THE LEGAL FRAMEWORK OF E-CONTRACTS IN INDIA

Author: Mahima Mishra (Vivekananda Institute of Professional Studies)


Introduction

When individuals come into contracts with each other, and they're communicating face to face, it's considerably less difficult to keep away from errors than while they are at a distance and contracting with each other through the internet as a means. When parties come into digital contracts the whole agreement can be achieved within seconds at the press of a button.


Online contracts are usually very alike to paper-based commercial contracts in which the financial transactions are handled and decided electronically. With the progression of technology and globalization, it has expedited the presence of e-commerce companies everywhere in the world.


Concept of e-contracts

Electronic Contract means a contract that is done through e-commerce, generally without the parties meeting with each other. It pertains to commercial transactions carried on and decided electronically. A customer withdrawing money from an ATM is an illustration of an electronic contract. Another example of an e-contract is when a person purchases any goods from an online shopping website.

The online contract is introduced to the picture to benefit people in the way of formulating and executing strategies of commercial contracts within the industry conducted over the internet. Online Contract is formed for the sale, purchase, and supply of goods and services to both consumers and business associates.


Kinds of e-contracts

Online contracts can be of three kinds principally i.e. shrink-wrap contracts, click or web-wrap contracts, and browse-wrap contracts. In our day to day living, we habitually observe these sorts of online contracts. 


  • Shrink-wrap contracts are the license agreement via which the terms and conditions of the agreement are enforced upon the contracting events and are usually present on the plastic or in manuals accompanying the software program merchandise which the customers purchase.

  • Click-wrap contracts are web-based contracts that need the user to show his approval or consent to the terms and conditions dictating the licensed usage of the software by clicking “ok” or “I agree” button on the dialog box. A user might choose to disagree or reject the terms by clicking cancel or closing the window. Such a user will not be able to purchase or use the service upon rejection.

  • Browse wrap contracts can be described as an agreement that is binding on two or more parties by the usage of the website. In case of an agreement on browsing, an everyday user of a particular Website is to accept the terms and conditions of usage and other website conditions for constant use. 


Essential Ingredients

The essential ingredients on e-contract are discussed below:

Offer: there needs to be a proposal from either party, without an Offer a contract cannot start. By browsing and choosing the goods and services obtainable on the website of the seller, the buyer makes an offer to purchase such, in relation to the invitation to offer presented by the seller.


Acceptance: the Offer must be accepted and accepted by the person to whom it was intended. In case of an online contract, offer and acceptance can be made through e-mails or by filing requisite form provided on the website. They may likewise need to take an online agreement by tapping on 'I Agree' or 'I Accept' for profiting the services advertised.


Intention to create the legal relationship: It is an essential element of a valid contract that parties to the contract must have the intention to create legal relationships. The intention of the parties is to be considered by the Court in each case and must be ascertained from the terms of the agreement and the surrounding consequences.


There must be a legal or lawful consideration: The fundamental standard is that when involved with an agreement vows to play out his guarantee he should receive something as an end-result of the exhibition of his guarantee. Consideration is something of some incentive according to law.


There should be free consent: Consent which is characterized under Section 13 of the Indian Contract Act, 1872 is a basic prerequisite of an agreement. It is essentially the gathering of brains of the parties. At the point when both concur upon something very similar in a similar way, they are said to assent.

Possibility of performance: The terms and states of agreement must be sure and not ambiguous and should likewise be, for example, are fit for execution. Consent to do an act; unthinkable in itself can't be authorized according to Section 29 of the Indian Contract Act, 1872.


Validity of e-contracts

The Information Technology Act, 2000 gives different procedural, regulatory rules and manages the arrangements identifying with a wide range of electronic exchanges. These incorporate PC information protection, authentication of files by method of advanced or electronic mark. Despite the fact that electronic agreements have been given acknowledgment by the IT Act, 2000, however greater part feels it less made sure about to get into any sort of online agreements as there are no solid legal points of reference for the legitimacy and enforceability of online agreements in India.

The residents of India are encouraging the idea of Digital India, yet there are no distinct enactments identifying with the exchanges done over modernized correspondence systems. A few laws, for example, The Indian Contract Act, 1872, Information Technology Act, 2000, Indian Copyright Act, 1957 and the Consumer Protection Act, 1986 somewhat are working and following up on settling issues that emerge identifying with the development and approval of online agreements.

Judicial Perspective

Indian courts do acknowledge contracts performed over email. For instance, in the case of Trimex International FZE Limited, Dubai vs. Vendata Aluminum Ltd., the Supreme Court of India held that the agreement between the parties was absolutely allowed over e-mails and was a valid contract which completed the terms of the Indian Contract Act, 1872.

Bhagwandas Goverdhandas Kedia v. Girdharilal Parshottamdas,

It was held "that for the most part, it is the acknowledgment of offer and suggestion of that endorsement which closes in an agreement. This implication must be by some outside indication which the law considers as adequate. Therefore, even in the lack of any particular law legalizing e-contracts, cannot be questioned because they are as much valid as a conventional contract is.

