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By Vanessa Irenuma


E-commerce in Nigeria has experienced significant growth in recent years, driven by factors such as increased internet penetration, the proliferation of smartphones, and a growing middle class with disposable income. Online contracts are a crucial aspect of e-commerce, as they govern the terms and conditions of transactions conducted over the internet. Let\’s discuss e-commerce and online contracts in Nigeria:

E-commerce in Nigeria:

1. Market Growth: Nigeria\’s e-commerce sector has witnessed substantial growth, with both local and international e-commerce platforms entering the market. Some popular Nigerian e-commerce platforms include Jumia, Konga, PayPorte, and many others. Nigeria is the 40th largest market for e-commerce with a predicted revenue of US$6,653.5 million in 2023, placing it ahead of Egypt. Revenue is expected to show a compound annual growth rate[CAGR 2023-2027] of 10.8%, resulting in a projected market volume of US$10,026.9 million by 2027. with an expected increase of 14.6% this year, The Nigeria e-commerce market contributed to the worldwide growth rate of 9.6% in 2023. the online share refers to the proportion of the retail volume that is transacted via the internet. It include purchase via desktop pc, tablet or smartphone, both via website or app. Only retail of physical goods is taken into account. In Nigeria retail market, the online share is 1.6% and will decreased by an average of 0.95% to 1.6% by 2027.

2. Mobile Commerce: Nigeria has a high mobile phone penetration rate, and many consumers access e-commerce platforms through mobile devices. This has led to the rise of mobile commerce or m-commerce in the country. More Nigerians are utilizing their gadgets to make online buys with the ascent of cell phone and other cell phone. As per the national communication commission [NCC], 89% of web clients make buy on the web, with one more 24%wanting to do as such sooner rather than later.

3. Payment Systems: Payment infrastructure has improved with the introduction of various online payment methods and digital wallets. Popular payment methods include debit/credit cards, bank transfers, USSD codes, and mobile money. The payment system of e-commerce in Nigeria has evolved significantly in recent years to accommodate the growing digital economy. Several factors have contributed to the development of payment systems in Nigeria\’s e-commerce sector, including increased internet penetration, improved financial infrastructure, and the adoption of mobile technology. Here\’s a detailed discussion of the payment system of e-commerce in Nigeria:

1. Credit Cards: Debit and credit cards, such as Visa, Mastercard, and local Nigerian cards, are widely accepted on e-commerce platforms. Many online shoppers prefer card payments due to their convenience and security.

2. Bank Transfers: Bank transfers are a common method of payment in Nigeria\’s e-commerce sector. Customers can make payments directly from their bank accounts to the seller\’s account. Some e-commerce platforms offer instant bank transfers for seamless transactions.

3. Mobile Money: Mobile money services, such as MTN Mobile Money, Airtel Money, and 9Mobile\’s 9Pay, are popular among consumers who do not have traditional bank accounts. These services allow users to store and transfer money using their mobile phones.

4. USSD Codes: Unstructured Supplementary Service Data (USSD) codes are widely used for mobile payments in Nigeria. Customers can access their bank accounts and make transactions by dialing specific USSD codes on their mobile phones. This method is accessible even on basic mobile phones.

5. Digital Wallets: Some e-commerce platforms and financial institutions offer digital wallets that users can fund and use for online transactions. Examples include Paga, Flutterwave\’s Barter, and Opay\’s Owallet.

4. LOGISTICS Challenges: Despite the growth, logistical challenges such as unreliable postal services, inadequate transportation infrastructure, and security concerns can affect e-commerce operations. Companies have been developing innovative ways to address these challenges, including building their own logistics networks. Logistics challenges in e-commerce in Nigeria present significant obstacles to the growth and efficiency of the industry. While e-commerce has grown rapidly in the country, logistics-related issues can hinder the seamless delivery of products to customers. Here\’s a discussion of some of the key logistics challenges in e-commerce in Nigeria.

1.     Poor Transportation Infrastructure: Nigeria faces issues with inadequate road networks, which can lead to delays and increased transportation costs for e-commerce businesses. Many roads are poorly maintained, leading to longer delivery times and potential damage to goods in transit.

2.     Last-Mile Delivery Challenges: The \”last mile\” of delivery, from a distribution center to the customer\’s doorstep, can be particularly problematic in Nigeria. Inefficient addressing systems, limited access to certain areas, and congested urban areas can make last-mile delivery a logistical headache.

3.     Traffic Congestion; Major Nigerian cities, like Lagos and Abuja, often experience heavy traffic congestion. This congestion can lead to delays in delivering packages, increased fuel costs, and difficulties in scheduling deliveries.

