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E-Contract: Evidentiary Value

With the recent advancement in computers and technology, there is an immense change in the standard of living of people. The communication is no more restricted to a particular geographic area. Information is transmitted and received widely and rapidly than ever before. We live in a world today where everything we need is available online and at the click of a button from the convenience of our homes. We often click the box of acceptance to agree with the terms and conditions given on a website, this is, in fact, is a type of contract. So what exactly are the nature of these contracts and what legal ground they hold?


What is an E-Contract?


The Indian Contract Act, 1872 defines a contract as “an agreement which is enforceable by law”. E-Contracts or Electronic Contracts are nothing but a contract which is made through electronic mode, or where two or more parties are far from each other. E-Contract is an agreement that is modeled, signed, and executed electronically i.e. mainly over the internet. The concept of online contracts is very similar to the pen-paper contract and it is also drafted as same as the traditional one is drafted. The seller or vendors who want to sell their products offers it to his prospective buyers. In turn, buyers who are interested in the products consider their options, place their orders, and make their payments. The online contract is brought to help people in the way of formulating and implementing policies of commercial contracts within business directed over the internet. Online Contract is modeled for the sale, purchase, and supply of products and services to both consumers and business associates.


Types of E-Contracts-


The e-contracts are broadly divided into three parts based on the ways of enforcement.

  1. Browse Wrap Contract- These are the types of contract which are binding on the users when they visit the website. In the case of a browsewrap agreement, a regular user of a particular website deemed to accept the terms of use and other policies of the website by merely accessing the same. Classic examples of such contract websites are E-Commerce websites such as Amazon and Flipkart.

  2. Shrink-Wrap Contract-These agreements are usually licensed agreement applicable in the cases of buying software. In this case, the terms and conditions are enforced by way of a manual that generally accompanies the product. The examples of these contracts are agreements that are delivered in the form of a manual when we purchase software products.

  3. Click Wrap Contract- Click Wrap Contracts are the agreements where a user is required to give his consent by clicking on the “I Agree’ or “I Accept” or “Ok” button. The User who disagrees with the terms and conditions will not be able to proceed further and the transaction is failed. Once the consent is given the terms and conditions will not change.

Formation of E-Contract-


As per the Indian Contract Act, 1872 e-contracts have a lawful status if they follow the common contractual rule. Three elements which are necessary for forming a valid contract are- free consent of the parties, lawful objects and valid consideration. The same goes for the E-contracts also. A Contract can be written, oral, or a combination of both, so there is no separate legislation for E-contracts. Online contracts are formed by way of emails, and telephone and are similar to a traditional pen-paper contract.


In the case of Trimex International FZE Ltd. Dubai v. Vedanta Aluminium Ltd., India (Arbitration Petition No. 10 OF 2009), and an offer was made by the petitioner through e-mail, for the supply of Bauxite to the respondent on October 15, 2007. Several emails were then exchanged between the two companies and thereafter acceptance was conveyed by the respondent through e-mail on October 16, 2007. The acceptance mail was read by the petitioner at 3:06 PM on 16.10.2007. The Supreme Court held that acceptance conveyed by the respondent satisfied the requirements of Section 4 of the Indian Contract Act, 1872, and an irrevocable contract was concluded when the acceptance came to the knowledge of proposer/petitioner i.e. at 3:06 PM on 16.10.2007.


VALIDATION OF E-CONTRACT-


The Information Technology Act, 2000 provides various procedural, administrative guidelines and regulates the provisions relating to all kinds of electronic transactions. Under Section 10 of the Information Technology Act, 2000 e-contracts are valid and enforceable. This section states thatWhere in a contract formation, the communication of proposals, the acceptance of proposals, the revocation of proposals and acceptances, as the case may be, are expressed in electronic form or by means of an electronic record, such contract shall not be deemed to be unenforceable solely on the ground that such electronic form or means was used for that purpose.


The Information Technology Act, 2000, gives clear guidelines for the procedural, administrative, and provisional regulations related to e-contracts. Moreover, famous cases in India and worldwide prove that consenting by clicking on “I Agree” and entering into the user agreement makes it a valid contract and legally enforceable.


EVIDENTIARY VALUE OF E-CONTRACT


In India, a lot of people hesitate from online transactions because their terms and conditions are not transparent. Another major issue is the nature of the law governing electronic contracts. Even though the IT act makes it legal yet no separate provisions for governing online contracts exist. Section 65-B of the Indian Evidence Act, 1872, lays down the procedure for furnishing electronic documents as evidence. The section states that any information contained in an electronic record produced by a computer in printed, stored, or copied form shall be deemed to be a document and it can be allowed as evidence in any proceeding without further proof of the original. However, the admissibility of the electronic record is subject to various conditions prescribed under the section.


CONCLUSION


It can be concluded that where a number of steps of a contract have been affected through electronic means, and the parties are at consensus-id-idem then such an agreement that fulfills all the essentials requirements for a valid contract under the Indian Contract Act, 1872 is valid and legally enforceable.

REFERENCES:


[1] Indian Contract Act, 1872

[2] Indian Evidence Act, 1872

[3] Information Technology Act, 2000

[4] https://www.indianbarassociation.org/e-contracts/

ABOUT THE AUTHOR:

Anubhav Shukla is currently a student at the University of Petroleum and Energy Studies (UPES), Dehradun.

You can contact him at https://www.linkedin.com/in/anubhav-shukla-0020771a0

Editor: Jayant Upadhyay

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