Professional Documents
Culture Documents
Cyber F9
Cyber F9
PROJECT ON
A Critical Analysis of E-Contracts in India and Enforceability with
Respect to Sec-65 of Indian Evidence Act
Under the supervision of—ASST. PROF. MIR JUNAID AALAM
SUBMITTED BY:
GHULAM ALI MALIK
ROLL NO: 20 (SEC A)
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CONTENTS:
Key Words
Abstract
Introduction
Discussion
Conclusion
Bibliography
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Key Words
E-Contracts, electronic evidence, UNCITRAL, IT Act, 2000, evidence act. , Contract, Offer, Acceptance,
Competence, intention of parties, sale
Abstract
Electronic contracts are the contracts which take area via e-trade, without meeting of the events
to the contract. Those contracts are normally very much like the paper primarily based industrial contracts
wherein the industrial transactions are carried out electronically. With the development of era and the
globalization, it has multiplied the presence of e-trade groups for the duration of the sector. Further, the
popularity of a settlement is accorded under the Indian Evidence Act, via which the time period “record”
consists of any records contained in an digital record which is outlined on a paper, saved, recorded or
copied in optical or magnetic media produced by a computer. Such facts are in conformity with the
situations of section 65B of the Act which will be admissible in any proceedings, with none similarly
proof or production of the authentic document earlier than the worried authority and shall be appeared as
an proof of any content of the authentic or any reality stated therein of which direct evidence would be
admissible.
Introduction
Technological advancement has had a great influence over societal life. The world has been witnessing
various new technological advancements which had had impact on human existence, and which will keep
influencing the human existence. In the World Conference on Science1 * * *, it was resolved that, ‘The inherent
function of the scientific endeavor is to carry out a comprehensive and thorough inquiry into nature and society
leading to new knowledge. This new knowledge provides educational, cultural, and intellectual enrichment, and
leads to technological advances and economical benefits. Promoting fundamental and problem oriented research is
essential for achieving endogenous development and progress. Governments through national scientific policies,
and in acting as catalysts to facilitate interaction and communication between stakeholders should give recognition
to the key role of the scientific research in the acquisition of knowledge. Research funded by the private sector has
become a crucial factor of socio-economic development but this cannot exclude the need for publicly funded
research.’
New communication systems, especially digital technology, have replaced the traditional snail-pace systems of
communication. Business communities and consumers are all the time more using computers to transmit and
restore information in electronic form. The information technology (IT) has abridged the time and distance factor in
transacting business. Nowadays, inflow and outflow of information has become instant and momentary.
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One principal contribution of IT is in the field of contract-formation. An agreement between the parties is legally
valid if it satisfies the requirements of the law governing its formation. This is evidenced by its (agreement’s)
compliance to the requirements of the Contract Law. In India, it is S.10 of the Indian Contract Act (ICA) which
provides that all agreements are contracts if they are made by the free consent of parties competent to contract, for
a lawful consideration and with a lawful object, and are not hereby expressly declared to be void. The ICA governs
the ways in which contracts are made and executed in India. It governs the manner in which the provisions (terms)
in a contract are implemented, and (it) codifies the effect of a breach of contractual provisions. Within the
framework of the Contract Act, parties are free to enter into contract on any terms they wish. The ICA also
provides for some limiting factors, subject to which contract may be entered into, executed, and the breach of
which may be enforced. This Act only provides a general framework of principles which govern formation and
discharge of contracts. The rights and duties of parties and terms of agreement are determined by the contracting
parties themselves.
Electronic contracts (e-contracts) are boom out of the need for speed, convenience and effectiveness. The law has
already recognized contracts-formation using facsimile, telex and other similar technology. One may just envision a
contract that an Indian exporter and an English importer wish to enter into. One option is that one party first draws
up two copies of the contract, signs them and sends (through postal or courier service) them to the other, who in
turn signs both copies and sends one copy back. The other option would be that the two parties meet somewhere
and sign the contract. In this age of IT, the whole transaction can be completed in seconds, with both parties simply
affixing their electronic signatures to an electronic copy of their contract. There is no need for delayed couriers and
additional travelling costs in such a scenario.
