even signed, for the same to be valid.
‘Writing’ has been defined to include printing, photography, lithography,
typewriting and any other modes of representing or reproducing words in
visible form.27 There is no doubt that in traditional paper-based contracting,
‘writing’ can easily be carried out on a piece of paper. The issue that arises is
whether online contracts can amount to written contracts. Would it be written
contracts because the definition of ‘writing’ includes any other modes of or
representing words in a visible form?
In traditional contracting, a party will simply indicate his or her assent
to the terms of the contract by affixing his or her signature to a piece of paper.
As defined ‘signature’ entails the making of one’s mark or writing one’s name
or initial on the instrument as an indication that one intends to bind himself or
herself to the contents of the instrument.28
How then would the requirement for signature be fulfilled in respect of
online contracts? Would it be sufficient that someone made a mark or typed
out his or her name or initials at the bottom of the e-mail or contract? But, this
would not be as unique as a handwritten signature that seeks to distinguish
the signature as that of the person signing. Besides, the making of a mark or
typing out of one’s name or initials in online contracts can easily be challenged
as having been forged. This is so because, unlike where a pen is used to create
one’s signature on a paper, there is nothing unique or authentic about just
typing a mark or initials on online documents- it can be easily done by an
impostor. Therefore, the courts would not place a lot of weight on this kind of
online signing as compared with the traditional paper-based signature that is
usually unique.

26
S Fafinski & E Finch, ‘Contract Law’ (2nd edition Pearson and Company Limited, 2010)
34.
27
Cap 2 (n13), section 3(1).
28
Cap 23 (n1), section 3(6).

~ 103 ~
 Bernard Kibet Sang

3.0 The Law on Formation and Formalities of Online Contracts in

Kenya

The relevant legislations regarding electronic transactions in Kenya

are the Kenya Information and Communications Act (KICA)29 as well the
Evidence Act.30 The preamble to the KICA provides that one of the overall
objectives of the Act is to facilitate the development of electronic commerce,
which in this case is carried out by online contracting.31 Under KICA, the
Communications Authority of Kenya (CAK) is bestowed with responsibility
of promoting electronic transactions.
KICA states that the functions of CAK in relation to electronic
transactions are to: (a) ensure use of reliable electronic records with a view
of facilitating electronic transactions; (b) eliminate barriers to electronic
commerce, for example, those relating to uncertainties over writing and
signature requirements, with a view of facilitating electronic commerce; (c)
promote confidence in the public about the integrity and reliability of electronic
records and transactions; (d) foster the development of electronic commerce
through the use of electronic signatures; (e) promote efficient public sector
services by use of reliable electronic records; and (f) develop frameworks for
minimisation of forged electronic records and fraud in electronic commerce
and transactions.32
Part VII of the Evidence Act addresses the issue of admissibility and
proof of electronic records in judicial proceedings. According to the Act,
electronic records are admissible in evidence, as long certain conditions are
fulfilled.33

29
Cap 411 A, Laws of Kenya.
30
Cap 80, Laws of Kenya.
31
The Preamble reads:
An Act of Parliament to provide for the establishment of the Communications Commission
of Kenya, to facilitate the development of the information and communications sector (in-
cluding broadcasting, multimedia, telecommunications and postal services) and electronic
commerce to provide for the transfer of the functions, powers, assets and liabilities of the
Kenya Posts and Telecommunication Corporation to the Commission, the Telcom Kenya
Limited and the Postal Corporation of Kenya, and for connected purposes (emphasis mine).
Section 2 of KICA defines ‘electronic’ to mean relating to technology having electrical, digital,
magnetic, wireless, optical, electromagnetic, or similar capabilities.
32
Cap 411A (n 29), section 83C.
33
Cap 80 (n 30), section 106 B.

~ 104 ~
 Legal Challenges to the Formation and Formalities of Online Contracts in Kenya....

It is, therefore, apparent that KICA and Evidence Act have the objective
of promoting electronic commerce. This study shall, however, examine if this
objective has been adequately provided for in the Acts.

3.1.0 Formation of Online Contracts

Regarding formation and validity of contracts, KICA states that unless

otherwise provided by the parties, offer and acceptance may be expressed
by means of electronic messages.34 Further, that contract shall not be denied
validity and enforceability solely on the ground that it was created by use of
electronic message(s).
Yes, KICA does recognise electronic offers and acceptance. That is not
a big deal though. The big deal is with the manner in which the internet can
complicate the applicability of the traditional rules on contract formation.
Firstly, KICA does not make an attempt to distinguish between an offer
and invitation to treat, when it comes to display of goods on a website. It
could be said that the same has been left to interpretation using the usual
contractual rules. However, the traditional rules of interpretation of contracts
cannot be suitable for online shopping. This is because, in the physical world,
a customer picks the goods displayed on the shop window and heads to the
counter to make an offer to buy the goods. If the shopkeeper accepts his or her
offer, he or she will accept the customer’s payment in exchange for the goods.
On the other hand, in online shopping, there is no opportunity to appear
before the shopkeeper. On clicking the ‘OK’ icon and paying for the goods
by electronic means, the deal is as good as done. What happens if, because
websites can be viewed by many people at the same time, there are numerous
‘purchases’ by customers, upon which there is no sufficient stock? These
are matters that should be legislated on. Thus, given the peculiar nature of
online shopping, there should be a substantive legislation to the effect that
display of goods on a website amounts to an invitation to treat so that when the
customer clicks the ‘OK’ icon, he or she will be making an offer. Should there
be sufficient stock, the seller will accept the offer by dispatching or alerting the
customer to collect the goods. In cases of insufficient stock, the seller will not
be liable for matters that are beyond his or her control, but should then refund

