E-CONTRACTS AND THEIR GROWING POPULARITY IN INDIA
E contracts are business contracts that are organized in a specific way. A contract has a viable impact on our daily lives since we live in an era where everything is just a click away, from purchasing shoes to ordering food, from buying stocks to exporting things overseas. As a result, the Indian Contract Act, 1872 defines a contract as an “agreement enforceable by law.” However, the above definition does not fully apply when defining the term ‘e-contract,’ as it encompasses a broader scope than traditional contracts and can be defined as any binding agreement between parties with a lawful object and consideration that is reached through electronic means such as email, MP3 audio files, multimedia messages, and so on. Because the lawmaker has neglected to define e-contract in any statute, it is assumed that the public understands it.
Our modern society is based on an economic structure that is mostly dependent on contract mechanisms. Our industrial and service civilization is currently transitioning to a more modern information society. The rising digital economy is one of the most crucial markers of this shift. However, without the economic community’s trust in electronic contracts, the new economy would be unable to reach its full potential, and the benefits to our society will lag behind the capabilities of new technology. Either we can increase trust in technical solutions for electronic contracts or we must develop a new paradigm for the digital exchange of goods.
It is unquestionably easier to develop a technology solution for legally valid Electronic Contracts than it is to rewrite a centuries-old legal procedure. On the other hand, a legal system developed thousands of years ago lacks the required foundations to incorporate modern communication methods. To enable legally binding Secure Electronic Contracts, we may need to reconsider and enlarge our contract legislation (Seco).
This study aims to find a solution for both the technological and legal aspects of this debate. On the one hand, it will highlight the issues that arise when contracts must meet the standards of current contract law, as well as provide some suggestions for how contract law might evolve.
Contract law is founded on the notion that a contract is a legally binding agreement between two or more parties. A contract like this can be used as proof of liability acceptance. However, current contract law recognises unilateral contracts that bind only one party (e.g. a donation contract). However, the focus of this study will be on contracts between two parties.
The modern definition of a contract is an agreement between two or more parties to create legal responsibilities between them. This presupposes the exchange of concordant declaratory acts between the parties. The acceptance of an offer, according to modern contract law, satisfies this prerequisite.
One of the most important aspects of a contract is the offer. It expresses one party’s desire to take action. The offeror is the one who makes the offer. If no one accepts the offer, the declaration will have no legal consequences. The offeree is the party who accepts the offer. This allows us to specify the two roles in a contract: the offeror and the offeree.
In a legally correct sales contract, the buyer assumes one of these roles, while the seller assumes the other. These two types of roles have no predetermined relationship. Both the offerer and the offeree have the option of turning to a buyer or a seller. It depends on whether the client requests that the vendor sell him a subject or if the vendor requests that the customer purchase a subject.
Until the offeree answers to the offer, the offeror is legally committed to his offer in its current form. That is to say, if the offeree accepts the offer, a legally binding contract is formed. Of course, an offer does not last indefinitely – It is permissible for the offeror to assume that the offeree did.
CONTRACTING PROCEDURE ASSISTANCE:
1. In order to express offers, an instance of the document is created with only one offeree signature. A timeframe for the offer’s validity is also established.
2. The offerer has two options: he can accept the offer with a second signature, in which case the offer becomes a contract, or he can decline the offer. He may also respond with a counter-offer. In that instance, the first version is saved for archival purposes, and a new offer document containing the revised proposal is created.
Step two can be done as many times as necessary until a valid contract is made or no fresh counteroffers are generated within the specified time frame.
Each phase of the contracting process is documented by a document that complies with legal requirements using the approach outlined above. The entire package of associated legal documents is archived as a single entity, and the process can be revisited at any time.
SUB-PROCESS FOR ENFORCING CONTRACTS:
A methodology for developing an e-contract is outlined in the following sample process:
1. Each party can reason and identify external factors that may affect contract enactment, i.e., those factors that may violate the rules specified in the contract description, based on the contract requirements. For example, the supply of parts and their pricing affect computer system assembly; the leased-line provider affects leased-line installation.
2. Each party can select the external type of (cross-organizational) data requirement in order to enforce the contract based on the external elements available. Prices and delivery dates for missing parts (from parts vendors), lease-line installation dates (from lease-line provider), and other factors should be tracked to ensure successful contract implementation.