Discussion
WHAT IS AN E-CONTRACT:-
An electronic contract is, thus, a species of an enforceable agreement created and signed in electronic form—that is
to say, no paper or other hard copies are used. It is not a paper-based contract, but a contract in the electronic form.
For example, X makes (writes) an offer on his computer and e-mails it to a business associate; and later, that
business associate e-mails it back with an electronic signature indicating acceptance; these e-mails, thereby, give
rise to a contract. Similarly, an e-contract can also be in the form of a ‘Click to Agree’ contract, generally used with
downloaded software: The user clicks an ‘I Agree’ button on a page containing the terms of the software license
before the transaction can be completed.
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The expressions ‘e-contracts’ and ‘online contracts’ are synonymously used; however, it must be noted that e-
contract is a broader expression which includes within its ambit ‘online contract’. This is because e-contracts may
be concluded by exchange of any type of electronic record, like MP3 audio file, Short Message Service (SMS),
Multimedia Message Service (MMS), e-mails, etc by means of a mobile phone or similar devices. They are,
generally, used to connote contracts (including all their implications) that emerge on account of transactions
involving computer networks, and more particularly, real time transactions. The said expressions do not necessarily
restrict themselves to a transaction over the internet. Besides the internet, they include transactions involving any
form of a computer network.
In an e-contract, all or some of the activities are carried out by electronic means. Thus, one of the advantages of an
e-contract is that it overcomes the delays involved in the manual system and personal biases. This is one reason
why most of the web services technologies support the coordination of activities between parties and, thus, shore
up the e-contracts.
The fundamental principles of contract law have been developed over the years through the judicial decisions
of the courts. These principles apply to all contracts notwithstanding whether they are formed electronically, orally
or through paper based communications. Many of the issues that arise for consideration relate to how these
conventional contract law principles will apply to modem forms of technology. As in every other contract, an e-
contract also requires the following necessary elements:
1. Offer:
Like every other case, an offer is to be made to form an e-contract. In several transactions (whether online
or conventional), however, the offer is not made directly one-on-one. The consumer ‘browses’ the available
goods and services displayed on the vendor’s website and then ‘chooses’ what he would like to purchase.
2. Acceptance:
The offer needs to be accepted. The acceptance is more often than not undertaken by the business/
vendor after the offer has been made by the consumer in response to the invitation to treat. The offer is
revocable at any point of time before the acceptance is made.
3. Lawful Consideration:
There has to be lawful consideration. Any agreement formed electronically, to be enforceable by law,
must have lawful consideration. For instance, if an auction site facilitates a contract between two parties where
one person provides a pornographic film as consideration for purchasing a video camera, then such an
agreement is void.
There has to be an intention to create legal relations. If there is no intention on the part of the parties to
create legal relationships, then no contract is likely to take effect between them. By and large, agreements of a
domestic or social nature are not contracts and are, therefore, not enforceable.
All the parties to the contract must be lawfully competent to enter into contract. Agreements entered
into by incompetent persons, such as, minors, lunatics, insolvents, etc are void.
6. Free Consent:
There must be free and genuine consent. Consent is said to be free when it is not caused by
coercion, misrepresentation, undue influence or fraud. To be precise, there must not be any subversion of
the will of any party to the contract to enter into such contract. Generally, in online contracts, especially
when there is no active real-time interaction between the contracting parties, e.g., between a website and
the customer who buys through such a site, the ‘click through procedure’ ensures free and genuine consent.
7. Lawful Object:
The object of the contract must be lawful. A contract presupposes lawfulness of the object of
contract. For that reason, an agreement for selling narcotic drugs or pornography films online is void.8-
Certainty and Possibility of Legal Performance: There must be certainty and possibility of performance. A
contract, to he enforceable, should not be vague or uncertain or ambiguous; and there must be possibility of
its performance. A contract, which is impossible to perform, is void, e.g., where a website promises to sell
land on the moon. Similarly, an agreement, the meaning of which is not certain or capable of being made
certain is void.
