E-CONTRACT

INTRODUCTION 

In recent times, the world of commerce has been extended to a much greater extent. From buying a food packet to satisfy our hunger to buying a huge sofa set, has become one of the necessary things of the time. Today, the world is so busy in their lives that they are lethargic to go to market and select their purchases. Hence, they simply download an app, choose the best quality product which suits their range with one click, add it to the cart and order it, at the comfort of their home. All these circumstances led to the inception of e-commerce. Today, the world witnesses hundreds and thousands of e-commerce apps that provide the best possible facilities to their consumers. The most seen examples of these apps, include Amazon, Flipkart, Big Basket etc. Further, the inception of e-commerce gave rise to the establishment of e-contracts.

An E-Contract is simply an electronic form of contract which is totally different from traditional paper-based contracts. It paved its way through the glitches of the past and made its appearance at the most crucial time. The buying and selling of goods through online platforms often end up with the completion of an e-contract. The main characteristic of an e-contract is that it takes place through the digital mode of communication and provides an opportunity for the seller to reach the end of the consumer without the need of any middleman.

Other characteristics of e-contract include;

  1. Any contract formed during the course of an e-commerce, is termed as E-contract. 
  • It is stipulated by the interaction of two or more individuals using any electronic means, like E-MAIL.
  • The interaction of the individual is with the electronic agent, such as, computer, iPad, mobile phone etc.

An e-contract involves two contracting parties that are formally called as Originator and Addressee. According to the Information Technology Act of 2008, an originator is a person who sends, generates, stores or transmits any electronic message to be sent, generated, stored or transmitted to any other person which does not necessarily include a middleman or in a simplest, an originator is that person who initiates the formalities of conducting an e-contract to send it to the other party. While addressee is that person who is intended by the originator to receive the electronic record but does not include any intermediary or in a more simple way, the party that receives the e-contract initiated by the other party.[1]

ESSENTIALS OF AN E-CONTRACT 

  1. An offer is to be made.  

Both Conventional, as well as electronic contracts, include offer as the main essential. In an electronic contract, the offer is made when the consumer puts products in the virtual basket or shopping cart.

  • The offer made must be acknowledged with a legal consideration. 

After the offer is made, its acknowledgement is requisite. One can anytime cancel the offer before the acceptance is made. Also, the legal consideration of the offer is a must. One cannot make a contract of something which is illicit in nature, such as narcotic drugs etc.

  • The parties must be able to contract. 

Another essential which must be fulfilled is that the contracting parties must be able to contract with each other. There should not be the involvement of a minor or an insane person who is incompetent to enter into a contract.

  • The consent must be free. 

The consent of the parties must be free i.e. without any force, coercion or fraud. In an electronic contract, as there is no real-time interaction, the consent is expressed by clicking throughout the process which made consent free without any restraint.

  • The contracting object must be lawful. 

It must be noted that the product for which the contract has been stipulated must be lawful. Any product of unlawful nature makes the contract void. 

For a contract to be lawful and enforceable, the above essentials are requisite to be fulfilled otherwise the contract done may be made void. These are the very essentials for a contract to smoothly travel through all the processes.[2]

TYPES OF E-CONTRACT 

  1. Shrink Wrap Agreements   

Installing software from a CD to your PC is a common example of Shrink Wrap Agreements. In these types of agreements, the consumer can only read and accept the conditions after buying the product.

  • Click Wrap Agreements   

In Click Wrap Agreement, the user has to either click on Agree or Disagree option to make a contract. Clickwrap Agreements can be seen while installing a software or making an online payment. 

  • Browse Wrap Agreements    

A Browse Wrap Agreement is one that is binding on two or more individuals. In a Browsing agreement, the user has to accept the terms and conditions of the website in order to use it incessantly. Nowadays, these agreements are well acquainted the society, as one encounters them on a daily basis now.

Consultant Agreements, Employment Agreements, Contractors Agreements, Sales Agreements, Re-seller Agreements and Distributors Agreements are some other important types of contracts which we encounter is the contemporary world.