3. The parties then ask their business partners to incorporate these data objects in their work-flow views, as well as the rules for sending these data objects in response to triggering events (such as update to these data items). Valid requests should usually be approved and added to workflow views. The data object “lease-line installation date,” for example, should be included in all parties’ workflow views. Dickson Computer Systems should request that any changes to the lease-line installation date be communicated to the lease-line provider. Similarly, the end-user may request that Dickson Computer Systems advise him or her of any changes to the lease-line installation date
Each party may devise a computer-assisted or automatic sub-process to manage these events in order to enforce the contract’s terms based on the additional procedures included in the prior services. For example, if the lease-line installer changes the installation date after Dickson Computer Systems has set a deadline, Dickson Computer Systems should reject the modification or switch to a different provider. If, on the other hand, the revised installation date is still within the deadline, Dickson Computer Systems can initiate a chained reaction to notify the end-user.
As a result, information crucial to contract enforcement, such as availability, pricing, lead-time, and so on, is visible through effective E-ADOME event-publish-and-subscribe methods in various workflow views.
DISTINCTION BETWEEN E-CONTRACTS AND TRADITIONAL CONTRACTS IN A COMPARATIVE STUDY:
The importance and part of the agreement did not change in the online company, but the form of agreement did:
1. The earth’s agreement is extraordinary. Traditional contracts took place in the real world, where the two parties could negotiate with counsel, whereas electronic contracts took place in the virtual world, where the two organisations would never meet each other when all was said and done, in electronic robotised exchanging, or even individuals can’t decide if the exchange is moderate. Their identity is based on a secret key that distinguishes proof or an accreditation body.
2.Contracts were included into various sections of the transformation. Contract creation and the piece of the section into driving conditions are unique, as is the offer and sense of obligation about the season of dispatch and receipt of the agreement.
3.The agreement’s type has changed. Electronic contract data is incorporated in the information transmission, and there is no distinction between firsts and duplicates, thus traditional methods of signing and sealing cannot be used.
4.Gatherings have extraordinary rights and obligations under the agreement. There was not only a special type of agreement arising from the formal rights and commitments in the electronic contract, such as computerised marks legitimate relationship, but there was also a special type of agreement developing from the formal rights and commitments in the electronic contract. Some in customary contracts don’t give the rights and commitments in the electronic get that important, such as data disclosure obligations and insurance of protection commitments, enough weight in the substantive rights and commitments of legal relations.
5.The electronic contract execution and installation of the more traditional contract’s multidimensional structure.
6.The fact that electronic contracts are now firmly associated with contract law has had a significant impact. Protected invention law, for example, and the law of proof.
E-CONTRACTS IN INDIAN CONTEXT:
Indian e-commerce is booming, thanks to rising customer demand for a wide range of products from a global pool. In terms of legal matters of company, a contract plays a critical role and is the most sensitive and crucial document. E-contract is a result of the country’s developing electronic commercial operations. Technology advancements, computer programmes, and the internet have reduced the communication barrier, allowing these contracts to be widely accepted.
E-contracts have a number of benefits over regular contracts. Parties, lawful object, lawful consideration, and other essentials for the formation of legally valid electronic contracts are included in the basis of such contracts. The Indian Contract Act of 1872 controls traditional contracts, although it has flaws in terms of regulating electronic transactions. With the passage of the Information Technology Act of 2000, some of these difficulties, such as formation and signature legitimacy, were resolved. This article provides a detailed description of E-contracts, as well as current challenges and a study of their enforceability in our country. This knowledge will aid in enshrining the difficulties that electronic contracts present, as well as providing judicial perspective on these instances.
E-CONTRACT’S PROBLEMS INCLUDE THE FOLLOWING:
The concept of the virtual world has influenced trade in a number of countries, including India. Easy access to the internet, fax, computer programmes, and smart phones has served as the lifeblood of our country’s e-commerce industry. The Information Technology Act of 2000, which was enacted in 2000, provides a legislative foundation and governance for it. However, because nothing in this world is perfect, this statute has some flaws when it comes to raising difficulties in the country regarding these e-contracts.