Kinds of E-Contracts:-
1. Browse Wrap Agreement
This agreement is considered as a browse wrap agreement that's supposed to be binding upon the
contracting party with the aid of the usage of the website. those encompass the consumer policies and
phrases of service of websites along with Flipkart or E-bay and are in the shape of a “terms of use”, a
“person settlement” or “terms of service”, which can be used because the hyperlinks at the corner or
backside of website.
These contracts are the license agreement via which the terms and conditions of the agreement are
enforced upon the contracting events and are commonly present on the plastic or in manuals
accompanying with the software program merchandise which the customers buy.
Those agreements require the person to provide his consent to the terms and situations which are
known as end person settlement and governs the licensed usage of the software program by using clicking
“ok” or “I agree” button. There are positive sorts of take a look at which guarantees that the phrases of
the settlement are binding upon the contracting parties.
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Execution of E-Contracts:-
The popularity and law to E-Contracts is provided by way of numerous laws inclusive of Indian
technology Act, 2000 and the Indian Evidence Act, 1872. The provisions in the I.T. Act point out about
the attribution, acknowledgement and dispatch of digital statistics and secured electronic strategies. The IT
Act recognizes the fundamental capabilities of the agreement which include the communique of the
proposals, attractiveness of proposals, revocation of proposals and acceptances, because the case may be
which will be expressed either in digital form or by means of an digital record. Further, the popularity of
a settlement is accorded under the Indian Evidence Act, via which the time period “record” consists of
any records contained in an digital record which is outlined on a paper, saved, recorded or copied in
optical or magnetic media produced by a computer. Such facts are in conformity with the situations of
section 65B of the Act which will be admissible in any proceedings, with none similarly proof or
production of the authentic document earlier than the worried authority and shall be appeared as an proof
of any content of the authentic or any reality stated therein of which direct evidence would be admissible.
Electronic Signature
The information technology (amendment) Act, 2008 has substituted the term „digital signature‟ with
the time period „electronic signature‟. A virtual signature is the generation specific and is irreversibly
specific to each the report and the signer. but, an electronic signature is generation independent and well
known in nature. but, there's no widespread for electronic signature. it may be both a typed name or
digitized photograph of hand written signature. The substitution of the time period „digital signature‟ with
„digital signature‟ is meant to make bigger the scope of E-contracts in an e-commerce international.
Validity of E-contracts
in India The Indian contract act 1872 has recognized the traditional agreements which consist of
the oral contracts made by the loose consent of the contracting events who are able to contract for the
lawful consideration with a lawful object and are not expressly declared to be void. subsequently, there
may be no provision on this Act which prohibits the enforceability of electronic agreements provided that
the crucial elements of the valid settlement have to be found in such agreements. The free consent is
considered as the main characteristics of the legitimate contract. commonly, there may be no scope for
negotiation on E-contracts.
The requirement of ‘offer and acceptance’ in contract formation with new modes of communication is as
much essential as it is essential in contract formation through postal communication. In the twentieth and twenty-
first centuries, these new modes embraced telex, fax, e-mail and the internet. The application of the offer and
acceptance rules to these more recent electronic technologies will go on with to operate effectively. There are
nonetheless a number of unanswered questions in relation to the application of the offer and acceptance rules to
these new means of communication, and in this Chapter the researcher sets out what he thinks these questions are
and tries to find answers to them.
The practical importance of the offer and acceptance rales is beyond question. There are quite a few reasons why
are the offer and acceptance rales important in practice. Firstly, the offer and acceptance rales provide the answer to
the question whether or not a contract is formed, at all; secondly, they also tell us when a contract is formed;
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The advent of the internet as a means of facilitating contract formation does not, at first blush, present a
situation different from that applicable to a facsimile or telex. An e-contract may be created either through an
exchange of e-mails or by completion of a document on an internet web-site which is submitted to another party
electronically. There are three broad classes of subject-matter for e-contracts:
Goods are ordered over the internet with payment via the internet, hut delivery occurs in the usual way;
Goods, such as software, can be ordered, paid for and delivered online; and3. Supply of services: Examples of
this category include electronic banking, sale of shares, financial advice, or consumer advice.
