Electronic(e) Contracts: Current Trends

& Challenges

BADAL WADHWANI

PGDM CORE

1st Year Section - ‘A’

19DM056
Electronic(e) Contracts: Current Trends & Challenges

ABSTRACT

As we belong to the 21st century era where electronic form

is gaining pace and it is drastically changing all sectors of

the economy. The days are gone that we had been finding

the agreements and documents in the paper form as the

InfoTech(Information Technology) Revolution has totally

brought in dematerialized form. But it is for sure that we

need to understand that Electronic contracts face lots of

legal compliances which have to be adhered to. We will be

discussing whether E- contacts are binding by law and

enforceable and how the related legal issues can be

minimized.

In this modern world Electronic Marketplaces available on the Internet are

becoming increasingly popular. They act as a mediation in transfer of goods

and services and are following different architectural principles. Most

observers have assumed completely that Electronic Marketplaces will

become the apex electronic business avenue.

Electronic(e) Contracts: Current Trends & Challenges

Introduction

We will be observing the general principles of a contract and the legal

framework that statute the contracts in India. Whenever there are two

parties which involve in a transaction among themselves then they are

assumed to have entered into an agreement under the Indian Law. The

agreement will be legally binding and both have to comply to the

obligations which are mentioned in the contract. Mentioned under 2(h) of

the Indian Contract Act,1872 the term ‘contract’ has been defined as “an

agreement enforceable by law is a contract.” The Indian Contract Act, 1872

governs the contracts in India. Electronic contract means those agreements

which are in electronic/dematerialized form.E-Contracts are done between

parties to facilitate the business activities which will be conducted

online.Indians are highly becoming tech savvy and highly promoting

agreements done through online electronic means.It may have taken place

through online order of products, email account,proposing for services

through online sources etc.

The term Electronic contracts was firstly recognized by the

Information & Technology Act,2000 where it got utmost relevance to sue

Electronic(e) Contracts: Current Trends & Challenges

related parties in a transaction even when the transaction takes place

online.

What are the essential elements of E-contract ?

If you are interested to make and execute the E-contact, then you should
award those elements of E-contract. The following are the parts of an
E-contract:

OFFER

Offer is among the most important parts of an E-contract. Without an

offer, a contract cannot be made.

ACCEPTANCE

For a valid e-contract, after the proposal of the offer, an addressee needs to
accept the offer.

THE INTENTION OF THE PARTIES TO ESTABLISH A LEGAL

RELATIONSHIP

The various parties involved in a contract must have an intention to

establish a legal relationship.
Electronic(e) Contracts: Current Trends & Challenges

LAWFUL OBJECT

When the contract is made for a lawful object and lawful purpose, then only
it is a valid contract.

LAWFUL CONSIDERATION

An E-contract must be validated by lawful consideration. Consideration

means something is promised to give in return.

FREE CONSENT OF THE PARTIES

In the case of an electronic contract, parties just give their free consent by
clicking prescribed options. (For example – I accept, I decline etc.)

THE CAPACITY OF THE PARTIES

It is necessary for the Parties to attain the age of majority and they must be
of sound mind.

POSSIBILITY OF PERFORMANCE

The parties of an electronic contract should perform their part. In case

parties failed to perform their part, then the contract will be void.
Electronic(e) Contracts: Current Trends & Challenges

HOW YOU CAN EXECUTE AN E-CONTRACT?

There is no proper format to execute an E-contract. However, The Indian

Contract,1872 regulates all the terms of the electronic contract as discussed
below:
1) You have to make an offer.
2) The addressee needs to accept the offer.
3) Parties must give their free consent.
4) Parties are also capable to perform their part.
5) There must be lawful consideration.
6) Email, internet, and fax are the means that you can use to execute the
contract.

THE VALIDITY OF E-CONTRACTS IN INDIA

Keeping into consideration the continuous growth of e-commerce

industries and online transactions various Acts treat the electronic contract
as valid in the eyes of law such as :

 INDIAN EVIDENCE ACT

 INDIAN CONTRACT ACT

 INFORMATION TECHNOLOGY ACT.

Electronic(e) Contracts: Current Trends & Challenges

CURRENT TRENDS

The current trends have been very fascinating as they suggest an upward
trend in the usage of e-contracts as a whole. The Computer Revolution of
the 2000s further promoted this cause by making the networking devices
affordable and accessible to every person on the planet. The Indian
Contract Act has well equipped sections to deal with any level of financial
matters taking place under its ambit. It further helps an underdeveloped
nation to accelerate growth and break all communication barriers and focus
on the sole objective of exponential growth.