1. JURISDICTIONAL CONFLICT
Because paperless transactions, such as e-contracts, are borderless, determining the jurisdiction, or the extent of the court’s authority over any litigation or appeal in the event of e-contract violation, can be problematic.
The originator’s place of business shall be assumed to be the place where the information was dispatched, and the addressee’s place of business will be deemed to be the place where the information was received, according to Section 13(3) of the Information Technology Act of 2000.
This means that the location of the computer sources via which information was sent and received has no bearing on the case’s jurisdiction. This section, however, restricts the authority granted by Section 20 of the Code of Civil Procedure of 1908. As stipulated in Section 20(c), the suit can be filed in the court whose local jurisdiction the cause of action has arisen. As a result, it presents the question of court jurisdiction, as a cause of action in an e-contract may arise at the location where the electronic information was dispatched, regardless of the fact of the principal place of business.
The Allahabad Court addressed the question of jurisdiction in the case of P.R. Transport Agency vs. Union of India & others, holding that the contract acceptance was sent via email and received in Chandauli (U.P.) and that the petitioner’s principal place of business was in Varanasi (U.P) As a result, the present case falls under the jurisdiction of the state of Uttar Pradesh.
Because electronic transactions have no limits, dealing with the jurisdictional issue has become complicated, especially when both parties are located in different parts of the world. The current e-contract laws has failed to answer questions such as which country has jurisdiction in the event of a disagreement, which law would be employed to resolve the dispute (suppliers or customers), and how the decision will be enforced.
2. CONTRACTING PARTIES
Transactions in an electronic contract take place between parties that have never met before. Both contracting parties are at risk as a result of this. In order for a contract to be valid under section 11 of the Indian Contract Act of 1872, the parties must not be minors, lunatics, or otherwise disqualified by law. However, when executing an e-contract, the main concern is the parties’ competencies. Minors can quickly enter into contracts or browse wrap contracts on the website using clickwrap. As a result, it is the websites’ legal responsibility to guarantee that the party contracting is competent under the Indian Contract Act of 1872. To establish the competency of the party, online websites have devised a variety of techniques, including signing up to the site, in which the person submits personal information, including their birth date, confirming to the website that the party has the legal capacity to enter into the contract. It is sometimes accompanied with a dialogue box with photos in which the user is expected to identify objects in order to ensure the party’s craziness. Despite these measures, the enforceability of e-contracts is in doubt due to a lack of comprehensive laws to address the issue.
3. SIGNATURE AUTHENTICATION
Because the Indian Contract Act of 1872 recognises both oral and written contracts, it is not necessary for the parties to sign a valid contract. In traditional contracts, the signature shows the parties’ intent to form the contract and has more legal weight in the eyes of the law. Certain statutes, however, require both parties to sign the contract, such as the Indian Copyright Act, 1957, and others. Because an e-contract formed by electronic means cannot be signed by the parties in the usual manner, it must be signed electronically using an electronic signature or digital signature as specified in Section 3-A35 or Section 36. However, the main disadvantage is that it does not support electronic signatures.
Documents such as:
a) Negotiable instrument (other than a cheque)
b) Letters of Power of Attorney
c) Trust Deed
d) Real Estate Documents
These are documents that must be physically signed by the parties, and the Information Technology Act of 2000 does not apply to them.
4.LOSS AS A RESULT OF A TECHNICAL ERROR
E-contracts are documents that are entered into and stored in the virtual world by the parties using electronic communications. However, information stored in the world, like paper transactions, is not secure. Even if it is assumed that anything that enters the digital world always exists and is never lost, there are no administrative, legal, or judicial procedures in place in the event that all or part of the information is lost due to a technological failure.
It is reasonable to conclude that electronic contracting has evolved as a significant sort of contracting arrangement, and its value has increased significantly over time. The IT Act of 2000 and the Electronic Commerce Act of 1998 were passed by the Indian legislature with the purpose of controlling the rights and liabilities of groups in the event of Electronic Contracts. These demonstrations are set up in a way that encourages the establishment of electronic contracts. The offer and acknowledgment made by information communications will be taken seriously. In any case, the demonstration’s arrangements must be read in accordance with the Indian Contract Act,1872, and the agreement’s point and goals must not be in conflict with the demonstration’s arrangements.
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