4.     Security Concerns: Theft and security concerns are prevalent, both in transit and during last-mile deliveries. E-commerce companies need to implement robust security measures to protect their shipments.


6. Formation of Online Contracts: In Nigeria, online contracts are governed by contract law, and they are legally binding if certain conditions are met. These conditions include offer and acceptance, intention to create legal relations, certainty of terms, and the capacity of parties involved. It is primarily knowledge that there is generally no specific form in which a contract maybe entered into. The court succinctly put it this was; ‘it is elementary law that a contract maybe demonstrated by the conduct of the parties as well as by their words and deeds or by the document that have passed between them’’. Thus a contract may be entered into either orally, in writing or indeed by conduct. By extension, a contract may also be brought into existence electronically by online communication, a process which we call online contract. An online contract has been define as ‘’…a contract created wholly or in part through communications over computer network.’’ examples are contracts entered into by email, through websites, via electronic data interchange etc. contracts maybe formed online where the parties exchange emails which consist of an offer and acceptance. it is also possible for the ingredients of the contract to be partly by exchange of emails or other forms of electronic communication, paper document, faxes and oral discussions, phone calls and text message etc contract may also be formed via websites and similar online services. Online contract can also be possibly formed where an electronic content is offered online and a user downloads such content, a contract then comes into being without a formal agreement. Again, online contract can be entered or made not just via electronic mails or correspondence but also by electronic communication on electronic platforms such as online instant messaging application such as Whatsapp, Facebook, etc.

a)     Offer and acceptance in online contract: online contract like most other contract may be either unilateral [contract of adhesion] or bilateral. The contract is unilateral when it is a non negotiated agreement entered into electronically and is actually a proposed contract that becomes binding if assent is obtained. Majority of online contract are of this nature and are therefore contracts of adhesion as the buyer often does not possess any bargaining power over the terms and condition put up by the seller and the former is caged into a situation of take-it-or-leave-it. A bilateral contract is one where the parties negotiate and may be entered into either online or offline. Acceptance in an online contract may be in any form which shows that the offeree has clearly and unequivocally accepted the term of the offer. This may be done or effected offline by written or oral communications as well as by conduct. Acceptance is also effective online by email, or other form of electronic message, and by conduct such as clicking on a button or downloading content. In online contract there is no other option to contract except by communication through the internet. There is some controversy as to the validity of some offer and acceptance by computers in situation where there is no human involvement because of the issues of existence of contractual intention which is raised. State Farm Mutual Auto Ins. Co. V. Bockhurst the court held that the computer operates only in accordance with the information and directions supplied by its programmers. this means that there is human intention to create legal relation in the computer transactions.

The provision of Section 153[2] Of The Evidence Act 2011 is worth nothing to the effect that an email is presumed correct as fed into the sender’s computer for transmission but there is no presumption that it has been received or that its contents were exactly as fed into the computer by the sender. Where an offer or acceptance is sent by email, actual receipt in exact form sent is required for a contract to result.

b)    Clickwrap and Browsewrap Agreements: Websites may include \”clickwrap\” agreements where users must explicitly click \”I agree\” to terms and conditions before proceeding with a purchase. \”Browsewrap\” agreements, on the other hand, rely on users\’ implied acceptance of terms through website use. Courts have examined the enforceability of these agreements.

c)     Consumer Protection: The Federal Competition And Consumer Protection Act,2018 [FCCPA] to promote and protect the interest of consumers over all product and services. Many jurisdictions have consumer protection laws that require businesses to provide clear and transparent contract terms. This includes disclosing key terms such as pricing, return policies, and cancellation rights.

d)    Electronic Signatures: Laws such as the Electronic Signatures in Global and National Commerce Act (ESIGN) in the United States and the eIDAS Regulation in the European Union recognize electronic signatures as legally binding. These laws facilitate the use of electronic contracts in e-commerce. There is no specified format for e-signatures under Nigeria law. However, under Section 93 [3]of the Evidence Act, an e-signature is defined as being used when the person has executed a symbol or security procedures to verify the authorship of an electronic record.

Under Section 93 Of The Evidence Act 2011, where a rule of evidence requires or provides certain consequences if a document is not signed, an electronic signature satisfies that rule of law or avoids those consequences. In addition, under Section 17[1] Of The Cybercrime Act 2015, electronic signatures are binding in purchases of goods and other commercial transactions.


e-commerce and online contracts are a rapidly evolving area of commercial law. The legal Framework governing online transactions continues to adapt to the changing landscape of digital commerce, balancing the interests of businesses, consumers, and regulatory authorities. Legal professionals and businesses engaged in e-commerce must stay informed about the evolving legal requirements and best practices to ensure compliance and mitigate legal risks.


Contact: Vanessa Irenuma

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