E-CONTRACTS IN INDIA

ABSTRACT

In today’s 21st century, the world is mostly dependent on technology/ internet sector, the person has a wide purpose to use the internet like for education, booking, entertainment, shopping, etc, technology has a great impact on society. 

Now even the contracts are made online for business purposes or any other purposes, for online contracts some legal issues arise for the formation of a contract, section 4of the Indian Contract Act, 1872 prevents these legal issues. 

Section 4 of the Indian Contract Act, 1872 states that there must be a communication between both the parties, i.e., Offeror and offeree for the formation of a contract, the communication of acceptance is completed when it comes to the knowledge of an offeree and offeree accepted the offer and sends back the document to offeror for completion of the contract.[1] 

The various types of technological processes used for the formation of a contract, are Telex, Fax, Internet, in these forms of instantaneous communication postal rule was not applicable, as they are the form of communication. But in Section 13 of the Information Technology Act, 2000 there is a provision which states that the time of receiving receipt is when the information sent to the resource which is not designated would be the one when it is retrieved by the addressee.[2] 

In today’s scenario, more and more contracts are being formed on a remotely-based system between the offeror and offeree with the help of the technology sector. A contract is formed when the offeree accepted the offer with a lawful object which is defined in Section 10 of the Indian Contract Act, 1872.

With the advent of technology, people start using electronic Internet Communication for the formation of contracts as they are more convenient, speedier than other forms of communication. Being an instantaneous form of communication receipt rule envisaged in Section 13[3] of the Indian Contract Act, 1872.

INTRODUCTION

With the emergence of technology in all over the world, people are widely using the internet for many purposes, now the communication can be done between the persons is possible with the help of internet which saves our time also consider as faster mode of communication, or effective communication, with the changes of time, the contracts are now formed online. These contracts are known as E-Contracts. 

E-contracts are contracts in which the acceptance, communication, revocation, of a valid contract are expressed through an electronic form with the help of the Internet or Cyber Space, these E-Contracts are similar to Hard Copy Paper Contract, all 8 essentials of valid contracts are also applicable on E-Contract. A customer drawing money from an ATM is an example of E-Contract. It is the most convenient method to enter into a contract without being physically exhausted.[4]

Section 10 of Information Technology Act, 2000 states that “Where in a contract formation, the communication of proposals, the acceptance of proposals, the revocation of proposals and acceptances, as the case may be, are expressed in electronic form or by means of an electronic record, such contract shall not be deemed to be unenforceable solely on the ground that such electronic form or means was used for that purpose.”[5]

For any contract to be valid for performance, the Consent and Signature from both the parties are required, and in e-contract, digital signature (electronically based) will be done which is defined under Section 2 (p)[6] of Information Technology Act, 2000.

PARTIES IN A E-CONTRACT

There are 2 main parties in an E-Contract are:

  • Originator
  • Addressee

Originator is a person, who generates an information, transmits the information, stores the information in an electronical manner, address is a person who received the such information in the form of electronical manner.

TYPES OF E-CONTRACTS

The 3 common kinds of E-Contracts are:

  • Browse Wrap Agreement: Through the usage of the website, an agreement is intended to be reached that will bind both parties to the contract. These kinds of contracts are typically employed by websites, and they stipulate that a user’s continuous use of a website constitutes acceptance of the website’s new terms of use and any other applicable rules.
  • Shrink Wrap Contract: Contract is a licencing agreement in which the terms and conditions of the contract are enforced onto the customer as soon as he opens the package. In this scenario, the consumer is required to comply with the terms and conditions of the contract. When purchasing software goods, you will typically come across these kinds of contracts. [Case in point] [Case in point] As soon as the customer opens the package, the user is protected from any copyright or intellectual property rights violations that the manufacturer may have committed by virtue of the licencing agreement.[7]
  • Click Wrap Agreement: The user is required to demonstrate his approval or assent to the terms and conditions regulating the licenced usage of the programme by clicking the “ok” or “I accept” button located on the dialogue box. This is a requirement of the agreement. The user has the option of clicking the cancel button or closing the window in order to express their disagreement with or rejection of the conditions. In the event of rejection, the user in question will be unable to purchase or make use of the service.[8] When conducting business online, installing software, or setting up an email account, users will frequently be required to agree to the terms of a contract of this nature. In the case of click wrap agreements, as opposed to shrink wrap agreements, where the terms of the agreement are concealed within the box, all of the terms and conditions are accessible prior to acceptance, either in the same window or through a hyperlink. Shrink wrap agreements are more commonly used.