34
Cap 411A (n 29), section 83 J.

~ 105 ~
 Bernard Kibet Sang

the payments or restock his or her shop at the discretion of the customer who
should otherwise be refunded for any payments made.
Secondly, KICA does not specify the place of contract formation. This is
key, particularly regarding the jurisdiction that governs the contract, where no
express specification is made. Is it at the place of sending or receipt of accept-
ance? Since electronic communications are instantaneous, and that receipt is
key to communication of acceptance, it should be substantively provided that
it is the place of receipt that is the place of contract formation. There is no need
of leaving it to judicial interpretation when there is no harm in specifying.
KICA also attempts to address the issue of communication of offer or
acceptance in electronic transactions. It states that, unless otherwise agreed,
acknowledgement of receipt may be given by any communication, automated
or otherwise, by the addressee; or by any conduct of the addressee sufficient
to indicate to the originator that the electronic communication has been
received.35
Further, where stipulated by the originator that electronic record shall only
be binding on receipt of acknowledgement of such electronic record, then the
electronic record shall be deemed to have never been sent by the originator,
unless such acknowledgment has been received.36 Where not stipulated, and
no acknowledgment has been received, the originator may give notice to the
addressee stating that no acknowledgement has been received and specifying a
reasonable time for receipt of the acknowledgment, non-compliance of which
entitles him or her to treat the electronic record as having not been sent.37
It is difficult to relate the above provision to a communication of
acceptance in a contract situation. The provision is couched in a manner that
is not specific to contract formation, but general electronic communication.
Nonetheless, it appears, KICA does not prescribe the rule that is applicable to
electronic communication in contract formation. It neither states that the rule
regarding instantaneous communication nor postal rule is applicable. It leaves
it open to freedom of contract, so that a party may choose to stipulate that an
electronic record is only binding on him or her upon receipt. The party may as
well not stipulate as such, but then is at liberty to notify the other party that he

35
Ibid, section 83M (1).
36
Ibid, section 83 M (2).
37
Ibid, section 83 M (3).

~ 106 ~
 Legal Challenges to the Formation and Formalities of Online Contracts in Kenya....

must receive the electronic communication within a reasonable time if he or she

is to be bound. There is need for certainty. Because electronic communications
are instantaneous, the rule regarding instantaneous communication should
be applicable so that it is only upon receipt of the communication that the
recipient is bound. It would even be appropriate if a provision in this regard
is made with specific reference to electronic contracting and even endorsed in
the Law of Contract Act.
The legal issues raised by the so called ‘shrink wrap’ contracts have not
been addressed by KICA. As stated, in a ‘shrink wrap’ contract, for exam-
ple, when purchasing off-the-shelf software, when the purchased product is
received, it comes with additional terms and conditions in the packaging or
in the accompanying documentation.38 Should there be legal recognition of
terms that are not proposed or disclosed until after the user has already agreed
to go forward with the transaction and has tendered the required considera-
tion? Terms that one has not been given an opportunity to scrutinise before
making a purchase should not be legally binding on the customer. Thus, an
online purchaser should be able to read the terms of the transaction before
proceeding to do the purchase. These terms should be clearly stipulated to
avoid uncertainty.

3.2.0 Formalities in Online Contracts

While giving powers to the Cabinet Secretary to prescribe otherwise,

KICA does not apply to any rule or law that requires writing or signatures in:
(a) the making of a will; (b) negotiable instruments; and (c) title documents.
So far, no regulations to the contrary have been made by the Cabinet Secretary,
and as such electronic transacting is not legally recognised for the mentioned
items. This appears to go against the objective of the KICA, that is, promotion
of electronic commerce by eliminating barriers resulting from requirements
for writing and signature.39 In any case, about seven years after the enactment
of the legislation, the Cabinet Secretary ought to have made appropriate
regulations.40

38
Boss (n 24).
39
Cap 411A (n 29), section 83 C (b).
40
The amendment to KICA was made in 2009 vide Kenya Communications (Amendment)
Act, No 1 of 2009.

~ 107 ~
 Bernard Kibet Sang

Nonetheless, KICA goes on to stipulate that where any law provides that
information or any matter shall be in writing, then, such requirement shall
be deemed to have been satisfied if such information or matter is: (a) made
available in electronic form; and (b) accessible for use later.41 On the face of it,
any legal requirement for writing shall be satisfied if a document is produced
in an electronic form as in the case of online contracts. This may also boost
the argument that creation of documents online amounts to representations
of words in visible form and, thus, meets the definition of what ‘writing’ is.42
However, as stated, KICA has ruled out the application of electronic
writing or signature in respect of wills, negotiable instruments and documents
of title, thus, diminishing the importance of recognition that electronic
representation of words amount to writing. Further, ‘writing’ usually goes
along with the requirement for signing. So, even if electronic contracts are
recognised as being written contracts, how will the accompanying requirement
for ‘signature’ be satisfied?
KICA allows the use of advanced electronic signature to be affixed in a
manner prescribed by the Cabinet Secretary, upon which any legal requirement
for authentication using a signature shall be deemed to have been satisfied.43
According to KICA, an advanced electronic signature means an electronic
signature which: (a) is linked to the signatory in a unique way; (b) can identify
the signatory; (c) is created by means that the signatory can maintain under his
sole control; and (d) is linked to the data to which it relates and in such a way
that any change to the data is detectable.44
Similarly, the exemption of wills, negotiable instruments and documents
of title to the applicability of the Act, negates the attempt by KICA to satisfy
any legal requirement for ‘signature’ by use of advanced electronic signature
in online contracts. Further, as stated, the advanced electronic signature should
be affixed in the manner prescribed by the Cabinet Secretary.45 The Minister
ought to make regulations prescribing the manner of affixing the advanced
electronic signature. This has not happened so far, rendering this provision
unimplementable. But why was this left to the Cabinet Secretary? The manner

