Indian law and electronic contracts

The following is a brief introduction to the topic

E-contracts, which were previously known as traditional contracts and written on paper or pen and ink, are now possible thanks to computer innovation. This technology has made life easier and more comfortable for everyone. For example, one can order food from home or office.

Almost all businesses have automated themselves to some extent. Ordering food, buying tickets for movies, trains, buses, etc., and sending gifts to friends are all examples of robotization. Online transactions are widely used and accepted, so there is no need to wait in long lines to withdraw money from banks.

The contract is a concept that involves at least two people using electronic means to enter into a contract. The electronic commerce framework is improving with time. Electronic trading is the electronic purchase and sale of an item and payment via electronic means. In the electronic age, work is completed in just a few seconds.

There are no postponed or extra travel costs. The electronic medium is not only automatic but also autonomous. Electronic Contracting has solved the issue of jurisdictional aspects, contact competence, governing laws, etc.

There is no perfect world. E-Contacts have some implications that will be discussed in the future about their legal validity.

A brief insight into e-contact

E-Contracts are essentially the digitalized version of traditional contracts. E-contracts are any contract that is formed through the interaction between two or more parties via an electronic medium. E-mail is sent to the job seeker as a proposal for a new job and accepted by him via E-mail.

Electronic contracts go by many different names, including “e-contracts,” “cyber contracts,” “digital contracts,” and “online agreements.” E-contracts are very similar to the contracts mentioned in Indian Contract Act 1872. The only difference is the medium.

The Information Technology Act of 2000, section 2(1) (a) and 2(1) (b), respectively, mention that there are two parties in an E-Contract: the Originator and the Addressee. The Originator is a person who generates, transmits or stores the data without involving an intermediary. The Originator is the person who sends, generates, stores or transmits the data to the addressee without the intermediary.

The E-contract reduced the amount of paperwork, travel costs, and other expenses. Everything has its disadvantages, and this is no exception.

Forms of electronic contracts

E-contracts can be categorized into three types. There are three main types.

Clickwrap agreements

Clickwrap Agreements are agreements where the user agrees by clicking on “I accept,” “ok,” “Allow,” or “I agree.” The user can’t access anything if they don’t allow it.

The user’s agreement will be deemed read even if they click “I agree” without reading the terms and conditions. This type of agreement is common in online registration forms.

Browse Wrap Agreements 

Browse wrap agreements are agreements that are automatically accepted if a user uses a website for an extended period. If the user disagrees, he won’t be able to use the website. The terms and conditions will usually be at the bottom part of the site. Amazon’s site is an example of this type.

Shrink Wrap Agreements 

The terms and conditions of a shrink wrap agreement are automatically applied to the buyer when the package is opened. Terms and conditions are usually written inside the product’s packaging.

This is a common practice when purchasing software products like CD-ROMs. As soon as the purchaser opens the packaging of the software, these agreements will indemnify them for any violation of copyrights or intellectual property rights by the manufacturer.

E-contracts: the essential elements

Certain elements must be present to validate an E-Contract following the Indian Contract Act of 1872. There are three essential elements.

Legal offers

Acceptance of lawful goods and services

Legal object

Contracting with competent parties

The meaning of specific terms

Questions relating to electronic contracts

E-contracts are not without limitations. They can save time and labor and reduce the amount of work. Let’s go through them individually.

Capacity contract

It is essential to take into consideration this element when deciding whether an agreement will become a legal contract. It is mentioned in sections 10, 11, and 12 of the Indian Contract Act 1872, which include soundness, central, and not be disqualified by law for contracting. E-contracts must also meet these basic requirements.

In an E-contract, both parties are unaware that they exist. The person providing the goods or service does not know the other party’s legal capacity to contract. If a 16-year-old minor orders something on any online shopping site.

Choose your law

This problem needs to be addressed in E-contracts. The issue occurs when two parties contracting are from different countries or states. The rules and regulations from both countries clash in this situation, making it difficult to decide which direction should be followed.

A second problem occurs when the court decides to apply the jurisdiction in which the bulk contracting transaction took place. In E-contracts, it is difficult to determine the law that will apply in the event of a dispute. One contracting party (Originator) is from India, and the other one (addressee), from the USA.

Forum selection

This problem is very similar to that discussed in the previous section on the choice of law. Parties residing in various nations will use their local courts to resolve disputes.

The parties to the contract might have different preferences. For example, one party may prefer arbitration while the other chooses a commercial lawsuit to resolve the dispute. When parties decide to E-contract, they commit themselves to a never-ending battle.

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