Study On E-Contracts and Related Legal Framework: Submitted by
Study On E-Contracts and Related Legal Framework: Submitted by
LEGAL FRAMEWORK
Submitted by
Samyutha Samudrala
PRN: 17010324051
Visiting Faculty
CERTIFICATE
The project entitled “Study on e-contracts and related legal framework” submitted to the
Symbiosis Law School, Hyderabad for E-business Technologies as part of Internal
Assessment is based on my original work carried out under the guidance of Prof.
Shivalakshmi Arumugam from January, 2020 to March 2020.The Research work has not
been submitted elsewhere for award of any degree.
The material borrowed from other sources and incorporated in the research paper has been
duly acknowledged.
I understand that I myself would be held responsible and accountable for plagiarism, if any,
detected later on.
I would like to thank the Library Staff of Symbiosis Law School, Hyderabad as well for their
co-operation.
I would also like to thank my batch mates and seniors who inspired, helped and guided me in
making this project. I am grateful to some of my seniors and friends for their incredible
guidance and support.
Since the existence of mankind, the society with the essential conditions and validity
always operated on the basic theory of of e-contracts. Corresponding changes
give and take according to their have been made in the Indian Evidence
personalised needs. This indicates the fact Act to enable the admission of e-contracts
that exchange of goods and services in the court of law. This study highlights
between the consenting parties is not a the legal framework of e-contracts with
recently developed concept. As the respect to these statues along with the
communities grew, the exchange was done amendments made to certain provisions
on a larger scale in a regulated manner and the judicial approach. In spite of the
which came to known as commerce. With changes made, the questions relating to
the advancements in technology and the identity of the parties, law to applicable
telecommunication sectors, exchange of for international transactions,
goods was moved to electronic platform. jurisdictions and other legal issues have
This paper examines the definition, scope yet not been answered. It is suggested that
and the future of the e-commerce industry these issues shall be resolved with help of
in India. Contracts have always been an an effective legislation.
indispensable tool and facilitator for
commerce and businesses. Over the years
the commerce industry experienced
significant changes and the nature of
contract simultaneously changed from
oral to written to electronic. The
definitions of e-contract given by various
academicians, jurists and the
classification of e-contracts are discussed
in this paper with help of various
secondary sources. The mere formation of
a contract is ineffective without legal
recognition and enforceability. In India,
the Indian Contract Act, 1872 read with
the Information Technology Act, 2000 deal
Keywords: E-contract, E-Commerce, E-commerce is a subset of business and e-
Validity, Technology, Indian Contract Act contracts facilitate e-commerce. Usually,
e-contracts are initiated by the
manufacturer and are in a standardised
form leaving no scope to the consumer to
bargain or negotiate a deal. For example,
on Amazon various registered distributors
offer the Tupperware bottles at different
price levels. A consumer needs a pack of
three same Tupperware bottles but the site
shows only a pack of two bottles. In such a
case the consumer cannot bargain the price
nor request for any of the required
changes. This is considered as one of the
major drawbacks of e-contracts in standard
INTRODUCTION form as in traditional contract, the parties
have the freedom to negotiate the terms.
In the current generation everything right
from purchasing clothes to ordering food E-contracts are similar to the traditional
and from trading shares to importing business activities in terms of exchange of
products happens just by a click. This goods and services for a valid
purchase and sale of goods and services consideration and other essential elements
over the internet refers to e-commerce. E- but e-contracts include an additional
commerce was launched to beat the cut- component that is digital stage. This extra
throat market competition and make it requirement in e-contracts is an effective
more convenient to the customer who was difference that questions the applicability
considered to as the king of the market. E- of the current contractual law to them. It is
commerce industry turned to be a win-win an undisputed fact that the rules regarding
situation for the consumers as well as the formation of traditional contracts are
manufacturers. The goods of high-standard settled but it cannot be ignored that these
were available to the customers at lower rules alone cannot regulate e-contracts.
prices and the manufacturing firms earned Unfortunately, neither the Indian Contract
definite profits in long term. Act nor any other statue provides for the
definition of e-contract. Despite the efforts
of the legislative makers, the present advancements leading to massive impact
regulation encounters certain limitations as on human existence and societal lifestyle.