TYPES OF E-CONTRACTS

Generally, there are three sorts of E-Contracts, as follows;

Shrink Wrap Contracts: These contracts are filled with the merchandise
and therefore the usage of the actual merchandise is deemed as
associate acceptance of the terms and conditions of the Contract.

Click Wrap Contracts: These agreements are rigid in nature and there’s no
probability of negotiation in it as a result of the user of such computer
code has solely two choices, that’s to agree and use that individual
Electronic(e) Contracts: Current Trends & Challenges

computer code or to ail terms and conditions and to not use that individual
computer code.

Browse Wrap Contracts: A browse wrap agreements are typically found in a

very web site or a downloadable product, these contracts are printed on
specific webpage and user need to notice these terms and conditions by
browsing there to particular online page as a result of typically these
contracts are hidden.

Case study: Indian Railway Catering and Tourism Corporation

Limited (IRCTC)

• Indian Railway Catering and Tourism Corporation Limited (IRCTC)

is positively the real internet business webpage in India and in India's
response to private capitalist ventures. IRCTC was set up as a backup of the
Indian railroads for the select reason for giving providing food
administrations and ticketing administrations for the Indian Railways. Be
that as it may, recently, it expanded its wings and now caters segments, for
example, flights and inn appointments. The lead was set up in 2002 and
has changed the online travelling and booking business in India. IRCTC
capacities both in the business to business and business to buyer section. As
per the information discharged by IRCTC, it has more than 4-4.5 lakh
reservations every day. In 2010-11, IRCTC sold tickets esteem more than
Rs. 8000 Crore. It professes to switch in excess of 8 lakh equal transactions
in this way saying a lot about the noticeable quality and the size of their
business.
Electronic(e) Contracts: Current Trends & Challenges

• The website offers the main connection for buying Indian railroad
tickets on the web and even operator destinations (B2B) need to interface
them to IRCTC to give web-based booking administrations to clients.
IRCTC offers an enormous choice for buyers for instalment of purchasing
tickets on the web. IRCTC be that as it may, is one of only a handful few
suffering online business locales which charged transactions charges from
clients, which is diverse bank to bank.

• Through IRCTC a few clients enter day by day into another

component of agreement for example E-contract. E-contract presently
assumes a significant job both for the client and the vender. Client has a
great deal of decision to pick an item and vender through e-contract reach
to huge clients.

• Summary drawn by referring to the above Case Study:

• Issues have been distinguished from the contextual analyses can be

expressed as pursues:

a) Lack of rule with respect to instalment instruments

There is a by and large absence of guidelines with respect to the method of

instalments which should be given by business site and the MDR charges
which they can impose. It is seen that various ventures site demand extra
charges on the instalment made by the clients. The sites express industry
standard practice which makes the issue significantly progressively
complex inferable from issues of hostile to focused practices.

Further, there is no standard rules accessible particularly for the issues of

discount transactions on account of charge on card and plastic instalments.
The customary rules accessible for point of sale dealings may not make a
Electronic(e) Contracts: Current Trends & Challenges

difference to all e-contract transactions because of the envelopment of

numerous gatherings in these cases rather than two gatherings in an
ordinary point of sale exchange.

b) Need for Consumers Grievance Redressal mechanism

There ought to be models suggested by law with respect to the client

administration prerequisites to be satisfied by an e-contract undertaking.
Giving an important physical office and compulsory 24hour call focus are a
portion of the means which ought to be initiated. Further, the purchaser
courts ought to be made cognizant the issue of e-contract transactions and
the extraordinary strides to be followed in such cases. Courses of events
ought to be set for restoring the sum back to the client's record if there
should arise an occurrence of bombed transactions or request undoing.

CONCLUSION

The various principles of The Indian Contract Act will apply in the contracts
made on the online platform i.e. internet. Any customer from any corner of
the world can enter into a contract to purchase a product through the
internet. E contracts help to promote worldwide trade by removing trade
barriers of location, language and monetary transfer. E contracts have
made e-business viable. Not only businesses but also colleges and schools
have been involved full-fledged in procuring various useful materials like
novels and copyright contents through the online space. These contracts
Electronic(e) Contracts: Current Trends & Challenges

also have a dark side behind them. If a person is unable to acquire and
operate on modern devices then it would act as a hindrance instead of
streamlining the trade. Under the Information Technology Act 2000, the
amendment of 2008 to Sec.10 in the form of Sec.10A has true relevance and
genuine concern with the present situation wherein all of us enter into e-
contracts in our daily transactions.

REFERENCE

https://en.wikipedia.org/wiki/Electronic_signature

https://ieeexplore.ieee.org/abstract/document/628376

https://www.sciencedirect.com/science/article/abs/pii/S0377221702003946

http://www.legalserviceindia.com/articles/ecta.htm

https://www.upcounsel.com/e-contracts