In this technological environment, the standard of people’s lives has changed immensely. The use and utilization of computers & technology have increased. Computers help fill all the transactions or help communicate globally with anyone in this world. The technology has created a bridge or channel between the people globally through a network of computers. The contract between the parties is also possible to commence through an electronic medium, an online contract. The legal validity of contracts generally is soundproof compared to online contracts or E-Contracts.
An e-contract[1] is dependent on an electronic medium, electronic record & digital network that should be performed legally. An E-contract must be completed with full digital security, must be virus-free and scam-free, and should be capable of having evidentiary value. An online contract is governed or served the same as a general contract with provisions given in the Indian Contract Act, 1872. However, the Information Technology Act, 2000, also plays a central role in keeping electronic records of all the transactions safely. IT Act, 2000 has given legislative authority[2] to e-contracts. Electronic or digital signature recognition for the validity of any contract, agreement, or transaction is done between two or more parties. The Indian Evidence Act, 1872, also makes provision as to electronic records as evidence, using digital signature recognition in the future in any legal issue.
Table of Contents
E-CONTRACTS
A contract is an agreement between two or more parties with a view of commencing or conducting any transaction or business.[3] The contract performed, commenced, or conducted between two or more parties through electronic mediums or modes is known as an e-contract.[4]
The agreement formed between the parties requires some particulars to be fulfilled to make the contract legally valid & enforceable by law. The contract can be entered into orally or in writing. Online contract requires some essentials to be fulfilled to make it legally valid & enforceable and it is an electronic signature or digital signature. There is a radical change in the use of computers today because it serves worldwide due to advances in information technology & telecommunication. The main benefit of online contracts is that it is time-saving and can be formed within minutes.
E-contracts are the electronic contract where the modes of communication are email, internet, fax, etc. The use of these modes is relatively easy. In e-contracts, every task related to that contract is performed electronically only. These are performed keeping in mind all the safety and security in contracts; the protection as an electronic signature or digital signature.
VALIDITY OF ONLINE CONTRACTS
The provisions of the Indian Contract Act, 1872, have its applicability to the e-contract and every form of contract. The essentials of online contracts are the same as paper-based contracts, and include:
- Offer[5] – When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise.
- Promise & acceptance[6] – When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise.
- Free consent[7] – Two or more persons are said to consent when they agree upon the same thing in the same sense.
- Lawful consideration[8] – When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise.
- Party’s competency– Every person is competent to contract who is of the age of majority according to the law to which he is subject , and who is of sound mind and is not disqualified from contracting by any law to which he is subject.
A contract will be lawful & enforceable when the above requirements given under Section 10 of Indian Contract Act, 1872 are fulfilled.
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TYPES OF E-CONTRACT
The types of e-contracts [9] are as follows:-
CLICKWRAP AGREEMENT
A clickwrap agreement is usually found as a part of the installation process of software packages. it’s also called a “click-through” agreement or click-wrap license. it’s a take-it-or-leave-it contract which lacks bargaining power. If a customer likes a product and needs to shop for it or avail its service he clicks on ‘I accept’ or ‘Ok’ and if he rejects it, then cannot buy that product or avail that service. Click-wrap agreements is of the subsequent types: 1. Type and click on where the user must type “I accept” or other specified words in an on-screen box and so click a “Submit” or similar button. This displays acceptance of the terms of the contract. A user cannot proceed to download or view the target information without following these steps. 2. Icon Clicking where the user must click on an “OK” or “I agree” button on a panel or pop-up window. A user indicates rejection by clicking “Cancel” or closing the window.
BROWSE-WRAP AGREEMENT
Browse-wrap agreements cover the access to or use of materials available on an internet site or downloadable product. provided that the person agrees to the terms and conditions on the online page, then he can access the contents of the online page.
In most cases, the web site or the browsewrap includes a press release that the user’s continued use of the web site or the downloaded software manifests assents to those terms. Many times, the terms mentioned within the browsewraps are explicitly displayed on the web site but the existence of such browse wrap is hidden or not seen on the page.