While it may be possible to view these methods as presenting a modern dimension to the accepted methods of
contract formation rather than requiring any particular changes to the law, the electronic medium presents some
particular issues arising from their electronic form. There are various ways in which online contracts can be
concluded. The important ones are as follows:
The simplest e-contract is concluded by the exchange of text documents via electronic communications such as
e-mail. Offers and acceptances can be exchanged totally by e-mails, or can be combined with paper documents,
faxes, telephonic discussions, etc.
The vendor/ supplier can offer goods or services (such as, air tickets, software, etc) through his website. The
consumer, in such cases, places an order by completing and transmitting the order-form provided on the website.
The merchandise may be physically delivered later (e.g, in case of outfits, music CDs, etc) or be immediately
delivered electronically (e.g., in case of e-tickets, software, etc).
3. Online Agreements:
In some cases, users are required to accept an online agreement in order to be able to avail of the services e.g.
clicking on ‘I accept’ while installing software or clicking on ‘I agree’ while signing up for an e-mail account.
thus, reduces paperwork and the potential for human errors. In this type of contracts, in contrast to the above
methods, there is an exchange of information and completion of contracts between two computers and not an
individual and a computer. The conventional fore-runner of EDI was the postal services
It is possible for computer users to instruct the computer to carry out transactions robotically. For instance, in
today’s supermarket, the computer updates its inventory as items are scanned for sale. When the stock of an item
falls to a predetermined level, the computer is programmed, without human involvement, to contact the computer
of the supplier and place an order for replacement stock. The supplier’s computer, exclusive of human intervention,
accepts the order and the next morning automatically prints out worksheets and delivery sheets for the supply and
transport staff.
These electronic agents are programmed by and with the authority of the purchaser and supplier. The legal
status of electronic agents has not been clarified by the courts, but the most common view is that like any other
piece of equipment under the control of the owner, the owner accepts responsibility.3 The computer is a tool
programmed by or with a person’s authority to put into operation their intention to make or accept contractual
offers.4According to Russell and Norving, ‘An agent is anything that can be viewed as perceiving its environment
through sensors and acting upon that environment through effectors. A human agent has eyes, ears, and other
organs for sensors; and hands, legs, mouth and other body parts for effectors. A robotic agent substitutes cameras
and infrared range finders for sensors and various motors for effectors. A software agent has encoded bit strings as
its precepts and actions.’5 Wooldridge and Jennings6 define an electronic agent as, ‘a hardware or software-based
computer system that enjoys the following properties: autonomy (capacity to act without the direct intervention of
humans or others), the capacity to interact with agents or humans, the capacity to perceive their external
environment and to respond to changes that are coming from it, and the capacity to exhibit goal-directed behavior
by taking the initiative.
record occurs at the time when it enters the computer resource designated by the addressee or, where no computer
resource has been designated then to the computer resource of the addressee. It is only where a computer resource
has been designated by the addressee but the electronic record is sent to a computer resource other than the
designated one, it can be said that the addressee has knowledge of the electronic record because Section 13
provides that in that case the receipt of the electronic record occurs at the time, in such situation, when it is
retrieved by the addressee. The second alternative is to treat the communication of an electronically made offer as
complete when the offeror receives acknowledgment of the receipt of the offer. One may argue that
acknowledgment of receipt sent by the offeree implies knowledge on his
part, however it may not be always so for two reasons: (a) Section 12 provides that where the originator has not
agreed with the addressee that the acknowledgment be sent in a particular form or method, then the addressee, inter
alia, may use an automated process for sending acknowledgment which means, in a given situation, the addressee
may not be aware of the electronic record of which acknowledgment of receipt has been sent (b) receipt of the
electronic record may occur at the time when the message enters the computer resource, irrespective of whether the
message is intelligible to or usable by the addressee.