41
Cap 411A (n 29), section 83 G.
42
Cap 2 (n 13).
43
Cap 411A (n29), Section 83O(1) and 83P.
44
Ibid, section 2.
45
Ibid, section 83P.

~ 108 ~
 Legal Challenges to the Formation and Formalities of Online Contracts in Kenya....

of affixing the signature is rather obvious. The same is affixed after the writing
in a manner that indicates one’s intention to be bound.
There also seems to be some unnecessary duplication that creates some
variation in what amounts to an advanced electronic signature. Whereas
section 2 of KICA defines what an advanced electronic signature is, section
83(0) prescribes the requirements that a reliable advanced electronic signature
must meet. As stated, section 2 of KICA defines an advanced electronic
signature to mean an electronic signature which, (a) is linked to the signatory
in a unique way; (b) can identify the signatory; (c) is created by means that
the signatory can maintain under his sole control; and (d) is linked to the data
to which it relates and in such a way that any change to the data is detectable.
On other hand, section 83(0) provides that a reliable advanced electronic
signature must, (a) be generated through a signature-creation device; (b) be
created by data that is solely linked to the signatory; (c) be created by data that
is under the sole control of the signatory; (d) enable detection of subsequent
alterations to the signature; and (e) enable detection of subsequent alteration
of information that the signature relates to. Whereas, it may be assumed that
an advanced electronic signature is generated by a signature-creation device, it
would be appropriate to state so in section 2 of the Act, just as stated in section
83(0). Otherwise, it would have been sufficient to make the definition of an
advanced electronic signature in section 2 of the Act, only, without giving a
further definition in section 83(0).
In what appears to have been lack of clarity in the minds of the drafters, the
legislation goes on to give discretion to the Cabinet Secretary, in consultation
with CAK, to make regulations for electronic signatures.46 Does it now mean
that there is a distinction between the advanced electronic signature and the
electronic signatures anticipated? Why are there separate provisions for the
advanced electronic signatures, from those of electronic signatures, and yet the
advanced electronic signature is a form of electronic signature? In any case,
these regulations have not been made by the Cabinet Secretary, rendering the
use of electronic signatures non-operational.

46
Ibid, section 83R.

~ 109 ~
 Bernard Kibet Sang

The Evidence Act provides that, other than in a case of a secure signature,
there must be proof that an electronic signature is that of the subscriber.47 In
order to prove this, the court may direct that the person or the certification
service provider produces the electronic signature certificate or that any other
person applies the procedure stipulated in the electronic signature certificate
to verify the electronic signature purported to have been affixed by that
person.48 Firstly, what is this secure signature that must not be proved in court?
Secondly, are there certification service providers in Kenya?
The Evidence Act does not prescribe what amounts to a secure signature.
Further, the electronic signatures, including the advanced electronic signatures,
anticipated by KICA, are meant to be secure. What then is this unsecure
electronic signature that needs proof? Is it an electronic signature that is not
produced by a signature-generating device, like typing out ones names after
the text? There is need for clarity on this.
Certification services providers in Kenya are supposed to be licensed by
CAK.49 KICA defines “certification service provider” to mean a person who has
been granted a licence, by CAK, to issue a digital signature certificate.50 Now,
‘digital signature’ has been introduced. Is it the same as an electronic signature,
or a form of an electronic signature? This is a form of electronic signature since
the word ‘electronic’ includes digital capabilities.51 Therefore, does it mean
the certification service providers cannot issue certificates for other forms of
electronic signatures? They should be able to. This needs to be clarified. It can
be said that in so far as there are no licensed certification service providers in
Kenya, the evidential value of electronic signatures is still in limbo.
In summary, whereas Kenyan law has given legal recognition to online
written offers and acceptance, the same has not adequately addressed the
complications that internet poses to the application of the traditional rules of
contract formation. This is particularly so in respect of the distinction between
offer and invitation to treat for display of goods on websites; the applicable
rule regarding communication of acceptance; the place of contract formation;
and the issues raised by the so called ‘shrink wrap’ contracts.

47
Cap 80 (n 30), section 106C.
48
Ibid, section 10 D.
49
Cap 411A (n 29), section 83E.
50
Ibid, section 2.
51
Ibid.

~ 110 ~
 Legal Challenges to the Formation and Formalities of Online Contracts in Kenya....

Further, in as much as Kenyan law recognises online written contracts, the

accompanying requirement for signature can still not be achieved legally. This
is because of the lack of regulations as well as certification service providers
to facilitate the implementation of the provisions on electronic signatures.

