Business Law - Use of Contracts in E-commerce Assignment

Business Law - Use of Contracts in E-commerce - Assignment Example Business transaction costs can be reduced by low communication cost strategy. It can allow the organizations to focus on their core business activities (Lee, 1998, p.4). Moreover, organization can buy several external services through this cost reduction strategy. Frauds and opportunistic behaviour can take place in a strong long-term relationship between two different organizations. Supreme mutual trust can pose limited risk. Moreover, it will help the organizations to reduce their risk management costs. E-commerce involves synchronization between several organizations implementing effective communication technology. This synchronization can be attained in the form of a virtual enterprise or an electronic enterprise. Contracts play an important role in both these cases. In global electronic market, contracts are referred as the agreements on a particular business transaction. Contract can be considered as the collaboration agreement for a longer time period in a virtual enterprise. These cooperation agreements involve integrated business process. This integration can be attained in several ways but generally shared database and inter-organizational workflows are the major sources of this integrated business process. The study will discuss the use of several contracts in the e-commerce business. Content A contract can be defined as an agreement between several parties that is based on specific mutual commitments. One-sided commitment cannot be considered as a contract. Exchange of several goods and services between two or more than two parties can be termed as mutual commitment. In most general cases, one party provides services or goods and other party pays for those exchanged goods and services. Moreover, enforcement mechanism in places is highly essential in a contract. It ensures both identification and punishment of breaking a promise or commitment. As of now, every contract can be made through online in UK. Business transactions are generally divided into three successive phases, such as contract preparation, contract negotiation and contract fulfilment (Daskalopulu and Sergot, 1997, pp. 6-8). Contract preparation can be referred as the information phase. On the other hand, contract recognition can be referred as agreement phase. Contract fulfilment phase has limited negotiation activities. In this phase, several buyers select a specific product or service. It indicates that the buyers want to purchase that product or service. On the other hand, sellers deliver the product or services to the buyers after, before, or at the time of payment. This exchange process becomes more complicated in B2B process as the price of products or services may be not fixed. Moreover, the delivery process can become more difficult in several B2B processes as in International Trade. In these situations, the contracts are more elaborative in nature. These include several specifications in some fulfilment processes’ form (Chirku and Kauffman, 2000, pp.7-12). Moreover, these contracts help to indicate the disputes’ resolve process. Legal system is struggling due to rapid pace of e-commerce development. It is discussed earlier that mutual exchange of goods and services can be referred as contract. Written contract is the e-commerce legal tool. These contracts can