With rapid changing world economy and increasing use of Internet, people’s lifestyle has changed and is still changing immensely. Further enhancement in technology and increased dependence on internet and internet based transactions appears to be the future. Most of the individuals living in this world have an access to internet irrespective of location whether living in a rural area or a metropolitan city. Technology has made it possible for an individual to access any information from world over and shop online sitting in any part of the world with just a click of a button provided the laws of the country permit the same.
With the steady growth of online transactions, there is an increased use of e-commerce and thus e-contracts. Near about every person knowingly or un-knowingly has entered into or is entering into an e-contract. These e-contracts may pertain to shopping on Amazon, ordering food online on zomato or swiggy, booking hotels on make my trip or purchasing online games or software. Even taking an Uber or Ola amounts to entering into an ecommerce transaction. When you book a cab online unknowingly you are entering into an e-contract with the cab company. The increase in digital payments also means entering into more e-contracts whenever a payment is made digitally an e-contract is entered into resulting in e-commerce. Simply stated E-contract is a contract modelled, specified, executed and deployed by a software system.
The Organization for Economic Cooperation and Development (OECD) defines E-commerce as a new way of conducting business, qualifying it as a business occurring over networks which uses non-proprietary protocols that are established through an open standard setting process such as the Internet.
ESSENTIALS OF CONTRACT
As per Indian Contract Act a contract to be a valid contract there should be an offer and an acceptance. E-Contract or online contract is an agreement modelled, signed and executed electronically, usually over internet. An Online contract is conceptually very similar and is drafted in the same manner in which a traditional paper-based contract is drafted. In e-contracts an individual enters a website of online seller who is offering various products and/or services and the individual by using the website gives a formal consent to website and both the parties enter into a contract. The buyer who is interested in buying the product(s) or services either clicks on the ‘I Agree’ or ‘Click to Agree’ option for indicating the acceptance of the terms presented by the website/seller or they can sign electronically. Online Contracts are modelled for the sale, purchase and supply of products and services to both consumers and business associates.
All pre-requisites of a valid contract are to be fulfilled as provided under the Contract Act. Intention to enter into a legal relationship, the capacities of the parties to enter into a contract, free consent of the parties is the most important aspects of valid contract, which can be defeated in a contract of e-commerce very easily. Capacity to enter into a contract is the age of the parties entering into a contract, soundness of mind etc. Again the free consent means the consent of the parties should not be induced by fraud, misrepresentation, mistake etc. The terms and conditions associated with an e‐contract has to remain in conformity with the Indian Contract Act, irrespective of the mode of ‘click wrap’ or ‘shrink wrap’ agreements or any other mode recognized by the IT Act.
Further, the e-contract in itself may be held unconscionable for providing no option of negotiation. Here, the question then arises is whether such standard form contracts are to be considered unconscionable and may be struck down by the courts. U.S. courts have not been averse in treating such standard contracts as unconscionable, making them liable to be struck down in facts and circumstances of the cases. In India there does not seem to be well developed jurisprudence on the issue of whether standard form online agreements are unconscionable. However, certain provisions under the Indian Contract Act deal with the unconscionable contracts such as when the consideration in the contract or the object of the contract is opposed to public policy.
TYPES OF CONTRACTS
There are different types of e-contracts which a person enters on daily bases. Some of the online different type of contracts are:-
- Shrink Wrap Agreements
These agreements can only be read and accepted by the consumer after opening of a particular product.
- Click or Web Wrap Agreement
These types of agreements are mostly found in the software installation process. The user has to click either ‘Accept’ or ‘Decline’, to accept or reject the agreement respectively. These agreements lack bargaining power.
- Browse Wrap Agreement
These are contracts that user agrees to simply by continuing to use a service or browse a web page.
- EMAILS
Emails have been ruled to constitute legally binding contracts in several cases. Emails can also be turned legally binding by signing them with digital or electronic signatures.
EULA (END USER LICENSE AGREEMENT)
- End User License Agreement is a legally binding agreement between the owner of a product and the end-user. More specifically, a contract between the licensor of a product and the licensee.
There are different types of sites
- a) Fully interactive sites where users purchase goods or services, exchange information or files, or enter into agreements;
- b) Fully passive sites where information is available for people to view; and,
- c) Sites somewhere in the middle, with limited interaction.
ADMISSABILITY OF E-CONTRACTS IN INDIAN SYSTEM
Electronic Contracts are mostly digitally signed contracts and the same are acceptable in Indian Courts. As per Section 5 of The Information technology Act an agreement is enforceable in law if the same has been signed by electronic signature and the same has been affixed in such a manner as may be prescribed by the Central Government from time to time. India being a signatory to UNCITRAL enacted the Information Technology Act, 2000. The first ever law enacted by the Government of India on e-commerce was Information Technology (IT) Act 2000. It was an enactment to give effect the UNCITRAL Model Law on Electronic Commerce, 1996. The General Assembly of the United Nations adopted a resolution on January 30, 1997 commending the Model Law on Electronic Commerce for a favourable consideration by the Member States as a Model Law when they enact or revise their laws, in view of the need for uniformity of the law applicable to alternatives to paper‐based methods of communication and storage of information. Accordingly, to give effect the UNCITRAL law on E-Signature (MLES), 2001 India enacted the Information Technology (Amendment) Act, 2008 (The UNCITRAL Model Law on International Commercial Arbitration is a model law prepared by UNCITRAL, and adopted by the United Nations Commission on International Trade Law on 21 June 1985. In 2006, it was amended and now includes more detailed provisions on interim measures.)