4.0 Comparative Analysis

This section is dedicated to comparing the Kenyan situation with those

of the UN Commission on International Trade Law (UNCITRAL), the United
Kingdom (UK), the United States of America (US) and South Africa (SA).
UNCITRAL is a body of the UN specialising in commercial law reform
worldwide, and comes up with model laws to be adopted by member states.52
The UNCITRAL texts that are relevant to formation of electronic contracts
are: the 2005 UN Convention on the Use of Electronic Communications
in International Contracts (the Convention on e-Communications); and
the 1996 UNCITRAL Model Law on Electronic Commerce with Guide to
Enactment, with additional article 5 bis as adopted in 1998 (the Model Law on
e-Commerce).53 Though UNCITRAL laws are concerned with international
trade, they are relevant in the sense that online transacting is the key form of
carrying out international trade because of its speed and low cost.
The UK, US, and SA have taken steps to address the problems and
challenges raised in this study. Thus, the UK Electronic Communications Act
2000 (UK e-Communications Act) and Electronic Signatures Regulations
2002 (UK e-Signatures Regulations), are relevant to this study. The US has
enacted the Uniform Electronic Transactions Act (UETA). South Africa has
legislated on electronic transactions through the Electronic Communications
and Transactions Act, 2002 (SA e-Communications Act).

52
UNCITRAL,‘About UNCITRAL’, available at [Link]
[Link], accessed on 05 January, 2017. UNICTRAL is the UN system in the field of international
trade law. It is a body with worldwide membership specializing in commercial law reform worldwide
for over 40 years. It’s business is the modernisation and harmonisation of rules on international busi-
ness.
53
UNCITRAL, ‘Electronic Commerce’ available at [Link]
ral_texts/electronic_commerce.html, accessed on 05 January, 2017.

~ 111 ~
 Bernard Kibet Sang

4.1.0 Formation of Online Contracts

[Link] Invitation to Treat, Offer and Acceptance

According to the Convention on e-Communications,54 “communication”
means any statement, declaration, demand, notice or request, which includes
an offer and the acceptance of an offer that the parties are required to make
in connection with the formation or performance of a contract.55 There is no
equivalent definition in the Kenyan situation. KICA does not define what
communication is. It is necessary for KICA to define that communication
includes the making of offers and acceptance in order to make it clear that
electronic communications also covers the formation of online contracts.
Unlike the UK e-Communications Act, UETA, SA e-Communications
Act, and KICA, the Convention on e-Communications has gone ahead to
distinguish between invitation to treat, and offers or acceptance in respect of
electronic transactions. It states as follows:
A proposal to conclude a contract made through one or more electronic
communications which is not addressed to one or more specific parties, but is
generally accessible to parties making use of information systems, including
proposals that make use of interactive applications for the placement of orders
through such information systems, is to be considered as an invitation to make
offers, unless it clearly indicates the intention of the party making the proposal
to be bound in case of acceptance.56

Going by the Convention, the display of goods on a website amounts to

an invitation to treat, unless otherwise stated by the owner of the site. This
creates certainty and there is no reason why Kenya should not borrow from it.

[Link] Time and Place of Contract Formation

Unlike the Kenyan situation, the Convention on e-Communications,
the Model Law on e-Commerce, UETA, and the SA e-Communications Act,
set rules on how to determine the time and place of dispatch and receipt of

54
The Convention on e-Communications applies to the use of electronic communications in
connection with the formation of contracts between parties whose places of business are in different
States (see Article 1). However, given the borderless nature of online transacting, the convention
serves as a good guide to formation of online contracts in Kenya.
55
2005 Convention on the Use of Electronic Communications in International Contracts, Ar-
ticle 4 (1).
56
Ibid, article 11.

~ 112 ~
 Legal Challenges to the Formation and Formalities of Online Contracts in Kenya....

electronic communication, which includes communication of offers and

acceptances. Accordingly, the time of dispatch of an electronic communication
is deemed to be the time when the communication leaves an information
system under the control of the originator57 or of the party who sent it on
behalf of the originator.58 If the electronic communication has not left an
information system under the control of the originator or of the party who
sent it on behalf of the originator, the time of dispatch is the time when the
electronic communication is received.59
The Convention on e-Communications provides that the time of receipt
of an electronic communication is the time when it becomes capable of being
retrieved by the addressee at an electronic address designated by the addressee.60
Further, that an electronic communication is presumed to be capable of being
retrieved by the addressee when it reaches the addressee’s electronic address.61
This has been reflected in the Model Law on e-Commerce and UETA.62
The SA e-Communications Act provides that an agreement concluded
between parties by means of data messages is concluded at the time when
the acceptance of the offer was received by the offeror.63 So is it when it
reaches the address of the recipient or when the recipient actually opens and
reads the message? What happens if the recipient actually reads the message
and keeps quiet? The Convention on e-Communications and Model Law on
e-Commerce, give clearer provisions in that they state that the time of receipt
of the message is when the same is capable of being retrieved by the recipient.
Regarding acknowledgment of receipt, the KICA and SA e-Communi-
cations Act have similarities with that of the Model Law on e-Commerce.

57
Article 4(d) of the Convention on e-Communications as well as Article 2 (c) of the Model
Law on e-Commerce define “originator” of an electronic communication to mean a party by whom,
or on whose behalf, the electronic communication has been sent or generated prior to storage, if any,
but it does not include a party acting as an intermediary with respect to that electronic communica-
tion.
58
Article 10(1) of the Convention on e-Communications, Article 15(1) of the Model Law on
e-Commerce, and Section 15 a(1) of UETA.
59
2005 UN Convention on e-Communications (n 55), Article 10 (1).
60
Article 10(2). Further, Article 4(e) of the convention defines “addressee” of an electronic
communication means a party who is intended by the originator to receive the electronic communica-
tion, but does not include a party acting as an intermediary with respect to that electronic communica-
tion.
61
2005 UN Convention on e-Communications (n 55), Article 10 (2).
62
Article 15 (2) & (3) of the Model Law on e-Commerce and Section 15 b (1) of UETA.
63
SA e-Communications Act, section 22 (2).