SHRINKWRAP AGREEMENT
Shrink wrap contracts are boilerplate or license agreements or other terms and conditions which are packaged with the products. The usage of the merchandise deems the acceptance of the contract by the buyer. The term ‘Shrink Wrap’ describes the shrink wrap plastic wrapping which coats software boxes or the terms and conditions which include products on delivery. PC programming organizations broadly depend upon the use of “shrinkwrap” permit assertions within the mass business circulation of programming. “Shrinkwrap” assertions are unsigned permit understandings which state that acknowledgment on the client of the terms of the assertion is demonstrated by opening the shrinkwrap bundling or other. Bundling of the merchandise, by utilization of the merchandise, or by another determined instrument.
POSITION OF E-CONTRACT IN INDIA
E-contracts have a primary role for both customers as well as for sellers. The seller sends all the details through electronic medium only & then customers also make the payment through e-transactions (online payment) only and not through cash payment. People think it’s relatively safe to pay through online mode.
In India, all the issues related to e-contract were resolved by the Indian Contract Act,1872, the Information Technology Act, 2000, the Consumer Protection Act, etc. The contracts have become a part of everyone’s life in this blast of the technological era.
The Information Technology Act, 2000, was established by India’s parliament to regulate the issues related to the development & validation of e-contracts in India. In Asia, India has the highest no. of web-clients. It’s the developing stage of India in technology. Online transactions, online business has a vast market in India; millions of transactions are taking place daily.
Following are some of the Acts providing provisions for e-contracts:-
- The Information Technology Act, 2000
- The Indian Contract Act, 1872
- The Electronic Commerce Act, 1998
- The Indian Evidence Act, 1872
- The Banker Book Evidence Act, 1891
- The Indian Penal code, 1860
- The Reserve Bank of India Act, 1934
- The Consumer Protection Act, 1986
- The Indian Copyright Act, 1957
REMEDIES FOR BREACH OF ONLINE CONTRACT
The same provisions given in the Indian Contract Act,1872, for breach of contract will be followed for the violation of e-contract and there is no such separate provisions or remedy for online or e-contracts.[10] There are two treatments for the breach of contract, damages & quantum meruit that are given in the Indian Contract Act,1872 as per SRA (Specific Relief Act). Some more remedies are there, such as specific performance of contract and injunction restraining.
In the Indian Contract Act, 1872, specifically sections 73 and 74, deal with the remedies of breach of contract & any damage. Sections 73 to 75 of Indian Contract Act, 1872 provide rules for assessing damage in the case of 1854[11]. Damages are also in the form such as nominal damage, compensation for mental agony, liquidated damages & pre-contract expenditures.
CONCLUSION
The contract performed, commenced, or conducted between two or more parties through electronic medium or mode is e-contract. The agreement formed between the parties requires some essentials to be fulfilled to make the contract legally valid & enforceable by law. Contracts can be performed orally or in written. Thus, online contracts also require some essentials to be fulfilled to make it legally valid & enforceable and the essential is electronic signature or digital signature.
Contracts can be classified as traditional as well as electronic contracts. For a contract to be valid and enforceable, there must be an offer, acceptance, legal consideration, free consent, etc. In short, provisions of Section 10 of ICA[12], 1872,must be required to be fulfilled. E-contract provisions are the merger of two, cyber laws and contractual laws, and thus, are regulated by both the Acts.[13]
REFERENCES
[1] The Indian Evidence Act, 1872, s.85(c).
[2] The Information Technology Act, 2000, s.10.
[3] The Indian Contract Act, 1872, s.2(h).
[4] The Information Technology Act, 2000, s.10A.
[5] The Indian Contract Act, 1872, s.2(b).
[6] The Indian Contract Act, 1872, s.2(b).
[7] The Indian Contract Act, 1872, s.13.
[8] The Indian Contract Act, 1872, s.2(d).
[9] https://blog.ipleaders.in/e-contracts-shrink-wrap-click-wrap-browse-wrap-agreements/
[10] http://www.acadpubl.eu/hub/.
[11] Hadley v. Baxendale, (1854)9 Exch 341.
[12] The Indian Contract Act,1872, s.10.
[13]http://mzuhssjournal.in/images/resources/v5n1/maryanka.pdf.
BY SAKSHI AGARWAL | INDORE INSTITUTE OF LAW , INDORE