The above discussion leads to the conclusion that the knowledge element necessary for determining the time for
communication of offer in postal communication is irrelevant in case of electronic communications.
The communication of offer is, however, complete when the acknowledgment is received by the offeree,
notwithstanding the fact that the acknowledgment has been sent by the automated process as it can be attributed to
the offeree by virtue of Section 11 that recognizes theory of attribution. The rules relating to revocation of offer
provided in Section 5 of the Contract Act apply mutatis mutandis to offers made electronically. The offeror will be
free to revoke his offer at any time before its communication of acceptance is complete and this legal position
provided in Section 5 of the Contract Act has not been changed by the IT Act. The rules provided in Section 4 of
the Contract Act for communication of acceptance have been rendered inapplicable by implication in case where
acceptance is communicated electronically and it can now be said that the communication of acceptance is
complete at the time when its acknowledgement is received by acceptor in the sense as provided in Section 12 of
the IT Act and, quite naturally, the time when communication of acceptance is complete will vary depending upon
the given situation, but not in the sense as provided in Section 4 of the Contract Act. The
communication of acceptance is complete against the acceptor as well as the offeror at the time when the
acknowledgment enters into the designated computer resource or where no computer resource has been designated,
the computer resource of the addressee. There will be no time lag, in these cases, between dispatch and receipt of
the acceptance. Both dispatch and receipt will be 'simultaneous and a complete contract arises when
acknowledgment enters in the computer resource as stated above. This means that there will be no scope for
revocation of acceptance in these situations. Section 5 of the Contract Act which provides provision for
revocation of acceptance will be inapplicable in these situations. Different rules will, however, apply where
acknowledgment has been sent to a computer resource which is not the same as that designated by the addressee. In
this case, communication of acceptance is complete as against the offeror when the acceptor has dispatched the
acknowledgment provided in Section 12 of the IT Act and as against the acceptor when it is
retrieved by the offeror. This interpretation is possible because dispatch and receipt is not simultaneous as is the
case in above two situations. Thus here is a scope for revocation of acceptance which is possible at any time
before acknowledgment is retrieved by the offeror and Section 5 of the Contract Act will be applicable. In this
situation, it is quite possible that an acceptance message could be retrieved at the same time as a message
revoking that acceptance where acceptor chooses the same method for communicating revocation which was used
for communicating acceptance. But unlike Section 4 of the Contract Act, complete contract will come into
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existence only when acceptance is retrieved and not when the acceptance is dispatched. This interpretation is based
on the rationale on which Section 13 of the IT Act rests. Section 5 of the Contract Act will also be applicable in
those situations where acknowledgment for one reason or the other has not yet entered into
the computer resource. This includes the possibility where dispatch of the acknowledgment has taken place within
the meaning of Section 12 of the IT Act, i.e. acknowledgment of acceptance has entered into the computer resource
outside the control of the acceptor but is still on the system of the intermediary and is yet to enter the designated
computer resource or the addressee's computer resource where no computer resource has been designated. Another
possibility will be where acceptance does not enter into the computer resource in the sense as understood in Section
14 of the IT Act due to the malfunctioning of the computer resource.
prove the contents of files for the reason that file is absent, the truth or accuracy of the oral proof can't
be compared to the file and to show the contents of a report, either primary or secondary evidence is
necessary.
in the case anver basheer v .p.k basheer AIR 2014 SCW 5695 dated on 18 September 2014 the SC
mentioned that “there may be a revolution within the way that proof is produced earlier than the
courtroom”. while electronically saved information become dealt with as a document in India before
2000 , secondary evidence of these digital „documents‟ turned into adduced thru revealed reproductions or
transcripts, and the authenticity became licensed. The signatory could pick out signature in courtroom and
be open to cross examination with the aid of meeting the conditions of each sections 63 and 65 of the
evidence Act. whilst the creation and storage of digital records grew more complicated, the law had to
alternate more notably.
