The main objective of this study is to examine legal challenges associated with formation of electronic contract in line with the adequacy of the Tanzania Law of Contract Act in as far as formation of electronic contracts is concerned. The leading question is the extent to which the Tanzanian Laws governing contracts can accommodate the legal challenges surrounding electronic contracts. This study is a qualitative study which is based on review of existing literatures and laws in order to answer the research question as to whether the Tanzania Law of Contract Act is adequate to cover the legal challenges associated with electronic Contracts. The findings of this study revealed that the Tanzania Law of Contract Act CAP 345 R.E 2002 is not adequate to regulate both electronic and paper based contracts. The study recommends that there is a need to make a new specific law to regulate the formation of electronic contracts separately from the paper based ones.