Electronic commerce has been described as unique, in the opportunities it creates for economic growth and its potential to revolutionise the way business is done. Although initial expectations and predictions have proven rather optimistic, it must nevertheless be accepted that electronic commerce has firmly established its place in the economies of the United Kingdom and European Union. Although considerable work and discussion has surrounded the creation of a regulatory framework for electronic commerce, insufficient attention has been given to the most fundamental element - the legal regime applicable to electronic contracts. Electronic contracts form the basis of electronic commerce. Parties have been contracting electronically for some time. However, electronic contracts have unique qualities and attributes making them sufficiently `different' to contracts entered by more `traditional' means to raise questions of the applicability and appropriateness of existing legal principles. This work is an examination of the legal environment within which electronic contracts are made. If electronic commerce is to reach its economic potential there must be a stable and predictable legal environment for electronic contracts. In this thesis the existing common law and regulatory principles are analysed, in the context of electronic contracts, to examine whether their application has the potential to create a stable legal environment. It is argued that a combination of, uncertainty in the common law; dated concepts in regulatory measures; and the introduction of new regulation without sufficient consideration of the nature of the electronic environment, has resulted in a lack of clarity in the law applicable to electronic contracts