~ 113 ~
 Bernard Kibet Sang

This is because they provide that, unless otherwise agreed, acknowledgement

of receipt may be given by any communication, automated or otherwise, by
the addressee; or by any conduct of the addressee sufficient to indicate to the
originator that the electronic communication has been received.64 However,
KICA and the Model Law on e-Commerce, go on to state that where stipulated
by the originator that electronic record, or data message, shall only be binding
on receipt of acknowledgement of such electronic record, then the electronic
record shall be deemed to have never been sent by the originator, unless such
acknowledgment has been received.65 Where not stipulated, and no acknowl-
edgment has been received, the originator may give notice to the addressee
stating that no acknowledgement has been received and specifying a reasona-
ble time for receipt of the acknowledgment, non-compliance of which entitles
him or her to treat the electronic record as having not been sent.66
However, unlike KICA, the Model Law of e-Commerce provides
that where the acknowledgement of receipt by the addressee is received
by the originator, there is a presumption that the related data message was
received by the addressee.67 However, this presumption does not imply that
the data message corresponds to the message received.68 This is because the
communication sent by the originator may be corrupted on receipt by the
addressee, and as such the addresses should not be bound by information that
is not the same as that sent by the originator. This is an important provision
that should not have been left out in KICA.
It seems the Convention on e-Communications, the Model Law
on e-Commerce, UETA and the SA e-Communications Act, rule out the
applicability of postal rule to electronic communication of offers and
acceptances. This is because they lay emphasis on receipt of the communication,
in an apparent recognition that electronic communications are instantaneous.
Therefore, the rule regarding instantaneous communication is applicable and
should be specified in KICA.

64
Section 83M (1) of KICA, article 14(2) of the Model Law on e-Commerce, and section 26
(2) of the SA e-Communications Act.
65
Section 83M (2) of KICA and article 14(3) of the Model Law on e-Commerce.
66
Section 83M (3) of KICA and article 14(4) of the Model Law on e-Commerce.
67
Model Law on e-Commerce, article 14(5).
68
Ibid.

~ 114 ~
 Legal Challenges to the Formation and Formalities of Online Contracts in Kenya....

According to the Convention on e-Communications, the Model Law of

e-Commerce, UETA and the SA e-Communications Act, the place of dispatch
of the electronic communication is at the originator’s place of business,
whereas the place of receipt is the addressee’s place of business.69 ‘Place
of business’ is presumed to be the location indicated by that party, unless
otherwise demonstrated; and where not indicated, and a party has more than
one place of business, then the place of business is that which has the closest
relationship to the relevant contract, having regard to the circumstances known
to or contemplated by the parties at any time before or at the conclusion of the
contract.70 Further, if a natural person does not have a place of business, his or
her place of business is his or her habitual residence.71
Unlike the Convention on e-Communications, Model Law on
e-Commerce, UETA, and KICA, the SA e-Communications Act has gone
ahead to specify the place of contract formation. The SA e-Communications
Act provides that an agreement concluded between parties by means of data
messages is concluded at the place where the acceptance of the offer was
received by the offeror.72 KICA should make such a clarification.

[Link] The ‘Shrink Wrap’ Contracts

Just like in Kenya, these other jurisdictions have not addressed the
legal issues raised by the so called ‘shrink wrap’ contracts. As stated, in a
‘shrink wrap’ contract, when the purchased product is received, it comes with
additional terms and conditions in the packaging or in the accompanying
documentation.73 Should there be legal recognition of terms that are not
proposed or disclosed until after the user has already agreed to go forward
with the transaction and has tendered the required consideration. Terms that

69
Article 10 (3) of the Convention on e-Communications, Article 15 (4) of the Model Law on
e-Commerce, Section 15 d of UETA and Section 231(c) of the SA e-Communications Act. According
to Article 6 (4) of the Convention on e-Communications, a location is not a place of business merely
because that is: (a) where equipment and technology supporting an information system used by a
party in connection with the formation of a contract are located; or (b) where the information system
may be accessed by other parties. Article 6(5) states that the sole fact that a party makes use of a do-
main name or electronic mail address connected to a specific country does not create a presumption
that its place of business is located in that country.
70
2005 UN Convention on e-Communications (n 55), article 10 (3).
71
Ibid.
72
SA e-Communications Act (n 63).
73
Boss (n 24).

~ 115 ~
 Bernard Kibet Sang

one has not been given an opportunity to scrutinise before making a purchase
should not be legally binding on the customer.

4.2.0 Formalities of Online Contracts

[Link] Requirement for ‘Writing’

Regarding the requirement for ‘writing’, the Convention on e-Communi-
cations provides that the requirement is met by an electronic communication
if the information contained therein is accessible so as to be usable for subse-
quent reference.74 The Model Law on e-Commerce has reflected this position
by stating that a requirement for ‘writing’ can be fulfilled by a data message75
if the information contained therein is accessible so as to be usable for subse-
quent reference.76
Whereas the UK e-Communications Act and Regulations are silent on
this, the UETA and SA e-Communications Act also have provisions to the effect
that the requirement for writing is met if information is produced in electronic
form that is available for subsequent use or retention by the recipient.77 All
these are similar to the Kenyan situation, where KICA provides that where
any law provides that information or any matter shall be in writing, then, such
requirement shall be deemed to have been satisfied if such information or
matter is, (a) made available in electronic form; and (b) accessible for use
later.78 On the face of it, there is no doubt that the requirement for ‘writing’ has
adequately been recognised by law. How about the accompanying requirement
for ‘signature’?

