Technology advancement has changed the mode of business. Market has entered into new era of e-commerce, where exchange of goods and services takes place through internet as intermediate. To protect the interest of producer and consumer both they enter in contract online known as e-contract. There are different types of e-contracts varies in way of the offer made. There are many provisions in India which supports the e-contract. The contract act,1872, the information technology act,2000 and the evidence Act,1872 are the significant legislations which determines the legality of E-contract, but still issues arises in capacity to contract, free consent and decision on the court jurisdiction. Though Indian laws addresses e-contracts adequately, the challenge before them is to keep abreast with the evolving technologies.
Introduction: With the advent of technological era, the methodology of doing businesses are changing. The contacts are the most significant part of all the business dealing from sale of thread to the sale of building. Contracts are the ways through which both the parties feel secure. The advancement in this part is known as E-contracts.
Contacts are the agreement between two or more parties enforceable by law, in this one person accepts the offer made by the another in order to do or to abstain from doing something. There are some essential elements which are necessary to be fulfilled. Whereas the contracts which come into existence through net as a medium are E-contracts. There are judicial provisions available which mention regarding the nature of E-contracts and secured electronic procedures.
E-commerce is buying and selling of goods and services over the internet. This include commercial transactions which are related to both individual and organization. E-commerce websites are one of the examples in which dealing takes through E-contracts takes place.
E-contracts: E-contracts are the agreement among the parties through the use of the electronic mean, the interface between the offerer and the offeree has been changed. It holds the similar essential elements of the contracts; they negotiate for the lawful consideration. In physical contracts people meet face to face and there are comparatively less chances of mistakes than in if they are far away and contracting with each other through net as medium. The digital contracts can be concluded within seconds. The E-contracts are regulated by various laws Information Technology Act, 2000 and the Indian Evidence Act, 1872.
E-contracts are based on the principle of uberrimaifidie (utmost good faith) in which there is no physical meeting of the parties but one party relies on the information supplied by another party and signifies his willingness.
Of traditional contracts: In earlier times, like-minded people join together and form groups and societies on the basis of contracts. Hindus were having Hindu law of contract and Muslims were having Muslim’s law of contract. When the Britishers came to India they prepared contract of law for Indians in order to prevent conflicts among different countries. The draft committee under the leadership of sir John Romilly presented the draft contract law (1866) for India. This was enacted as The Act 9 of 1872 on 25 April 1872 and the Indian Contract Act, 1872 came into force with effect from 1 September 1872.
Of e-contracts: with the advent of technological revolution, the legislatures felt need to have provisions to regulate the contracts which are concluded on the electronic media. Justice Faizal Ali went on survey, submitted the report and refused to make any changes in the existing law of contract in order to include electronic devices under its jurisdiction. The law was formed on it known as electronic commerce act 1998.
Offer- when a person offers to perform, their respective promises and based on this terms and conditions if the offeree accepts it then it becomes a legal binding. In various dealings (conventional or online) face to face offers are not made. The consumer chooses the products from vendor’s website. The contract’s mode may vary from deal to deal.
Acceptance: when the offeree signifies his interest in the offer made by offerer and accepts it unconditionally. In some online contracts the consumer just clicks on “I Agree” icon in order to communicate the acceptance of the terms of the vendor. In some cases, the consumer selects the item from the website and when he purchases it, it is concluded that the offer is accepted and virtually contracts came into existence.
Lawful consideration: In every contract which is enforceable by law both parties give and take something is known as consideration. This consideration should not be illegal. For example- in India, person could not provide bitcoins in consideration of purchasing an MP3.
Intention to create legal relations: there should be intention to create legal relation without it the contract is void. For example: if the makeshift website only shows the products, no purchasing information is given, the “download” button is given, the consumer assumes that it is free and comes into contract unintentionally while clicking on it. Ideally proper information should be provided to the customer.
Competency of the Parties: the parties with whom the contract is to be concluded must lawfully competent to enter into the contract. Any agreement with minor, unsound mind, insolvents is void. Free consent: when there is absence of coercion, misrepresentation and fraud then the consent is said to be free. There should not be any agitation of the will of any party to enter into contract. For example- on website the click through process to buy something ensures free consent.
Lawful Object: the objective of the contract must not to perform illegal activities. It should be lawful. For example- an agreement for selling narcotic drugs is void. Certainty and Possibility of Performance- the contact should be based on certainity, it should not be ambiguous. The contract which is impossible to perform is said to be void.
E-mail contracts: contracts can be established through emails in which both the parties signify their intentions which can be treated as legal binding. The offer sends the offer to the person on his address and the offeree gives his acceptance by communicating it through email. Earlier the English courts have been in favor of postal rule than acceptance rule because both sides will be waiting for confirmation. Postal rules are applied to electronic mails.