An Economic Analysis of Consumer Right Protection in E-Commerce: Testing Efficiency Using the Principles of Contract Law

Abstract

The internet is hailed as the virtual abode of men characterized by the ability for subjects to rule and be ruled simultaneously, with each individual being the custodian of this kingdom of wires and diodes. Recent technological advancement has enormously affected the internet and increased the number of users tremendously. While the ‘milk and honey’ provided by the convenience of the internet is enjoyable, it has also brought about certain discomfort to some people. E-commerce being one of the most beneficial aspects of the use of internet has, just like any other phenomenal sector of commerce, got its own setbacks. Previous literature has discussed different ways of dealing with consumer right protection which has been a major issue of discussion in this digital era. This paper attempts to review the various approaches proposed by existing literature and then suggest alternative remedy for consumer-merchant issues in E-commerce using an economic analysis in the context of contract law liability theory. It also devices a quantitative Risk-Benefit Analytic tool to be used by e-commerce platforms, regulators and courts in analyzing the risk involved in certain online transactions in the case where non-performance leads to the loss economic opportunity of a user.