LEGAL PROVISIONS PERTAINING TO E-CONTRACT IN INDIA

In India, the issues related to contracts are governed and managed by the Indian Contract Act of 1872. The provisions on how the contract is to be made, how it should be processed and forwarded, the restraining points to a contract and its completion are all governed through the provisions codified in the Contract Act. There is no separate act for e-contracts, hence all e-contracts from initiation to completion are governed by the provisions of the Contract Act of 1872. 

However, the United Nations Commission on International Trade Law (UNCITL) adopted the Model Law pertaining to Electronic Commerce in order to bring linearity in law among the world countries. Based on this, the Indian Government had enacted the Information Technology Act of 2000. It brings some legitimacy to the aspect of e-contracts.

As per Section 10A of the Information Technology Act, the e-contracts have been recognized. It 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.” Hence, giving legal recognition to e-contracts. 

Further, the Act also provides for the exclusion of electronic transactions and agreements on the following grounds;

  1. Negotiable Instruments
    • Power of Attorney
    • Trust Deed
    • Will
    • Sale Deed or Conveyance deed dealing with the immovable property of any documents relating to any interest in an immovable property.[3]

The Delhi High Court in the case of Societe Des Products Nestle S.A and Anr v. Essar Industries and Ors.[4]paved the way for the abrupt inclusion of Section 65A and 65B in the Indian Evidence Act of 1872 that relates to the admissibility of computer-generated evidence in order to eliminate the existing hindrances to electronic evidence.

Under the Evidence Act of 1872, e-contracts have been given the same recognition as conventional agreements. Section 3 of the Act delineates evidence as “all documents including electronic records produced for the inspection of the court.”  And, Section 65B(1) of the Act states that “any information contained in an electronic record which is printed on a paper, stored, recorded or copied in optical or magnetic media produced by a computer shall be deemed to be also a document and shall be admissible in any proceeding, without further proof or production of the original, as evidence of any contents of the original or of any fact stated therein of which direct evidence would be admissible”.[5]

GLOBAL INSTANCE ON THE ISSUANCE OF E-CONTRACT 

E-contracts have become the new normal now. From the far east to the remote west, the acceptance of electronic agreements can be seen. The abrupt hike in the phenomenon of e-commerce is the main reason which increases the value as well as the scope of e-contracts. The extent of e-commerce has crossed even the international boundaries which led to the connection of markets. Now, a product available in Korea can also be accessed in India, those who thought them convenient are most welcome. The interconnectedness of the world market is one of the main impacts of Globalisation which affects the countries’ economies. 

However, as e-commerce flourished, no doubt it brought much prosperity to nations but the main problem associated with it is the issue of security. As a novice in the world, the concern of security is the most worrisome aspect of e-contracts. 

The United States and European Union have best acknowledged the security concern and have created consumer protection groups to safeguard consumers against any unwanted issue. These consumer protection groups have created mediums where consumers can both sent e-mail based complaints when discontented with advertisements, goods or services, and allege violators of self-regulatory codes of beliefs. 

Both US and EU are quite conscious about the protection of their consumers, however, they differ in their perspective of e-contract. While the EU law focuses on consumer protection and market harmonisation, the US approach is on self-regulation and economic rationale.[6]

CONCLUSION 

It is true if we say that the path of e-contract in India has been smoothened to a great extent. Initially, only the conventional contracts had been made and accepted in the Indian society but today, e-contracts have also been recognised by the people as well as by the government, the Evidence Act of India is an important authority on this point. Although, after being travelling such a long distance, the obstacles are still present in its path in order to attain full recognition and authority.  


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

[2] Shreyans Ranka, All about E-contracts- Meaning, Types and Law, Tax Guru, https://www.google.com/amp/s/taxguru.in/corporate-law/all-about-e-contracts-meaning-types-and-law.html%3famp.

[3] Information Technology Act, 2000, No. 21, Acts of Parliament, 2000 (India).

[4] Societe Des Products Nestle S.A and Anr v. Essar Industries and Ors., 2006 (33) PTC 469 Del (India).

[5] Indian Evidence Act, 1872, No. 1, Acts of Parliament, 1872 (India).

[6] Sylvia Kierkegaard, E-Contract Formation: U.S and EU Perspectives, ResearchGate, (July, 2008), https://www.researchgate.net/publication/228199208_E-Contract_Formation_US_And_EU_Perspectives.


Authored By: Waniya Javed, 1st Year, Aligarh Muslim University

Related posts