Legal Framework for the Regulation of E-Commerce and Online Commercial Transactions in Nigeria

Legal Framework for the Regulation of E-Commerce and Online Commercial Transactions in Nigeria

One of the main forces behind innovation and invention is the certainty of change and evolutionary growth in human existence. One of society’s accepted norms is the knowledge that existing methods and ways of doing things will eventually be supplanted by those that were previously unknown. In terms of business ties, this is also true. The ongoing development of business methods through time has led to the possibility of conducting business with a person who is thousands of miles distant in a Japanese metropolis from one’s living room, somewhere in Nigeria.

Globally, the increased use of technological innovations and developments in business has made a significant impact on commercial transactions. In Nigeria, the traditional methods for the sale of commodities evolved from the early stage of trade by barter, exchange of services and manpower for goods, to the use of money and/or legal tender for the purchase of goods in a geographically fixed market setting or a preferred shop offering in-person services. However, because it is in human nature to seek out better ways to conduct business and maintain business relationships, this evolution has progressed to the point where business may now be conducted entirely online with little to no in-person encounters.

By its nature, online commercial transactions, also referred to as electronic commerce, involves the purchase and sale of commodities, the exchange of services, and the payment of such commodities and services through the use of the internet and other electronic advances.[1] The popularity for this method of trade over traditional in-person commercial transactions grew during the COVID-19 pandemic and afterwards, has continued to wax stronger.

Being a fast growing mode of commercial relations, it is ideally expected that there ought to exist a comprehensive legal framework for its regulation. However, this is not the case as proposals to enact an Electronic Transactions Act for Nigeria have been continuously rejected by the legislature and an Electronic Transactions Bill has been under review and consideration by the legislature since 2019.

Accordingly, this article attempts an analysis of some of the various laws that indirectly and in some parts, directly contribute to the regulation of electronic commercial transactions in Nigeria. These laws include:

  1.  The Sale of Goods Act
  2. The CyberCrimes Act
  3. The Evidence Act

The Sale of Goods Act

Generally, the regulation of all forms of commercial transactions involving the exchange of goods and services falls within the ambit of the provisions of the Sale of Goods Act. However, considering that this is an Act enacted in 1895, and essentially is a creation of English Common Law, it is evident that the Act does not specifically capture the peculiarities of conducting commercial transactions online with the aid of the internet. Despite this consideration, it is argued that to the extent that online commercial transactions are contracts for the sale and purchase of goods and services, they are governed by the provisions of the Act in this regard.[2]

In light of this, the Act stipulates that a contract for the sale of goods is one in which the seller transfers or promises to transfer the buyer’s ownership of items in exchange for a monetary sum known as the price.[3] The Act continues by stating that, subject to its restrictions, such a sale agreement may be made in writing with or without a seal, orally through word of mouth, or partially orally and in writing, or it may be implied from the behaviour of the parties.[4] In relation to online commercial transactions, this typically occurs when a buyer selects a product from a vendor’s catalogue, places an order for the product and makes payment for the order upon acknowledgement and acceptance of the order by the vendor.

The provisions of Section 14 of the Act is particularly incidental in relation to e-commercial transactions due to the fact that most transactions of this nature involve heavy dependence on the seller’s description of the products. Essentially, the section provides that where the sale of goods is based on description, there is an implied condition that the goods will conform to such description. This provision forms the legal basis for the #what-i-ordered-vs-what-i-got campaigns on social media.

The CyberCrimes Act

The  CyberCrimes Act contains provisions aimed at curbing and punishing perpetrators of internet fraud in Nigeria. In relation to e-commerce in Nigeria, the Act is relevant to the extent that it regulates and provides penalties for instances of fraud and other trade vices in online commercial transactions. It is common practice to find online vendors misrepresenting the quality and nature of their products online and ripping buyers off by this act. Also, in some instances where buyers pay for the goods before delivery, some sellers disappear completely without making delivery of the products. In this light, section 14 of this Act expressly criminalises all forms of fraud and misrepresentation perpetrated online both in relation to e-commerce and otherwise.

The Evidence Act

Prior to the 2011 amendment of the Evidence Act, the validity of contracts, including commercial agreements, were repeatedly challenged in court. The argument was usually that the law as it was then did not recognize the validity of any contract or agreement entered into via the aid of technology, computers and the internet because there was no existing procedure for the recognition of electronically generated evidence. However, this controversy was put to rest by the provisions of Section 84 of the Evidence Act 2011, which contains extensive provisions for the recognition of electronically generated evidence in proof of the existence of an online commercial transaction.

The Electronic Transactions Bill

This Bill largely draws from the provisions of the UNCITRAL Model Law on E-commerce and contains extensive provisions directly tailored to address the peculiar validity concerns of electronic transactions as well as the cyber and data  protection considerations. The most essential addition of this Bill to the body of Nigerian laws is that if it is passed into law, its provisions will form a comprehensive legal framework for the regulation of e-commerce in Nigeria in a manner which is in tune with the current technological realities of the world.

Conclusion

Simply put, the regulation of online commercial transactions in Nigeria is focally determined by the provisions of the Sale of Goods Act which does not directly contain provisions that address the special rights of e-consumers and the duties of e-traders and other key considerations in e-commerce. This creates a situation where the law does not adequately provide for a method of commercial transaction that is increasingly at the forefront of commercial relations in the country. This is why it is recommended that, distinct from the provisions of the Sale of Goods Act, the Electronic Transactions Bill should be reviewed and finally passed into law.

 

[1] Andrew Bloomenthal, ‘E-commerce Defined: Types, History, and Examples’

<https://www.investopedia.com/terms/e/ecommerce>  accessed 9 February 2023.

 

[2] Muhammad Nuruddeen, ‘Legal Issues in Electronic Commerce: Challenges and Prospects for Nigeria’ [ResearchGate, August 2014] https://www.researchgate.net/publication/316736921_Legal_Issues_in_Electronic_Commerce_Challenges_and_Prospects_for_Nigeria  accessed 9 February 2023.

[3] Section 2, SGA.

[4] Section 4, SGA.

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