Even the Indian Courts are accepting electronic evidence. The Indian Government has amended “Indian Evidence Act” and had incorporated Section 65B whereby at the time of submitting any electronic evidence before the court the witness has to file/submit a certificate under Section 65B of the Indian Evidence Act stating that the electronic record submitted by the witness was kept in his custody and had not been tampered with and the printout of the same has been taken in his presence. The Supreme Court of India in a matter titled as Anvar P.V vs. P.K Basheer has stated that “if an electronic record as such is used as primary evidence under section 62 of the evidence Act, the same is admissible in evidence, without compliance with the conditions in section 65(b) of the Evidence act.” The Government has also published rules under Information Technology Act, 2000 with regard to acceptance and enforceability of electronic records and agreements. Recently in 2021 Indian Government has brought changes in the IT rules specifically dealing with social media platforms including whatsapp, Facebook, Twitter etc. The social media platforms have been raising their voice against the same terming it as an assault on the freedom of expression, however the Courts are yet to deliver their verdict upon the same.
GOVERNENCE OF E-CONTRACT
All the Electronic contracts are governed by The Indian Contract Act, and provisions of The Indian Contract Act and Indian Evidence Act are applicable while adjudicating the disputes pertaining to electronic contracts/e-contracts.
REMEDIES FOR BREACH OF E CONTRACT
Whenever there is a breach of an E-contract, the suffering party has both Civil and criminal remedies.
If an individual is of the view that there is theft relating to e-contract or any confidential information of an individual has been stolen and misused by originator. Indian Government has established a special cell in police department known as Cyber Crime cell where all the matters pertaining to theft related to Information Technology Act are dealt with by Cyber cell. Indian Penal Code as well as Information Technology Act specifically provide provisions dealing with disputes/complaints pertaining to E-Contracts. It has also made the offences like hacking, damage to computer source code, publishing of information which is obscene in electronic form, breach of confidentiality and privacy, and fraudulent grant and use of digital signatures punishable. Further, it provides for civil liability i.e., Cyber contraventions and criminal violations, penalties, establishment of the Adjudicating Authority and the Cyber Regulatory Appellate Tribunals. The related provisions of the Indian Panel Code, 1860, the Indian Evidence Act, 1872, Banker’s Book Evidence Act, 1891 and the Reserve Bank of India Act, 1934 have been amended to address the related issues of electronic commerce, electronic crimes and evidence, and to enable further regulation as regards electronic fund transfer.
Individual also has remedies available in Civil laws under “The Indian Contract Act” and an individual can raise claim for damages against the originator. The individual has the option of going to Civil Court or Consumer Forum depending upon the facts of each case.
JURISDICTION
While dealing with the dispute pertaining to the electronic agreement the main issue which the courts were facing initially was with regard to territorial jurisdiction of the contract. The Section 13 of the Information Technology Act provides:-
“As otherwise agreed to between the originator and the addressee, an electronic record is deemed to be despatched at the place where the originator has his place of business and is deemed to be received at the place where the addressee has his place of business.
Thus until otherwise agreed between the parties in agreement, if the principal place of business of originator is Delhi and the contract is accepted in Mumbai, then Delhi courts as well as Mumbai courts will have the jurisdiction to deal with the matters pertaining to e-contracts. However still there remains an ambiguity with regards to the jurisdiction involved in course of e-transactions since there is an involvement of different stages to it, thereby making the entire process way more complicated.
CONCLUSION
The world is witnessing great technological advancement by each passing day. While no one seemed to be aware about Zoom, Microsoft teams, Facetime and Google meet before Covid times they have emerged as one of the most important tools which has kept families and friends connected. Classes are being conducted online and examinations are also taking place online. It has shown companies the way in which they can cut rental and maintenance costs. All of these involve entering into an e contract. E contracts are not only here to stay but we can expect more of their usage with the expansion in technology. A few years ago no one could visualize digital payments and now digital payments has become common especially in urban areas and people are making them without realising that they are entering into an e contract. With the increase in e commerce these e contracts in all likelihood are likely to increase and with the increase in e contracts there will in all likelihood of increase in disputes already with increase in cyber crimes the issue as to who is responsible is coming to the fore and courts are being called upon to look into e contracts more vigilantly. It is high time that people become aware about e contracts and enter into these contracts consciously. There is a need for people to understand e contracts. This paper is an attempt towards creating this awareness.