Conclusion

An online agreement is structured and established with a mean to give security to online exchanges. It is shaped to check frauds to advance and manufacture trust in real online exchanges and to give a legitimate status to the idea of computerized signature. Yet, to keep a pace with the quick progression of the innovation, a different enactment concerning electronic or online agreement must be established in India.Introduction

When individuals come into contracts with each other, and they're communicating face to face, it's considerably less difficult to keep away from errors than while they are at a distance and contracting with each other through the internet as a means. When parties come into digital contracts the whole agreement can be achieved within seconds at the press of a button.


Online contracts are usually very alike to paper-based commercial contracts in which the financial transactions are handled and decided electronically. With the progression of technology and globalization, it has expedited the presence of e-commerce companies everywhere in the world.


Concept of e-contracts

Electronic Contract means a contract that is done through e-commerce, generally without the parties meeting with each other. It pertains to commercial transactions carried on and decided electronically. A customer withdrawing money from an ATM is an illustration of an electronic contract. Another example of an e-contract is when a person purchases any goods from an online shopping website.

The online contract is introduced to the picture to benefit people in the way of formulating and executing strategies of commercial contracts within the industry conducted over the internet. Online Contract is formed for the sale, purchase, and supply of goods and services to both consumers and business associates.


Kinds of e-contracts

Online contracts can be of three kinds principally i.e. shrink-wrap contracts, click or web-wrap contracts, and browse-wrap contracts. In our day to day living, we habitually observe these sorts of online contracts. 


  • Shrink-wrap contracts are the license agreement via which the terms and conditions of the agreement are enforced upon the contracting events and are usually present on the plastic or in manuals accompanying the software program merchandise which the customers purchase.

  • Click-wrap contracts are web-based contracts that need the user to show his approval or consent to the terms and conditions dictating the licensed usage of the software by clicking “ok” or “I agree” button on the dialog box. A user might choose to disagree or reject the terms by clicking cancel or closing the window. Such a user will not be able to purchase or use the service upon rejection.

  • Browse wrap contracts can be described as an agreement that is binding on two or more parties by the usage of the website. In case of an agreement on browsing, an everyday user of a particular Website is to accept the terms and conditions of usage and other website conditions for constant use. 


Essential Ingredients

The essential ingredients on e-contract are discussed below:

Offer: there needs to be a proposal from either party, without an Offer a contract cannot start. By browsing and choosing the goods and services obtainable on the website of the seller, the buyer makes an offer to purchase such, in relation to the invitation to offer presented by the seller.


Acceptance: the Offer must be accepted and accepted by the person to whom it was intended. In case of an online contract, offer and acceptance can be made through e-mails or by filing requisite form provided on the website. They may likewise need to take an online agreement by tapping on 'I Agree' or 'I Accept' for profiting the services advertised.


Intention to create the legal relationship: It is an essential element of a valid contract that parties to the contract must have the intention to create legal relationships. The intention of the parties is to be considered by the Court in each case and must be ascertained from the terms of the agreement and the surrounding consequences.


There must be a legal or lawful consideration: The fundamental standard is that when involved with an agreement vows to play out his guarantee he should receive something as an end-result of the exhibition of his guarantee. Consideration is something of some incentive according to law.


There should be free consent: Consent which is characterized under Section 13 of the Indian Contract Act, 1872 is a basic prerequisite of an agreement. It is essentially the gathering of brains of the parties. At the point when both concur upon something very similar in a similar way, they are said to assent.

Possibility of performance: The terms and states of agreement must be sure and not ambiguous and should likewise be, for example, are fit for execution. Consent to do an act; unthinkable in itself can't be authorized according to Section 29 of the Indian Contract Act, 1872.


Validity of e-contracts

The Information Technology Act, 2000 gives different procedural, regulatory rules and manages the arrangements identifying with a wide range of electronic exchanges. These incorporate PC information protection, authentication of files by method of advanced or electronic mark. Despite the fact that electronic agreements have been given acknowledgment by the IT Act, 2000, however greater part feels it less made sure about to get into any sort of online agreements as there are no solid legal points of reference for the legitimacy and enforceability of online agreements in India.

The residents of India are encouraging the idea of Digital India, yet there are no distinct enactments identifying with the exchanges done over modernized correspondence systems. A few laws, for example, The Indian Contract Act, 1872, Information Technology Act, 2000, Indian Copyright Act, 1957 and the Consumer Protection Act, 1986 somewhat are working and following up on settling issues that emerge identifying with the development and approval of online agreements.

Judicial Perspective

Indian courts do acknowledge contracts performed over email. For instance, in the case of Trimex International FZE Limited, Dubai vs. Vendata Aluminum Ltd., the Supreme Court of India held that the agreement between the parties was absolutely allowed over e-mails and was a valid contract which completed the terms of the Indian Contract Act, 1872.

Bhagwandas Goverdhandas Kedia v. Girdharilal Parshottamdas,

It was held "that for the most part, it is the acknowledgment of offer and suggestion of that endorsement which closes in an agreement. This implication must be by some outside indication which the law considers as adequate. Therefore, even in the lack of any particular law legalizing e-contracts, cannot be questioned because they are as much valid as a conventional contract is.

Conclusion

An online agreement is structured and established with a mean to give security to online exchanges. It is shaped to check frauds to advance and manufacture trust in real online exchanges and to give a legitimate status to the idea of computerized signature. Yet, to keep a pace with the quick progression of the innovation, a different enactment concerning electronic or online agreement must be established in India.

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