This Article is written by Dhwisha Bhatt of Symbiosis Law School, Hyderabad
INTRODUCTION
One of the best advancements in the contracting field is the e-contract. This is a step toward digitizing paper-based contracts[1]. Electronic contracts can improve corporate partnerships by making contracting easier and more dependable. COVID-19 has undoubtedly pushed all countries further toward digitization. Online seminars, webinars, work from home opportunities, and electronic contracts have all become the new norm. The rapid emergence of industrialization, globalisation, and complexity provided a crucial foundation for the advancement of technology and gave rise to the computer era. With the current situation E-contracts can be very viable and a suitable option for the future.
WHAT ARE E-CONTRACTS?
E-Contracts, also known as an electronic contract, is a legal document that is written and signed online. E - Contracts, like traditional contracts, are agreements ratified by two parties[2]. They are legally enforceable papers that are generally used in the context of employment, sales, services, or tenancy.
In a normal contract, we have a promisor and a promise similarly in an E contract the parties are referred to as the originator and the addressee. [3]
According to the IT act, 2008 [4]an originator is a person who distributes, develops, saves, or transmits any electronic message to send, generate, storing, or transmitting it to another person, excluding any Intermediary. And an addressee according to the IT act of 2008 is a person who intends to receive the electronic document but does not include any Mediator.
VALIDITY OF E-CONTRACTS
According to the requirements of the Information Technology Act, 2000 (IT Act, 2000),[5] most importantly Section 10-A, an E-contract is legitimate and is legally executable.
The most important requirement for an E- contract to be legal is conformity with the conditions outlined in the Indian Contract Act of 1872. In addition, electronic contracts will be considered by Indian courts under the terms of the Indian Evidence Act, 1872. The Indian Evidence Act grants contract acknowledgement and the phrase "document" mention any data contained in a computerized record that is written on paper and is maintained and recorded.
Such information satisfies the requirements of Section 65B of the Act[6], and must therefore be enforceable in all hearings without further evidence or presentation of the source before the relevant jurisdiction.
The terms of the Information Technology Act, 2000, offer validity to an electronic contract, specifically section 10-A of the IT Act, which mentions that :
“Where 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 through electronic records, such contract shall not be deemed to be unenforceable solely on the ground that such electronic form or means was used for that purpose.”[7]
Section 4 – Legal acknowledgement of electronic records –
“Where any law requires that relevant data or any other matter be in written form, typewritten, or printed form, then, notwithstanding anything contained in certain law, such requirement shall be deemed to have been satisfied if such information or matter is reproduced or made accessible in electronic form; and accessible to be utilised for future reference”[8]
Section 5: Digital signatures and legal status:
“Where any law requires that information or any other substance be authenticated by affixing the signature of any person, or that any document is signed or bear the signature of any person, such requirement shall be presumed to have been met, notwithstanding anything contained in such legislation. For this section, "signed," with its grammatical variations and related expressions, literally means trying to fix a person's handwritten signature or any mark on any document, and the phrase "signature" shall be understood accordingly.”[9]
ADVANTAGES OF E – CONTRACT
Before consenting to sign an electronic contract, you and the recipient can examine and amend the terms of the contract digitally on a web page.[10] Electronic contracts provide a more collaborative approach in which both parties can collaborate to construct the contract and agree to mutually beneficial commercial activities. E- contracts also save a lot of time as compared to couriers as in the case of E- contracts the offer and acceptance of the contract are done on the spot. E-contracts are also easier to store and can be accessed from the computer within a few minutes without too much hassle.
DISADVANTAGES OF E-CONTRACTS
The major drawback of E-contracts is the security. E-contracts can be heavily misused and can cause great losses to both parties. Other drawbacks include that not every part of the world would the internet be accessible and hence at times it can cause hindrance to forming an E-contract. And since most of the clients would prefer paper contracts because that is what has been followed through the years and it is the trusted form of a contract it becomes difficult to perform the E -contract.
TYPES OF E-CONTRACTS
1) Shrink-wrap contracts [11]
Shrink–wrap contracts are those contracts e often software licencing agreements. When a licensing contract is packed with software, the contract begins when the user tears open the shrink wrap to utilise the product. As we will see, shrink wrap contracts have a distinct benefit over other types of electronic contracts in that their acceptance can be revoked by returning the product.
2) Click-wrap contracts [12]
Click–wrap contacts are those online contracts in which the user indicates his assent by clicking on the ‘ I agree’ button to either buy or download a particular programme.
3) Browse – wrap contracts [13]
Browse Wrap contracts are simply the terms and conditions mentioned on websites or before buying a particular product. When we tick beside the box of terms and conditions we are signifying our assent on those terms.
CONCLUSION
To summarise, while e-contracts save time and money while also overcoming some of the constraints of traditional contracts, there are still numerous obstacles that e-contracts must overcome before they can be considered a viable replacement for traditional contracts. E-contracts have their own set of drawbacks, such as security, privacy, and confidentiality concerns, which must be addressed if they are to be used. The popularity of E contracts is surely increasing with more and more people becoming aware of them. In the USA a company called E-gree allows people who are not from the legal fraternity to built their formal relations and their business by helping them with legal documents and this company has attracted one million dollars invested so far.[14] Physical space needs, maintenance staff, the elimination of the need for couriers to deliver physical copies, and coping with delays are all advantages of digital contracts. E-contracts are the way forward, and just as demonetization in 2016 accelerated the acceptance of digital money, the current era will accelerate the use of e-contracts. According to me E- contracts are therefore the future of not only India but the entire world. With this pandemic only increasing over time physical contracts would get difficult by the day and contracts in this process cannot come to a halt hence E- contracts seems to be the solution for the long term.
[1] E-contracts and its Validity in India, India law offices LLP, ( July 17, 2020) https://www.indialawoffices.com/legal-articles/e-contracts-and-validity-india [2] Daisy Roy, All that you must know about E-Contracts, I pleaders, (Jan 15, 2019) https://blog.ipleaders.in/all-that-you-should-know-about-e-contracts/ [3] Mohd Aqib Aslam, Contract And E-Contract under English And Indian Laws, Legal service India, http://www.legalserviceindia.com/legal/article-2268-contract-and-e-contract-under-english-and-indian-laws.html [4] Indian technology act, 2008. [5] Indian Technology Act, 2000 [6] Section 65b, Indian Evidence Act. [7] Section 10, Indian technology act,2000. [8] Section 4, Indian technology act, 2000. [9] Section 5, Indian Technology act,2000. [10]Shereen Abdin, Electronic Contracts – Pros and Cons, Lawyered, (Oct 1, 2019) https://www.lawyered.in/legal-disrupt/articles/electronic-contracts-pros-and-cons/ [11] Jason Gordon, Shrinkwrap Agreement – Definition, The Business Professor, ( December 3, 2020) https://thebusinessprofessor.com/lesson/shrinkwrap-agreement-definition/ [12] Sharvi Shinde, Online click-wrap Agreements - An Analysis, Legal Services India, http://www.legalserviceindia.com/legal/article-369-online-click-wrap-agreements-an-analysis.html [13] Gizelle Fletcher, Are my browsewrap agreements enforceable, Pactsafe, (Jun 12, 2019) https://www.pactsafe.com/blog/are-my-online-agreements-valid-part-3-browsewrap [14] New App e-gree Creates Legal Contracts for Anyone with a Smartphone,Law.com,( ul 29, 2020 7:15 AM ET)
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