[Link] Requirement for ‘Signature’

When it comes to the requirement for signature, the e-Communications
Convention, the Model Law on e-Commerce, and the Model Law on
e-Signature stipulate that the requirement is met in relation to an electronic
communication if: a method is used to identify the party and to indicate that

74
SA e-Communications Act (n 63), article 9(2).
75
Article 2(a) of the Convention on e-Communications defines ‘data message’ to mean infor-
mation generated, sent, received or stored by electronic, optical or similar means including, but not
limited to, electronic data interchange (EDI), electronic mail, telegram, telex or telecopy.
76
SA e-Communications Act (n 63), article 6 (1).
77
Section 12 (1) of the SA e-Communications Act, and Section 7(c) & 8(a) of UETA.
78
KICA, section 83G.

~ 116 ~
 Legal Challenges to the Formation and Formalities of Online Contracts in Kenya....

party’s intention in respect of the information contained in the electronic

communication; and the method used is either as reliable as appropriate for the
purpose of the electronic communication, and proven in fact to have fulfilled
the functions of identifying the party and indicating his or her intentions.79
It is apparent that the Convention and the model laws do not make it
mandatory that there be a signature. Instead, if the purpose for which a signature
is required, is fulfilled in other ways, then the requirement for signature should
be deemed to have been met. The convention seems to make it flexible and
easy for parties to fulfil the requirement for signature, unlike in the Kenyan
situation which requires that there be an electronic signature.80 Signature is
the most appropriate way of authenticating and identifying a document to a
person. Therefore, there ought to be use of electronic signature that satisfies
the purpose for which a signature is a requirement, that is, identifying a party
and his or her intentions to be bound by the information.
The Model Law on e-Signature, as well as KICA provide that an
electronic signature is considered to be reliable for the purpose of identifying
a party and his or her intention, if the signature creation data is solely linked to
the signatory; the signature creation data were at the control of the signatory,
and no one else; any alteration to the signature is detectable; and that any
alteration made to information, which the signature relates to, after the time of
signing, is detectable.81
The UK e-Communications Act provides that an electronic signature
related to an electronic communication is admissible as evidence as to the
authenticity of the communication.82 This just gives legal effect to electronic
signatures. There is nothing that Kenya can borrow from this since electronic
signatures are already recognised by KICA.
UETA provides that an electronic signature can fulfil the requirement
for signature.83 It defines ‘electronic signature’ to mean an electronic sound,

79
Article 9(3) of the Convention on e-Communications, Article 7 of the Model Law on e-
Commerce, and article 6(1) of the Model Law on e-Signature.
80
Section 83O(1) and 83P of KICA allow the use of advanced electronic signature to be af-
fixed in a manner prescribed by the Cabinet Secretary, upon which any legal requirement for authen-
tication using a signature shall be deemed to have been satisfied.
81
Article 6(3) of the Model Law on e-Signature and section 83O(3) of KICA.
82
UK e-Communications Act, section 7.
83
UETA, section 7(d).

~ 117 ~
 Bernard Kibet Sang

symbol, or process attached to or logically associated with a record and

executed or adopted by a person with the intent to sign the record.84 This is a
wide and flexible definition because it includes the use of sound and process
as e-signatures. According to UETA, the electronic signature is attributable
to the person if it was the act of the person, which act may be shown in any
manner, including showing of the efficacy of any security procedure applied
to determine the person to which the electronic record or electronic signature
was attributable.85
The SA e-Communications Act provides that in situations where the
law requires a signature, but does not specify the type of signature, such a
requirement is satisfied with respect to data message only if an advanced
electronic data message is used.86 Otherwise, other types of electronic
signatures may be used.87 However, these electronic signatures must satisfy
the purpose of identifying the signatory and signifying his approval of the
information.88 Unlike for the Model Law on e-Signature, KICA, and UETA,
the SA e-Communications Act does not, unfortunately, elaborate on what
will enable an e-signature satisfy the purpose of identifying the signatory and
indicating his or her intention to be bound.
Whereas KICA has some similar provisions with the Model Law on
e-signature, UETA, UK e-Communications Act, and the SA e-communications
Act, there are no regulations to facilitate the implementation of the law
(KICA). The regulations should be made by the Cabinet Secretary.
One cannot talk of e-signatures without mentioning certification service
providers. According to the Model Law on e-signature, a certification service
provider is a person that issues certificates and may provide other services
related to electronic signatures.89 Therefore, a certification service provider
would provide the software or platform for creation of electronic signatures
and thereafter issue certificates for the same, if called upon to. An example of
such service provider is the US based Right Signature LLC which provides
a platform for creation of online-signatures and issues accompanying

84
Ibid, section 2 (8).
85
Ibid, section 9.
86
SA e-Communications Act (n 63), Section 13 (1).
87
Ibid, section 33 (2).
88
Ibid, section 33 (3).
89
Model Law on e-Signature, article 2(e).

