International Indexed & Referred Research Journal, April, 2012. ISSN- 0974-2832, RNI-RAJBIL 2009/29954; VoL.

IV * ISSUE-39

Research Paper - Law

Electronic Contract
April , 2012 * LL.M. & Research Scholar (Law) Barkatullah University, Bhopal The electronic contracts are develop out of need for so agreed. 3. The last method is "The digital signature" speed convenience and efficiency. There are no need process - It contents electronic records are the equivafor delayed couriers and traveling costs and other ex- lent to hard copy records if they are signed with digital press. Contracts are in essence an agreement between signature using special encryption technology. two or more parties to conduct any business transac- Consideration tion. Such a contract has to be valid and lawfully bindConsideration is the price of promise. In legal ing on the parties to mutually benefit their interest and term of the consideration is what one party to a contract transaction. The contract, which could be oral or writ- will get the other party in return to performing contract ten, is arrived through a process of negotiation with obligation. proposals counter proposals towards acceptance by Illustration the concerning parties. Such an acceptance the proThe photographer A and B above the promise posals converted to an agreement. The Indian con- of Rs. 5000/- for the photographs to be used in the webtracts Act Section 2(h) states that "An agreement en- portal is the consideration that A gets from B and the forceable by law is contact". permission to use the photographs is the considerContracts in the traditional information tech- ation that A gets tram B. This set of promises between nology prior to the internet scenario pertained to fol- A and B is what brings about the contract between lowing: them. According traditional contract of one party makes (A) Manufacturing contract of hardware products, a promise and the other party offer nothing in exchange accessories etc. for that promise, the promise is unenforceable a "Gra(B) Contract related to software product. tuitous promise" thus the gratuitous promises are said (C) Contract for service and maintenance and post to be unenforceable without consideration. online. Object of electronic contract: (D) Electronic contract or online contract. Electronic contract facilitate transaction and Formation of online contracts or Electronic contract: agreements electronically without the parties physical There are following methods in which online contract appearance of the parties to each other. It means that can formedthe traditional contract process of offer acceptance 1. By exchange of e-mails1. 2. By the acceptance of and agreement to transact through electronic mode orders entered on e-commerce/ web sites2. 3. Online than physical mode of paper E-commerce to succeed conduct, such as clicking on an "I accept the Terms" such contract need to be validated legally an alternate button3. 4. An electronic data Interchange (EDI), elec- mode of transaction through online using the internet tronic exchange of purchase order, and other standard- technology. ized business documents between computers in a com- The object of electronic contracts are puter4. 5. Electronic Agent5. 1. Electronic contract is to create a secure atmosphere Generally contract must be in writing to be of transacting online with alternate mode to paper and electronic records or document are being now made writing. 2. Electronic contract create a electronic docuequivalent to " Hardcopy" written records with the mentation system which will safe guard to the contactrecognition of electronic contract in most of the coun- ing parties in the comparison of traditional mode of tries. contract. 3.In electronic contract the status of parties, An electronic contract requires the following status statuary provisions and monitoring or verifying 1. The "Automatic equivalence" method in which elec- the softcopies & authorities by finalizing the contract. tronic records are the equivalent of hard copy record. 4. Online transaction intentional or unintentional frauds 2. The second one is the "By agreement" process - In can be check by genuine methods or other sources.5.To this method electronic records are the equivalent to create necessary legal relation to oversee such transhard copy records of the parties to the transaction have action.

* Mr. Amit Dubey

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International Indexed & Referred Research Journal, April, 2012. ISSN- 0974-2832, RNI-RAJBIL 2009/29954; VoL. IV * ISSUE-39

