E-Contracts

Presented BY: SALEEM S KUJUR

SUDARSHAN SURESH
SAMBHU DAHAL
Introduction

What is a contract ?

A contract is a legally binding

agreement between two or
more persons/parties by
which rights are acquired by one
or more to act or
forbearance on the part
of the other(s).
 Essentials of a general contract
Intention to enter into legal relation
 Proposal
Acceptance
Communication
Consideration
Competency of parties
Remedies for breach of contract
 What is a E-Contract ?
It is a contract entered through the medium of internet
and software :
Like constructs world wide web
Exchange of email stating offers
Acceptance of terms and condition of a
particular transaction.
Software installation
Any E-business
Formal Contracts
 A DEED requirements
(a) In writing
(b) Witness
(c) Signature—Signed, sealed & delivered
e.g. assignment, deed of gift, power of attorney
Some concepts about e-contracts :
Very similar to traditional paper commercial
contracts in which vendors present their products,
prices and terms to prospective buyers. Buyers
consider their options, negotiate prices and terms ,
place orders and make payments .

It can be in the agreement “drafted” and "signed" in

an electronic form .
 continued..
It can also be in the form of a "Click to Agree"
contract, commonly used with a downloaded
software: The user clicks on I agree button to
agree to terms and license of manufacturer .

Since a traditional ink signature isn't possible on

an electronic contract these are authenticated
through electronic signature implemented
through different ways.
Types of E-contracts
 Web Wrap Agreements :
By the way of clicking the
" I agree " buttons online as of E-bay user
agreement , Citibank terms and conditions etc .

 Shrink Wrap Agreements:

By accepting terms and
conditions during software installation from
a CD-ROM etc.
Issues relating to E-contracts
Is it a valid contract ?
Whether e-contracts interpret, adopt and compile
the existing legal standards in the context of
electronic transactions?
Whether e-contracts satisfy the legal requirements of
reduction of agreements to signed documents ?
Would a supplier making details of goods and services
with prices available on a website be deemed to have
made an offer ?
Formation of a Valid Contract
A. Offer
B. Acceptance
C. Consideration
D. Legal intention

offer + consideration
A B
acceptance + consideration

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Offer
A clear statement which can be accepted and a
contract formed.

Promise to build
Contractor Employer
Promise to pay

•Bilateral contract: a promise exchanges

for a promise

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Invitation to Offer
A statement inviting the other party to make an
offer, e.g. advertisement, displaying goods on shelf,
tenders.

Invitation to tender

Submission of tender
Contractor Employer
Acceptance of tender

• Pharmaceutical Society of GB v Boots Chemist

Open shelf—qualified pharmacist—
supervision?
Held: No contract at cashier.
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Unilateral Contract
Unilateral Contracts--a promise exchange for
an act, e.g. rewards.
A advertisement for reward may be an offer.
Cargill v Carbonic Smoke Ball (1893)
Newspaper ad--£100 to anyone caught flu after
using ‘smoke ball’--deposited cash at bank
Held: the ad was an offer.

Promise to reward
A B
Act performed
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 Acceptance
Agreeing to ALL the terms of the offer
If not, it is a counter-offer and destroy the offer.

A Sell TV for $5,000 B

A Buy $3,000 B
A Sell $4,500 B
A Buy $4,000 B
A Buy $4,500 B
A Sell $4,500 B

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 Acceptance
Acceptance cannot be Deemed (Assumed)
Silence cannot amount to acceptance
“If I do not hear from you, I shall presume
that you have accepted.”
Acceptance in a particular form
Yates Buikding v Pulleyn & sons
Option to buy by ‘notice in writing … by registered
delivery’--accepted by ordinary post
Held: Ensuring written acceptance. Reg/ed delivery
was a suggestion, not condition.

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Acceptance
Acceptance must be Communicated
Contract formed at the time & place when offeror
received acceptance.
Act as acceptance, Smoke Ball case

The Postal Rule (exception)

The acceptance is effective at the time of posting.
Apply to acceptance only

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Consideration
The Price Theory
The Burden & Benefit Theory
Book (benefit to B)

A B
$100 (B’s burden)

Consideration must be moved from

promisee.
Purpose: Consideration enables B to enforce
A’s promise.
No consideration--B cannot enforce 17
Consideration

1. Executed Consideration
A sells a book to B; B pays A there & then.
2. Executory Consideration
A sells a book to B & will deliver on Friday;
B will pay on delivery.

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 Ligality
It can be recognized by the fact that is the
contract liable for legal jurisdiction in country if
any of the committers violate the terms and
conditions set by it .
Statutory recognition is provided by laws in
many countries at national and
international level .
 International Conventions &
Foreign Law on E-Business
CMI Rules for Bills of Lading (1990)
UNCITRAL Model Law on Electronic
Commerce (1996)
UNCITRAL Model Law on Electronic
Signatures (2001)
Electronic Communications Act
(2000, UK)
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 INDIAN RULES
 ITA(Information Technology Act) amended in
2008
 Indian Evidences Act.
All electronic contracts are valid contracts as they are
legalized by law and one could be made liable if there
is any infringement with the terms and conditions.
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Liability And Damages:
A party that commits breach of an agreement may face
various types of liability under contract law.

Parties may find themselves liable for contracts which

technically originated with them but without the
actual intent or authority of the party , due to
programming error, employee mistake or deliberate
misconduct were executed.
Digital Signatures :

A digital signature actually provides a greater degree of

security than a handwritten signature.

They cannot be disowned by producer of signature.

Digital signatures enable "authentication" of digital

messages, assuring the recipient of a digital message of
both the identity of the sender and the integrity of the
E-contract.
Conclusion:
E-contracts are well suited to facilitate the re-engineering of
business processes .E-contracts have their own merits and
demerits.

On the one hand they reduce costs, saves time, fasten
customer response and improve service quality by reducing
paper work, thus increasing automation.

 On the other hand, since in electronic contract, the proposal

focuses not on humans who make decisions on specific
transactions, but on how risk should be structured in an
automated environment .
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Therefore the object is to create default rules for
attributing a message to a party so as to avoid any
fraud and discrepancy in the contract.
THANK YOU