~ 118 ~
 Legal Challenges to the Formation and Formalities of Online Contracts in Kenya....

certificates.90
The Kenyan definition of what a certification service provider is, limits
the function of such a service provider to only issuing certificates for digital
signatures. KICA defines a certification service provider to mean a person who
has been licensed to issue a digital signature certificate.91 Firstly, this means
that a service provider cannot be licensed to provide e-signature creation
services. Who then can provide such important services that need regulation?
Secondly, why has KICA restricted the definition to ‘digital signatures’ only?
Is a digital signature the same as an electronic signature, or a form of an
electronic signature? Digital signatures must be taken as a form of electronic
signature since the word ‘electronic’ includes digital capabilities.92 Therefore,
does it mean the certification service providers cannot issue certificates for
other forms of electronic signatures? They should be able to. There is need
for an amendment of this definition to allow certification service providers
to issue electronic signature certificates and also perform other electronic
signature services including those of e-signatures creation.
The UK e-signature Regulations set out the rules that electronic
signature certificates must meet.93 The Regulations also list the requirements
that certification service providers must meet before being licensed to
perform electronic signatures services.94 The regulation of electronic
signatures certifications in these ways is important to guarantee the integrity
of e-signatures. The Kenyan Cabinet Secretary, who is yet to make such rules,
can borrow from the UK experience.

5.0 Conclusion and Recommendations

This paper has shown that Kenya has made some steps in legislating
on electronic commerce, which is facilitated by online contracting. This
legislation is contained in the Kenya Information and Communications

90
RightSignature LLC ‘About Us’ available at [Link] accessed on
05 January, 2017.
91
KICA (n 78), section 2.
92
Ibid, section 2.
93
UK e-Signature Regulations, Schedule 1.
94
Ibid, Schedule 2.

~ 119 ~
 Bernard Kibet Sang

Act (KICA)95 and the Evidence Act.96 However, the legislation has some
shortcomings on formation and formalities of contracts, which may hinder the
overall objective of promotion and facilitation of e-Commerce. This section
provides recommendations for reform.

5.1.0 Formation of Online Contracts

[Link] Invitation to Treat, Offer and Acceptance

Electronic communication is an aspect that distinguishes online
contracting from the traditional paper-based ones. Offers and acceptances
would, therefore, have to be communicated using electronic means. It is,
therefore, necessary to define communication to include the making of offers
and acceptances with a view of entering into contracts. This paper, proposes
that KICA borrows from the Convention on e-Communications,97 which
defines “communication” to mean any statement, declaration, demand, notice
or request, which includes an offer and the acceptance of an offer that the
parties are required to make in connection with the formation or performance
of a contract.98 This will make it clear that electronic communications also
apply to formation of online contracts.
KICA does not distinguish between invitations to treat and offers, in
respect to online contracting. This is more so when it comes to the display of
goods on a website. This study proposes that KICA be amended to distinguish
between electronic invitation to treat and offer, as is the case in the Convention
on e-Communications discussed in this article.99 By doing so, there shall be no
doubt that the display of goods on a website amounts to an invitation to treat,
unless otherwise stated by the owner of the site.

95
Cap 411A (n 29).
96
Cap 80 (n 30).
97
The Convention on e-Communications applies to the use of electronic communications in
connection with the formation of contracts between parties whose places of business are in different
States (see Article 1). However, given the borderless nature of online transacting, the convention
serves as a good guide to formation of online contracts in Kenya.
98
2005 UN Convention on e-Communications (n 55), article 4 (1).
99
Ibid, article 11.

~ 120 ~
 Legal Challenges to the Formation and Formalities of Online Contracts in Kenya....

[Link] Time and Place of Contract Formation

The time and place of contract formation is necessary to ascertain
when and where contractual obligations arise. KICA does not set rules on
how to determine the time and place of dispatch and receipt of electronic
communication, which include communication of offers and acceptances. KICA
can borrow from the Convention on e-Communications, 1996 - UNCITRAL
Model Law on Electronic Commerce with Guide to Enactment, with additional
article 5 bis as adopted in 1998, the UETA, and SA e-Communications Act.
Accordingly, the time of dispatch of an electronic communication should
be deemed to be the time when the communication leaves an information
system under the control of the originator100 or of the party who sent it on
behalf of the originator.101 If the electronic communication has not left an
information system under the control of the originator or of the party who
sent it on behalf of the originator, the time of dispatch is the time when the
electronic communication is received.102
The time of receipt of an electronic communication would be the
time when it becomes capable of being retrieved by the addressee at an
electronic address designated by the addressee.103 Further, that an electronic
communication should be presumed to be capable of being retrieved by the
addressee when it reaches the addressee’s electronic address.104
KICA should also state that where the acknowledgement of receipt by the
addressee is received by the originator, there is a presumption that the related
data message was received by the addressee.105 However, the presumption

100
Article 4(d) of the Convention on e-Communications as well as article 2 (c) of the Model
Law on e-Commerce define “originator” of an electronic communication to mean a party by whom,
or on whose behalf, the electronic communication has been sent or generated prior to storage, if any,
but it does not include a party acting as an intermediary with respect to that electronic communica-
tion.
101
Article 10(1) of the Convention on e-Communications, article 15(1) of the Model Law on
e-Commerce, and section 15 a(1) of UETA.
102
2005 UN Convention on e-Communications (n 55), article 10 (1).
103
Article 10(2). Further, article 4(e) of the convention defines “addressee” of an electronic
communication means a party who is intended by the originator to receive the electronic communica-
tion, but does not include a party acting as an intermediary with respect to that electronic communica-
tion.
104
2005 UN Convention on e-Communications (n 55), article 10 (2).
105
Ibid, article 14 (5).