Section 10 A of the act gives the legal representation to legality and enforcement of E-contracts
under IT act 2000. It gives that “were in contract formation, communication of proposal, the revocation of
the proposal and acceptance as the case are expressed in electronic form or by electronic record . Section
10 A was inserted in IT Act 2000 by the Information Technology (amendment) Act 2008. Section 4 says
Law recognition of electronic records.
where any law presents that statistics or another count number will be in writing or within the typewritten
or published shape, then, however anything contained in such regulation, such requirement shall be deemed
to were glad if such records or remember is (a) rendered or made available in an digital form; and (b) reachable
on the way to be usable for a next reference. Section 11 says Attribution of digital statistics.-An electronic
report shall be attributed to the originator, (a) if it changed into sent by means of the originator himself; (b)
via a person who had the authority to act on behalf of the originator in respect of that digital record; or (c)
through an information machine programmed via or on behalf of the originator to function robotically.
Section 12 Acknowledgement of receipt. 1. wherein the originator has no longer 22 [stipulated] that the
acknowledgement of receipt of electronic document receive in a specific form or by a particular technique,
an acknowledgement can be given via (a) any communique via the addressee, automatic or otherwise; or (b)
any behavior of the addressee, enough to suggest to the originator that the digital file has been received.
For the security of e contracting in cyberspace such matters must be recollect that in spite of recent
improvement in assessment technique, many uncertainties nevertheless remain which effect on filtering junk
mail strategies and test the validity of unsolicited mail filter evaluation techniques. here we're going to
suggest numerous typical filtering techniques and suggest our paintings to well-known them. So the
subsequent time you uninteresting click on an "I agree" button without even worrying to see the terms or
hurriedly tear the wrap of software CD being least interested approximately the phrases typed on it
"suppose twice"! they're all are legitimate contracts and you can be made answerable for the terms and
conditions laid down there.
It may be stated that electronic contracts are almost identical as different hard copy contracts as a
ways as its evidentiary cost is involved and in case of any discrepancy there are sure stipulations that fill
the lacunae. All digital contracts are legitimate contracts as they are legalized by means of the statistics
era Act and one could be made accountable if there is any infringement with the terms and situations.
finally many amendments have been made so that you can reap conceptual readability.
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Sec 73 and Sec 74 of the Indian Contract Act, 1872 deals with the rules regarding the remedy of damages on breach
of contract. The person whose rights are infringed by the breach of contract may bring an action for damages or
compensation in terms of monetary value for the loss suffered by the party. There are two main aspects to be
considered when any action of damages i.e remoteness of damage and measure of damage. Sec 73 to 75 provides
rules regarding the assessment of damages based on the famous case Hadley vs. Baxendale. According to the rules
laid down in this case, there can be damages which naturally arose on the usual course of things from such breach
of contract and can be called ordinary damages and secondly, damages for loss arose from special circumstances i.e
special damages. There are also other kinds of damages mentioned in the Act such as nominal damage, pre-
contract expenditure, compensation for mental agony and liquidated damages. Nominal damages are those
substantial damages awarded by the Court in recognition of right of the aggrieved party in cases where the party
has not suffered any monetary loss on the breach of contract. Whereas, pre- contract expenditure may be recovered
as damages if such is within the knowledge of the parties. Liquidated damages are those pre-determined damages
decided by the parties at the time of formation of the contract i.e amount of compensation payable in the event of
breach of such contract.
When a person has done some work under a contract and the other party repudiates the contract or at the occurrence
of an event that makes further performance of the contract impossible, the party who has performed his work can
claim remuneration for the work already done. And under such circumstances the party can file suit upon quantum
merit and claim for the value of work he has done.
CONCLUSION:-
An online contract is designed and enacted with an aim to provide security to online transactions. It is formed
to check frauds to promote and build confidence in genuine online transactions and to give a legal status to the
concept of digital signature. Online contract is a much efficient concept in the interest of time and money in
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comparison to the traditional method of paper and writing contract. But to keep a pace with the fast advancement of
the technology, a separate legislation in regard to electronic or online contract has to be enacted in India.
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