Introduction
E-contracts, formerly known as traditional contracts and executed with a pen and paper, are the result of computer innovation worldwide. Everyone’s life is now easier and more comfortable than it was before thanks to this innovation, which allows people to order food while lounging at home or even in the workplace.
These days, almost every company has automated processes to some degree. Ex: Having things delivered right to your door, placing meal orders, scheduling train, movie, bus, and other travel tickets, and giving gifts to your dear ones. With the widespread acceptance and use of internet transactions, there is no longer a need to wait in line to withdraw money from banks.
The idea behind an electronic contract is that two parties must use electronic methods to enter into a contract that can be completed with a single click. Over time, there has been progress in the electronic commerce system. Electronic commerce include the electronic purchase and sale of goods as well as electronic payment methods. These days, with electronics, a task can be completed in a few seconds.
There are no delayed communications or additional travel expenses. Electronic media operate both automatically and independently. The issue of jurisdictional aspect, competency to contact, governing legislation, etc., has been validated by electronic contracting.
In this world, nothing is flawless. The legal legitimacy of E-Contracts will be covered later, along with certain consequences of E-Contact.
A brief Insight of E-contract
A legally enforceable agreement is defined as a contract in Section 2 of the Indian Contract Act of 1872. Electronic contracts, often known as e-contracts, are essentially standard contracts in digital format. Any type of contract created through communication between two or more parties via an electronic medium is called an e-contract. Example: An email that was accepted by the job applicant after being sent as a job proposal.
Numerous terms, including “E-contracts,” “cyber contracts,” “digital contracts,” and “online contracts,” are used to refer to electronic contracts. The only distinction between e-contracts and contracts covered by the Indian Contract Act of 1872 is the medium.
According to the Information Technology Act of 2000’s sections 2(1)(b) and 2(1)(za), there are two parties to an E-Contract: the Originator and the Addressee. When data is sent, generated, stored, or sent to the addressee without the involvement of an intermediate, it is referred to as the Originator. The person who is supposed to get the record that the Originator has set, without the involvement of an intermediary, is the addressee.
The amount of paperwork and associated travel expenses has decreased thanks to the E-contract. But like with everything, there are drawbacks, which will be covered in more detail later.
Types of e-contracts
E-contracts come in three main types. Here they are:
- In clickwrap agreements
Clickwrap agreements the user reads the terms and conditions and then clicks “I accept” or “ok” or “Allow” or “I agree” to agree to them. The person can’t get to anything if they don’t give permission.
It will be taken as read even if the user clicks “I agree” without reading the terms and conditions. This kind of deal is often seen in online registration forms.
- Browse wrap agreements
Browse agreements are the kinds of agreements that customers agree to immediately if they use a website for a long time. People who use that website will not be able to use it if they don’t agree. Most websites put their terms and conditions at the very bottom of the page. One site that has this kind of deal is Amazon’s website.
- Shrink wrap agreements
There are agreements called “shrink wrap agreements” that make the buyer agree to the terms and conditions as soon as they open the package. Of course, the terms and conditions are written on the item’s packaging.
It happens most of the time when people buy software or CD-ROMs. As soon as the buyer starts the software package, these agreements protect the user in case the manufacturer breaches copyright or intellectual property rights.
Issues related to e-contracts
E-contracts save time and work, free up people from work, and do many other useful things that we see every day. But they also have some problems and restrictions. Let’s take them one by one:
- Capacity to contract
This is one of the most important things to think about if you want a deal to be legally binding. It’s written in parts 10, 11, and 12 of the Indian Contract Act, 1872. It says that the person must be sound, major, and not legally disqualified to sign a contract. With these general rules, e-contracts also work.
The problem with E-contracts is that both sides don’t know about each other. The party giving the service or goods doesn’t know if the other party is officially able to sign the contract or not. Suppose a child younger than 16 years old orders something on any shopping site.
- Choice of law
This is an important part of E-contracts that needs extra care. This problem comes up when two people from different countries or states sign a contract. In this case, the laws and rules of both countries are at odds with each other, making it hard to decide which ones to follow.
When the court uses the area where the bulk contracting transactions took place, there is another problem. In electronic contracts, making sure that the right law will be used when a disagreement arises is a tricky matter. One of the parties to the deal is from India, and the other is from the USA.
- Choice of the forum
This problem is like the problem we talked about above in choice of law. When two or more people from different countries have a disagreement, the local courts in each country decide what to do.
The people who signed the contract might not agree on how to settle the conflict. For example, one might want to use arbitration while the other would rather go to court. This is one of the arguments that never ends when people sign an E-contract.
- Electronic authentication
In the past, contracts were made with pen and paper, following the rules of the Indian Contract Act of 1872. Now, thanks to the invention of technology, contracts are made electronically. Because of this, the need for clear standards was a big issue.
Then, the Information Technology Act of 2000 was made to make sure that contracts were real by giving them a formal framework. If either party doesn’t follow the rules, or both parties don’t follow them, the contract is no longer valid. This law makes sure that computer records, electronic documents, and electronic signatures are real.
- Free consent
Both parties must freely agree to the terms of a contract for it to be legally binding. In section 13 of the Indian Contract Act, 1872, free consent is given extra weight. However, the Information Technology Act, 2000 does not include free consent as a way to make an E-Contract.
In fact, E-contracts don’t even allow for the idea of agreement. This is only possible in real-world contracts. In the case of LIC of India v. Consumer Education and Research, the Supreme Court of India said It was decided that the user should be careful when giving consent to avoid problems in the future, since it was their choice whether to accept or refuse.
- Theft of identity
As the name suggests, identity theft happens when someone else takes someone else’s identity, either on purpose or by accident. Theft of name is the wrongdoing with a goal like making money.
Usually, the device is hacked to do it. Section 66 along with Section 43 says that if this happens, the person who did it will get 3 years in jail, a 5 lakhs fine, or both.
