Contracts have become so common these days in daily life that many times we do not even recognize that we are entering into a contract. In this globalized world, apart from normal contracts, e-contracts play an important role in everyone’s life. In the era of the covid-19 pandemic, E-contracts were at their peak. E-contracts have come into existence without the meeting of the parties. Due to the increase in E-commerce companies, the number of E-contracts has automatically increased. Easy and economical reach to technology and the convenience of shopping from anywhere at any time are the main reasons for the rapid growth of E-commerce. A man can do everything from buying an airline ticket to hiring a taxi at the tip of his thumb.
WHAT IS AN E-CONTRACT
In the general sense, electronic contracts are the contracts modelled, specified, executed, and deployed by the software system. But to better understand E-contracts, we have to understand the definition of contract first. The agreement that is accessible by law is known as a contract as per section 2(h) of the Indian contract act 1872. While being pleasant, in the case of an E-contract, the summary of section 2(h) still prevails only by changing the manner in which the contract comes into existence. Hence an E-contract is a settlement drawn up online and is enforceable by law.
VALIDITY OF E-CONTRACTS
The validity of E-contracts in India can be achieved through section 10(A) of the Information technology act 2000. According to this section where in a contract composition, the communication of offers, the approval of offers, the revocation of offers, and acceptances, as the case may be, are expressed in electronic form or through electronic records, such contracts shall not be deemed to be unenforceable solely on the ground that such electronic form or means was used for that purpose. So by this section, we come to know that electronic contracts are approved and accepted before a court of law.
But it is compulsory, that e-contracts fulfil all the criteria of a valid contract under section 10 of the Indian contract act 1872, i.e:
- Parties must enter into the contract with their free permission
- Parties must be capable to contract
- There must be lawful object and contemplation
- The agreement is not hereby intentionally declared to be void
So, when an E-contract fulfils all the requirements of section 10 of the Indian contract act, only then its validity will be considered and they are treated like an ordinary paper contract, provided that they satisfy all the essential ingredients in the enforcement of a valid contract i.e,
- Offer and acceptance, (whether oral or written), between the parties to the contract
- Consensus-ad-idem i.e proper understanding between the parties
- There must be lawful consideration
The information technology act 2000 as a whole does not apply to the certain instruments listed below:
- Negotiable instruments
- Power of attorney
- Trust deeds
- Any agreement for the sale or carrying of immovable property
TYPES OF E-CONTRACTS
As there are many types of E-contracts and everyone may have a different way to enter into an E-contract. There are different types of E-contracts are executed depending on the nature of the business and some of them are as follows:
- Shrink wrap agreements
- Clickwrap agreements
- Browse wrap agreements
- Digitally executed agreements i.e E-signatures
SHRINK WRAP AGREEMENTS
The shrink-wrap agreements are the terms and conditions generally present in the plastic or manuals accompanying off-the-shelf software. Those agreements are packaged with the products Use of the product constitutes acceptance of the agreement by the consumer. Software drives C-D ROM are examples of the shrink wrap agreements
It is an online agreement that a user must signify his or her acceptance by clicking a button or a dialogue box that states “I Agree”. The software that is downloaded online typically contains an ‘End user license agreement’. So, by a single click on that particular portal, the person agrees to the terms and conditions.
BROWSE WRAP AGREEMENTS
Sometimes parties may reach a contract-related understanding that is not even organized in a single document but described in a series of e-mails. So those types of contracts can not be held to be invalid merely because on the basis that it is an online exchange of offer and acceptance. E-mails also act as evidence in case of any dispute between the parties.
DIGITALLY EXECUTED AGREEMENTS I.E E-SIGNATURES
We can split e-signature into 2 categories
- Electronic signature
- Digital signature
The electronic signature is a type of base material in electronic form that is coherent with other base materials in electronic form and is used to sign by the signatory. Docu-sign, adobe-e-sign, and sign-desk are some examples of electronic signs. E-KYC verification is mandatory for these types of signs and they should comply with the 2nd schedule of the information technology act 2000.
Whereas digital signature is a cryptography form of encryption that looks like a pen drive called DSC i.e Digital signatory certificate. It is a type of USB token that is a password reserve physical device used to stabilize personal identification. It is the most effective and secure form of signing.
The methodology of e-contracts is the result of a radical change in the substituting technical approach but it is also found that the laws ruling such e-contracts are unclear and volatile. Therefore, they need to be spirited to adopt the present changing scenario of e-commerce as well as e-contracts.
Author(s) Name: Anmol Chalana (University Law College, University of Rajasthan , Jaipur)