~ 121 ~
 Bernard Kibet Sang

should not imply that the data message corresponds to the message received.106
This is because the communication sent by the originator may be corrupted on
receipt by the addressee, and, as such, the addresses should not be bound by
information that is not same as that sent by the originator.
It is clear that the rule that should apply to electronic transactions is that
regarding instantaneous communication, as opposed to the postal rule. This is
because electronic communications are instantaneous. It follows that the time
of online contract formation should be the time when the acceptance of the
offer is received by the offeror.107
The place of dispatch of the electronic communication would be at
the originator’s place of business, and the place of receipt would be the
addressee’s place of business.108 ‘Place of business’ will be presumed to be
the location indicated by that party, unless otherwise demonstrated; and where
not indicated, and a party has more than one place of business, then the place
of business should be that which has the closest relationship to the relevant
contract, having regard to the circumstances known to or contemplated by the
parties at any time before or at the conclusion of the contract.109 Further, if a
natural person does not have a place of business, his or her place of business
should be his or her habitual residence.110
The rule regarding instantaneous communication also determines the
place of contract formation. Thus, online contracts should be deemed to be
concluded at the place where the acceptance of the offer was received by the
offeror.111

106
Ibid.
107
SA e-Communications Act (n 63), section 22 (2).
108
Article 10 (3) of the Convention on e-Communications, article 15 (4) of the Model Law on
e-Commerce, Section 15 d of UETA and Section 231(c) of the SA e-Communications Act. According
to article 6 (4) of the Convention on e-Communications, a location is not a place of business merely
because that is: (a) where equipment and technology supporting an information system used by a
party in connection with the formation of a contract are located; or (b) where the information system
may be accessed by other parties. Article 6(5) states that the sole fact that a party makes use of a do-
main name or electronic mail address connected to a specific country does not create a presumption
that its place of business is located in that country.
109
2005 UN Convention on e-Communications (n 55), article 10 (3).
110
Ibid.
111
SA e-Communications Act (n 63), section 22 (2).

~ 122 ~
 Legal Challenges to the Formation and Formalities of Online Contracts in Kenya....

[Link] The ‘Shrink Wrap’ Contracts

As stated, in a ‘shrink wrap’ contract,112 the issue that arises is whether
there should be legal recognition of terms that are not proposed or disclosed
until after the user has already agreed to go forward with the transaction and has
tendered the required consideration. This paper proposes that the law should
make it clear that terms that one has not been given an opportunity to scrutinise
before making a purchase should not be legally binding on him or her.

5.2.0 Formalities of Online Contracts

[Link] Requirement for ‘Writing’

Kenyan law makes it clear that a legal requirement for ‘writing’ can be
satisfied by electronic contracting. KICA provides that where any law provides
that information or any matter shall be in writing, then, such requirement shall
be deemed to have been satisfied if such information or matter is, (a) made
available in electronic form; and (b) accessible for use later.113 On the face
of it, there is no doubt that the requirement for ‘writing’ has adequately been
recognised by law. However, issues arise as to the accompanying requirement
for ‘signature’.

[Link] Requirement for ‘Signature’

When it comes to the requirement for signature, KICA provides that the
same can be satisfied by use of an advanced electronic signature which is as
reliable as was appropriate for the purpose for which the electronic message
was generated or communicated.114 An electronic signature is considered to
be reliable for the purpose for which the electronic message was created, if:
the signature is generated through a signature-creation device; the signature
creation data are solely linked to the signatory; the signature creation data were
under the control of the signatory and no one else; any subsequent alteration to
the electronic signature is detectable; and any subsequent alteration made to
the information, to which the signature relates, is detectable.115

112
Boss (n24).
113
Cap 411A (n29).
114
Ibid, section 83O(1).
115
Ibid, section 83O(3).

~ 123 ~
 Bernard Kibet Sang

KICA can also be as wide and flexible as possible, like UETA which
defines e-signatures to include sound and process. UETA defines ‘electronic
signature’ to mean an electronic sound, symbol, or process attached to or
logically associated with a record and executed or adopted by a person with
the intent to sign the record.116
Whereas KICA has provisions with respect to e-signatures, there are
no regulations to facilitate the implementation of the same. The regulations
should be urgently made by the Cabinet Secretary.
The meaning and function of certification service providers are not
adequately provided for in KICA. KICA’s definition of a certification service
provider limits the function of such a service provider to only issuing certificates
for digital signatures. It defines a certification service provider to mean a
person who has been licensed to issue a digital signature certificate.117There is
need for amendment of KICA to allow certification service providers to issue
electronic signature certificates and also perform other electronic signature
services including those of e-signatures creation.
The UK e-signature Regulations set out the rules that electronic signature
certificates must meet.118 The Regulations also list the requirements that
certification service providers must meet before being licensed to perform
electronic signatures services.119 The regulation of electronic signatures
certifications in these ways is important to guarantee the integrity of
e-signatures. The Kenyan Cabinet Secretary, while making the regulation on
e-signatures, can get important tips from the UK experience.

116
UETA, section 2(8).
117
Cap 411A (n29), section 2.
118
UK e-Signature Regulations, Schedule 1.
119
Ibid, Schedule 2.

~ 124 ~