Every day, we are involved in electronic contracting either through the use of the Automated Teller Machine (ATM) to transact business or when we book our flight tickets online. These electronic transactions are mostly not directly covered by our legal regime.
The European Union in the year 2000, approved a directive on electronic commerce which required member-states to implement the same. The United Kingdom in 2000, passed the Electronic Communication Act, while South Africa passed the Electronic Communications and Transactions Act, 25 of 2002.
All the developed countries including Malaysia, China, India, Brazil, Singapore, Japan, etc have laws on electronic contact, and this results in a remarkable increase in their business transaction, but the reality in Nigeria is that there is seemingly a dearth or inadequacy of the extant laws which directly govern electronic transactions and hence, the vulnerability of online consumers.
The Nigerian Perspective
Under the current legislation in place in Nigeria, the security of our data or card (ATM) transactions is not specifically regulated by any Act of the National Assembly.
However, the Central Bank of Nigeria is impliedly empowered by the Central Bank of Nigeria Act 2007 to make regulations to facilitate these transactions and exercise its powers provided under section 28(1)(I).
That is, to issue guidelines for the maintenance of adequate and reasonable financial services for the public and to ensure high standards of conduct and management through the banking system.
The Central Bank of Nigeria implemented the guidelines on transactions switching services.
Rules 1.5 and 3.5 under the guidelines are to the effect that the consumer is liable for any fraud committed if he is in possession of the card (ATM) and has knowledge of the pin code. Contrarily, once the consumer reports any theft or loss of a card, he/she is automatically absolved of any liability for any future unauthorized transactions on that card.
Furthermore, if a fraudulent or unauthorized transaction can be traced to negligence or breach of contract of the issuer or merchant, then the consumer would not be liable. So if the consumer gets a notification that the transaction has been carried out on the applicant’ card, and the applicant reports it to your bank immediately and if any further transaction takes place after the report, it is not the consumer’s fault but the bank becomes liable and a remedy for this has been provided in section 7(3) of The Advance Free Fraud and other Related offence Act 2006 which provides:
“When as a result of negligence, or regulation in the internal control procedures, a financial institution fails to exercise due diligence as specified in the Banks and other Financial Institutions Act, 1991 as amended or the Money Laundering (prohibition) Act, 2004 in relation to the conduct of financial transactions which involve the proceed of lawful activity.
And subsection 3(a) of the above-cited section provides that:
“The financial institution commits an offense and is liable on conviction to refund the total amount involved in the financial transaction and not less than N100,000 sanctions by the appropriate financial regulatory authority.”
Furthermore, when a contract is made online and the website’s terms and condition states how long it will take for the goods to be delivered and the delivery exceeds the specified duration, the company is technically in breach of contract.
The consumer may refuse to take the delivery and request a refund, but where there is no stated time frame, this may lead to some uncertainties, the provision of section 29(2) of the Sales of Goods Act states that:
“Where under the contract of sale the seller is bound to send the goods to the buyer, but where no time for sending them is fixed, the seller is bound to send within a reasonable time”
The question is, what does reasonable time mean within this context? This issue is succinctly covered by the Jamaica Electronic Transaction Act 15 of 2006 which is stated in section 30(1) as follows:
“where an agreement is made for the supply of goods, services, or facilities, the supplier shall supply the goods, services, or facilities (as the case may require) within the specified time in the agreement or, if no time is so specified, within thirty days after the date on which the agreement is made
(1) where the supplier fails to supply the goods, services, or facilities (as the case may require) within the time required under subsection (1), the consumer may cancel the agreement seven days after giving the supplier notice of that intention-
(2) Where the supplier is unable to carry out the agreement because the goods, services, or facilities in question are unavailable, the supplier shall-
(a) Forthwith notify the consumer of the inability; and
(b) within thirty days after becoming aware of the inability, refund any payment made by, or on behalf of the consumer in respect of the goods, services, or facilities.
We often place orders for goods online, but upon delivery, we discover that those goods are substandard and faulty, this is because goods displayed online usually look nice.
What will happen if the consumer discovered that the goods supplied are not the same as his order? The provision of section 34 of the Sales of Goods Act is very clear on this point and it provides that:
“Where goods are delivered to the buyer, which he has not previously examined, he is not deemed to have accepted them unless and until he has had a reasonable opportunity of examining them to ascertain whether they conform with the contract.”
Furthermore, section 13 of the Sales of Goods Act also states that, where there is a contract for the sale of goods both by description as well as sample, there is an implied condition that the goods shall correspond with the sample and description.
Most online merchants have standard term contracts that are created to favour them and to the disadvantage of consumers. The consumer is left with a sort of fait accompli, to either accept any possible onerous terms which may be placed on him by the seller, who is clearly in a stronger bargaining position, or to back out of the transaction.
In Nigeria, consumer protection laws are not as robust as we would hope and expect them to be. It will not be wrong to say that there is virtually no exact statutory legal instrument that currently exists which would serve to protect the consumer from the harsh burden that extremely lopsided standard form contracts may place on them.
Some E-commerce companies in Nigeria have ruthless terms which have been termed “unconscionable contract” which in a nutshell, is a contract that is so one-sided and unfair to one party and therefore unenforceable under law.
In a lawsuit, if the court finds a contract to be unconscionable, such contract will be declare void.
Generally, the legal principle is ‘pacta sunt servanda’, which means contracts should be enforced. If someone voluntarily entered into a contract, he /she should be bound by it. Section 11 of the Consumer Protection Council Decree 1992 provides that:
“Any person who issues or aids in issuing any wrong advertisement about a consumer item is guilty of an offence and liable on conviction to a fine of N 50,000 or imprisonment of five years or both such fine and imprisonment.”
Section 8(1)(a) and (b) of the same Decree provides that whereupon an investigation by the council state committee of a complaint by a consumer, it is proved that the consumer’s right has been violated by way of trade, provision of services, supply of information or advertisement thereby causing injury or loss to the consumer, the consumer shall in addition to the redress which the state committee subject to the approval by the council may impose, have a right to a civil action for compensation or restitution in any competent court.
The need for the National Assembly to enact an enabling legal protection for online consumers cannot be overemphasized.
Online businesses would flourish and the data of the consumers would be safer and secured from fraudsters. Many people these days are afraid of E-commerce due to the realities and uncertainties posed by it in Nigeria and this hampers the growth of online transactions in Nigeria.
1. Sales of Goods Act 1893.
2-Central Bank of Nigeria Act 2007.
3-Advanced Fee Fraud and other Related offense Act 2006.
4-Banks and other Financial institutions Act 1991.
5- Money Laundering (prohibition) Act 2004.
6-Consumer protection Council Decree 1992.
7-Jamaica Electronic Transactions Act 15 of 2006.
Ibrahim Muhammad Usman is a 300-level pupil of law from Bayero University Kano, he is an ADR enthusiast and has an interest in legal research and litigation as well as research in Artificial intelligence and intellectual property law.
He has published several legal articles.