6. Online transaction, parties establish or frame rules and regulation for smooth functioning contract. 7. Parties make digital signature legally valid & incorporating the same with the existing legal regime of contracts sale & goods evidence and customer Acts. On the above significant objects such electronic transactions will depend on the appropriate legal frame work, which recognizes electronic records or writing or digital signature. It should facilitate for a secure system such transactions and should create evidentiary value of such record. Essentials of Electronic Contract An offer in electronic contract is the offer or proposal which made directly by e-mail. The consumer "browses" the available articles or goods and services displayed on the merchant's website and then choose what the other party would like to purchase when the offer is made by website displaying the items for sale at a specific price. This process is actually an invitation to offer and hence is revocable at any time up to the time of acceptance. The offer is made by the customer a placing the products in the virtual shopping cost for payment the offer need to be accepted. Procedure of electronic contractsThe following procedures are available for forming electronic contract: (A) E-mail:- An offer and acceptance can be exchanged by e-mail or can be combined with paper documents, faxes, telephonic conversion etc. (B) Website Forms: - The seller can offer goods or services through his website the customer places an order by completing and transmitting the order from provided on the website. The later or be immediately on spot delivered electronically (Railway e-tickets, Air tickets, software mp3 etc.). (C) Online agreements: - Online agreements are important elements of an electronic contract in which the user may need to persons provided a pornographic movie as consideration for purchasing on mp3 players, and then such a contract is void. Similarities between the Traditional Contracts and Electronic Contracts: 1. Offer and Consideration are essential. 2. The parties must be competent to contract: -All the contracting parties must be legally competent to enter into the contract. Contract made by minors and lunatics are void. 3. Free consent: - Consent is said to be free when there is absence of coercion, misrepresentation, undue influence and fraud. Generally in online contracts are specially when there is no active real time interaction between the concerning parties, e.g. between a website and the customer who buys through such a site, the click through procedure ensures free consent.
SHODH, SAMIKSHA

4. Lawful object and Lawful Consideration: - A valid contract pre supposes a lawful object and lawful consideration thus a contract for selling narcotic drugs online in void. 5. Possibility of performance of contract: A contract to be enforceable must be uncertain and there must be possibility of performance. A contract which is impossible to perform can not be enforced e.g. where a website promises to sell land on the moon. 6. To create legal relations: Where the parties has no intention to crate legal relationships on the part of contract then no contract is possible between them, An agreement of domestic or social nature are not contract and therefore are not enforceable e.g. a website provided general health related information of and other tips. 7. Legal Formalities: The legal formalities are essential for the both types of the contracts government and the legal persons. Government contract and semi government etc. can not be completed through online contract. Kinds of software contract6 On the software contracts are divided in following categories: (a) Standard package of software: - The standard software is the type of software written and produced to address mass consumers around the world. Microsoft windows come under this category. (b) Bespoke Software: - Bespoke software is the type of software specially commissioned & written to meet the need of specially needs of varied customers Indian software firm are also involved in Bespoke software production for example an airline company may want Bespoke software which will such its operation Infosys created retailing Reebok shoes software. (c) Customized software: - Customized software is a standard software package, which offered to the needs of the customers many hospital and hotel management software package are standard software packages often modified to meet the variations of the customers there are many network packages which are fulfilled the need of customers. In electronic contract these software are dealt as manufacturing where hardware manufacture can bundle as standard package and other like customized and Bespoke software are dealt as contract between parties based an functionalities and there by the terms of contract. On site contacts need to take into account of not merely the technical aspects and delivery of software but also labour laws, gender laws and other accounting aspects of the country where the firm intend to operate in drawing up the contract.
MULYANKAN

AUR

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International Indexed & Referred Research Journal, April, 2012. ISSN- 0974-2832, RNI-RAJBIL 2009/29954; VoL. IV * ISSUE-39

Conclusion: In the electronic scenario the whole transaction can be completed in few seconds both contracting parties similarly put their digital signature to an electronic contract interesting parties, the first party frame or prepares up two copies of the contract sign them and courier them to the other party, who in turn signs both

copies contract and courier one copy back. The further option is that the both parties meet some where and sign the contract. The rights and duties of parties and terms or conditions of agreement decided by contracting parties. The court of law Acts to enforce the agreement in non performance case.

R E F E R E N C E
1. By exchanging e-mail communications, the parties can create a valid contract. Offers and acceptances may be exchanged by e-mail. 2. Where a Web site operator offers goods or services for sale, which the customer orders by completing and transmitting an order form displayed on screen. Once the vendor accepts the order, a contract is formed. The goods and services may than be physically delivered off-line. 3. In a general rule, contracts can be crated and accepted by terms and condition. 4. EDI involves the direct electronic exchange of information between computer the data is formatted using standard protocols so that it can be implemented directly by the receiving computer. EDI is often used to transmit standard purchase orders, acceptances, invoice and other records, thus reducing paperwork and the potential for human error. 5. In Russell & Norving "An agent is anything that can be viewed as perceiving its environment through sensors and acting upon that environment through effects. A human agent has eyes, ears, and other organs for sensors, and hands, legs, mouth, and other body parts for effectors. An electronic agents display characteristics that are very close to human characteristics such as intelligence, autonomy and pro-activeness. 6. http://www.asianlaws.org.

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