E-CONTRACTS AND ITS GOVERNING LAWS IN INDIA

Introduction

A contract is a legally enforceable agreement between two or more parties that consists of an exchange of promises. And it is essential that both parties in a contract should reach an agreement, and to reach the agreement, it is important that the offer is accepted by one party to another.

Just like a normal contract, an Electronic Contract is a paperless contract between one or more than one individual through an electronic means. The parties in an E contract as per Information Technology Act 2000 include Originator under section 2(1)(za), Addressee section 2(1)(b), and an intermediary under section 2 (1)(w). An intermediary under section 2 (1)(w) is not a party to the contract, but it acts as a facilitator. E Contracts take place on digital platforms which include the internet. For example, when we buy our essentials from platforms like Amazon and Flipkart, we are bound to a digital contact.

Legal Recognition of E Contracts in India

Section 10A of the Information Technology Act 2000 mentions the validity of an E Contracts. The particular section was added in the 2009 amendment. The section clearly specifies that if a contract has been made, a communication of proposal , acceptance, revocation, and acceptance is in an electronic form, or if there is an availability of E records then it is enforceable. The E Contracts are basically regulated by the same applicable laws as per the Indian Contract Act 1872. But it is important to keep in mind that E Contracts are not applicable in Negotiable Instruments, Power of Attorney, Will/ Testaments, Trusts, Conveyance, or sale of immovable property.


Section 65 B of Evidence Act 1872 mentions the admissibility of electronic records.

The computer components and the situations in which the evidence is collected are discussed in Section 65B. It also discusses how technological gadgets were used when recording evidence. In Section 65B, Subsection 1 is where the computer output is specified. Any electronic device that has the ability to store, process, and communicate information, such as a computer, mobile phone, tape recorder, or video recorder, can be assumed to be an electronic device when reading this section in conjunction with Section 2 of the Information Technology Act of 2000. "Computer output" is a popular name for these gadgets. The Indian Evidence Act's Sections 85A and 85B specify that absent clear and convincing evidence to the contrary or until the facts are rejected, the Court shall infer that any electronic record bearing an electronic signature is legitimate.

Types of Electronic Contracts

Shrink Wrap Agreements - Contracts known as "shrink wrap agreements" are regarded as licensing agreements that become "enforceable" the minute a user starts using the goods. This suggests that using the product or service is the first step in the user's acceptance. These contracts/agreements are frequently used by programmers and organizations because they are "unsigned permit understandings," meaning that once the link or "package" is opened, the user accepts the terms and conditions (accessed).

Typically, a shrink-wrap agreement is a software license that explains a seller's conditions to the buyer and contains notification of the agreement, title retention in the seller, prohibitions on transfer and modification, the exclusion of reverse engineering, and restricted copying clauses.

Click Wrap Agreement

These agreements are typically included in the software that has to be installed in some way on the user's device. A "click-through" agreement is another name for it. The lack of "negotiating power" is an example of true that there could be any sort of discussion between both the parties. The user must agree to the terms and conditions in order to use the application; otherwise, they will not be allowed to do so. For example, "I understand the terms and circumstances of data privacy," "I disagree," and other EULA responses.

Browse Wrap Agreements

These agreements are impliedly incorporated in the web pages, indicating that they apply to all elements of using or accessing online materials found on websites or other pages that allow downloading. To access the website's contents, the user must accept the terms and conditions of that particular website. These agreements may be concealed or brought to the user's attention. A statement explaining how a user's continuous usage of the website would indicate agreement is typically included on the page. If they are displayed in a way that allows the user to understand the terms before using the website, they are enforceable.


SAFE HARBOUR

Section 79 of the Information Technology Act 2000 mentions the Safe Harbor. It is an exemption of liability for the intermediaries from liability for information, data, or communication links made available or hosted by them by third parties (third party).

If an intermediary's role is restricted to only offering a communication mechanism for the transfer of information, then it is not accountable. If an intermediary takes reasonable care, it is not accountable; (Shreya Singhal vs. UOI 2015). Amit Kotak & Others v. Kent RO Systems Ltd. & Anr. (2016) In relation to the aesthetically pleasing design of its water filter systems, Kent RO Devices Ltd has Mr. Mahesh Gupta (the Plaintiffs) have multiple model licenses under the Designs Act, 2000 (Design Act). The Plaintiffs are quite well-known on several e-commerce platforms, including eBay. When compared to the Plaintiffs' water purifiers, Mr. Amit Kotak (Defendant No. 1, manufacturer water )'s purifier systems have an uncanny resemblance in shape, appearance, and style. Mr. Kotak distributes its products to a variety of clients via the eBay India Private Limited website (Defendant No. 2). - The Plaintiffs had previously notified eBay of the infringement caused by Defendant No. 1 as well as of eBay and several others who were similarly offering for sale and selling water purifiers that were infringing the Intellectual Property Rights of the Plaintiffs before filing a lawsuit for a permanent injunction. EBay informed the plaintiffs that it had taken all the goods that had been criticized of the site.