In India, there are not Judicial precedents on the validity of a Shrink Wrap as well as Click Wrap Agreements, but in other countries, both are enforceable and do not violate the general principles of Contract Law.[9]

VALIDITY OF E-CONTRACTS

Oral contracts have been given recognition under the Indian Contract Act of 1872 alongside traditional agreements. This is provided that the oral contracts were made with the free consent of parties competent to contract, for a lawful consideration, and with a lawful object, and that they did not expressly declare themselves to be void. Therefore, the Indian Contract Act does not contain anything that limits the legality of enforcing electronic agreements if those agreements have necessary fulfilling the components of a legitimate contract.[10]

In accordance with Section 65-A of the Indian Evidence Act of 1872, the judicial systems in India are able to accept electronic documents. The Indian Evidence Act of 1872 has a provision in its Section 65-B that outlines the process that must be followed when submitting electronic documents as evidence.

According to Section 65-B of the Indian Evidence Act of 1872, any information contained in an electronic record produced by a computer in printed, stored, or copied form shall be deemed to be a document, and it may be admissible as evidence in any proceeding without further proof of the original. This provision applies to any information that may be contained in an electronic record produced by a computer. However, the acceptance of the same is contingent on a number of requirements that are outlined in section 65-B of the aforementioned act. It is required that the document or e-mail sought to be produced from a computer was in regular use by a person who had lawful control over the system at the time of producing it; that the document or the e-mail was stored or received during the ordinary course of activities; that the information was fed into the system on a regular basis; that the output computer was in a proper operating condition and has not affected the accuracy of the data entered.

CONCLUSION

It has been discovered that the laws that govern such e-contracts are hazy in nature, and they need to be dynamic in order to accept the present changing scenarios of e-commerce, which includes an e-contract. The mode of an e-contract is the product of a revolutionary change in the changing global technical know-hows.


[1] AVTAR SINGH, Contract and Specific Relief, EBC Stores, 12th ed. 2020.

[2] Universal’s Concise Commentary, The Information Technology Act, 2000, Universal Law Publishing, ISBN-10 9351439887.

[3] Indian Contract Act, Section 13, ‘Consent’.

[5] Nikhil Nair, E-Contract, Indian National Bar Association, https://www.indianbarassociation.org/e-contracts/

[6] Information Technology Act, 2000, Section 2 (p).

[7] JAIMALA CHAHANDE, An Analytical Study on E-contract: Its Legal Validity and Jurisdiction, INTERNATIONAL JOURNAL OF LAW MANAGEMENT & HUMANITIES [ISSN 2581-5369] Volume 3 | Issue 6 2020.

[8] Law Essay: Different Persons Definition of Contract: lawteacher.net: 4th January 2019

https://www.lawteacher.net/free-law-essays/contract-law/different-persons-definition-of-contract-contract-law-essay.php

[9] Ponneganti, Phanindranath & Nangru, Parth. (2020). E-Contracts and their relevance.

[10] Author, “Validity of E- Contract in India: An Overview”, International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.6, Issue 1, page no.14-16, January 2019.  

[4] Archana Balasubramanian, India: E-Contracts In India, mondaq, https://www.mondaq.com/india/contracts-and-commercial-law/1104590/e-contracts-in-india

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