However, the Plaintiffs discovered that several further infringing items were still being offered for sale and sold on the eBay platform. The Court noted that the Plaintiffs requested eBay to suo-moto screen other materials being housed on its platform and evaluate whether such contents/products amount to infringement in addition to having eBay delete the infringing contents upon receipt of the complaint. According to the Single Judge, requiring an intermediary to confirm for itself that any information posted on its computer resource does not violate any person's intellectual property rights would amount to turning the intermediary into a body that determines whether or not there has been an infringement of those rights. The intermediary is only required under the IT Rules to delete or deactivate information hosted on the portal after receiving a complaint. The Single Judge further concluded that the Plaintiffs must allege and establish conspiracy, abetment, assisting, or inducing within the terms of Section 79 (3) of the Information Technology Act, 2000 in order for a case to be made under that section. This argument was without value since the Plaintiffs were required to allege and provide evidence of a common intention, which they did not do.


Model Law on Electronic Commerce (MLEC) on E Contracts

To reduce legal barriers and improve legal predictability for e-commerce, the Model Law on Electronic Commerce (MLEC) attempted to offer a set of standards that would be accepted globally. Treating paper-based and electronic information equally has increased the efficiency of international trade and made paperless communication possible. The model legislation does not articulate the requirements for electronic transactions in a thorough, code-like manner. Its goal is not to impose rules on all facets of electronic contracting. It employs a constrained framework approach and makes e-commerce possible and easier. If an offer and acceptance of an offer are conveyed using data messages, their legal validity and enforceability cannot be disputed on the basis that they are data messages.

Thus, the use of data messages allowed for the creation of a legal contract under Art. 11. The legal legitimacy of acknowledgment in the form of receiving data messages has also been established. As per Article 12, if indeed the data communication was transmitted by the creator or someone he or she licensed, it is considered to be their work. According to Article 14, the parties may also pre-agree on the data message's reception and acceptance.


Conclusion

E-contracts had made incredible progress on a worldwide scale, especially when compared to the contract era when everything was based on articles. E-contract is now expanding, especially when we talk about India, with the expansion in development and e-commerce. This development process will be supported by the trend toward digital banking, debit cards, and an increase in professional users and web developers. The legislation that covers all aspects of e-agreements is now the most crucial component.

Everything that has to be done digitally, from downloading a little app to creating and releasing one, may be done so.

Data security is the main issue that might arise with e-contracts. The numerous websites that we visit for a variety of purposes have the ability to steal our data at any time for their own financial gain without our knowledge. However, there is no statute that has rules relating to the creation of e-contracts. The IT Act 2000 came with a number of clauses that discussed the e-contract and the sanctions for identity theft, forgery, etc.


Reference

Articles

Subhajit Basu, E Commerce and the law: a review of India’s IT Act 2000,Research Gate, pg 9-11, March 2003.

Online Sources

Sneha Mahawar, All you need to know about Section 65 of the Indian Evidence Act, 1872, Blog ipleaders,(August 13, 2022), http://www. All you need to know about Section 65 of the Indian Evidence Act, 1872 - iPleaders

Astha Dwivedi, Legal issues involved in e-contracts, Blog ipleaders,(August 14, 2022), http://www. All you need to know about Section 65 of the Indian Evidence Act, 1872 - iPleaders

Cases

Shreya Singhal vs. Union of India AIR 2015 SC 1523

Kent RO Systems Ltd. and Ors. v. Amit Kotak and Ors. 2017 (69) PTC 551 (Del)

Statutes

Information Technology Act, Section 79 , Act No 21, Acts of Parliament, 2000

Information Technology Act, Section 2 (1)(w) ,Act No 21, Acts of Parliament, 2000

Information Technology Act, Section section 2(1)(za) ,Act No 21, Acts of Parliament, 2000

Information Technology Act, Section 2(1)(b) ,Act No 21, Acts of Parliament, 2000

Information Technology Act, Section 2 ,Act No 21, Acts of Parliament, 2000

Indian Evidence Act, Section 85A ,Act No 1, Act of Parliament, 1872

Indian Evidence Act, Section 85B ,Act No 1, Act of Parliament, 1872

Indian Evidence Act, Section 65B ,Act No 1, Act of Parliament, 1872

UNCITRAL Model Law on E Commerce, Article 11, United Nation Model, 1996

UNCITRAL Model Law on E Commerce, Article 12, United Nation Model, 1996

UNCITRAL Model Law on E Commerce, Article 14, United Nation Model, 1996



This article is written by Anudhyan Ray of Christ University, Bangalore.

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