the alternations regarding e-contracts were One of the most fruitful innovation in the
not made in the Sale of Goods Act, commercial domain was the launch of e-
Specific Relief Act or the Consumer commerce where the market was shifted
Protection Act. on the digital platform. This turned the
globe into a virtual world and enabled
This paper consists of four main chapters.
easy, fast and convenient trade of goods
The first chapter deals with the scope of e-
and services across the international
commerce industry in India and the
markets. However, the validity and
various business models. The second and
enforceability of these transactions soon
the third chapter deal with the concept of
came into question as they did not come
e-contract. The second chapter defines e-
under the ambit of the existing definition
contract and explains the various types on
of contract.
e-contracts. On the other hand, the third
chapter analyses e-contracts from The nature of the law is dynamic and shall
legislative perspective of Indian Contract evolve over the time to meet the changing
Act, Indian Evidence Act and Information requirements of the society. To govern the
Technology Act. The last chapter deals e-commerce industry and safeguard the
with breach of e-contracts and the interests of the consumers, it was
available remedies. necessary of expand the definition of
contract and create certain provisions. The
BACKGROUND
contracts which are partially or fully
The basic principles of the contemporary formed through any electronic medium
contractual law can be traced back to the such as MMS, SMS or audio clip are
19th century. The law of contracts was called as e-contracts. Today, conversations
developed during this period as trade, through telephone, fax, telegram and email
commerce and industry rapidly expanded are recognized as a valid contract under
and the need arouse to regulate them to the Indian Contract Act, 1872 and are
avoid commercial disputes. Traditionally, enforceable in the court of law. E-contracts
a contract was defined as a formal written dominant as they avoid delays, human
document signed by the consenting parties. errors and personal biases. Despite the
Over the period of years, the world enhanced utilization and importance of e-
witnessed drastic technological contracts, the current regulations still
suffer certain loopholes. The matters question the validity of e-contracts were
relating to jurisdiction, tax implications discussed.
and other similar issues need to be
Limitation: The author in this paper did
addressed at the earliest to restrict
not evaluate the effect of other requites
conflicts.
such as consideration, insanity of the party
LITERATURE REVIEW and object of the contract. Tax
implications in e-contracts is currently the
Title of the Paper: E-contracts in India
major concern but the same has not been
– The Legal framework, Issues and
addressed.
Challenges.
illegal activities such as hacking that would through the provisions of different
require e-contracts as a proof before the court legislations like Indian Contract Act. The
of law. paper has a qualitative research basis as it
is based on gathering non-numerical
Limitation: The validity of e-contracts was
not scrutinized from Indian Contract Act information and contains definitions,
concepts and description. The study does media and internet1. On the internet, it
not include survey and the information was relates to a website of the vendor, who
obtained from various secondary sources sells products or services directly to the
like websites, articles, reports, journals and customer from the portal using a digital
online databases. shopping cart and allows payment through
credit card, debit card or EFT (Electronic
The style of approach is Analytical and
fund transfer) payments. E-commerce or
Descriptive as the topic has been divided
E-business involves carrying on a business
into smaller bits and detailed research has
with the help of the internet and by using
been done on each sub-topic. It is a
the information technology like Electronic
historic approach as it is based on events
Data Interchange (EDI)2. There is no
that have occurred and the conclusion is
single definition of E-Commerce, it means
based on the same. The information so
only commercial activity which is
collected has been analysed and classified
performed or linked to or supported by
as per the objectives of the study.
Electronic Communication. The European
initiative in Electronic Commerce has
defined e-commerce as3:
examples are the auction sites. Basically, if commerce technologies and the Internet in
someone has something to sell, then he India. The web communities built around
gets it listed at an auction sites and others these portal sites with content have been
can bid for it. Another example is Yahoo! effectively targeted to sell everything from
Personals through webpersonals.com10. event and movie tickets the grocery and
computers. The future does look very
Consumer-to-Business (C2B): Consumers
bright for e-commerce in India with even
can band together to form and present
the stock exchanges coming online
themselves as a buyer group to businesses
providing an online stock portfolio and
in a consumer-to-business relationship. It
status of prices. Simultaneously it is
involves individuals or a group of
important to ensure that regulatory
consumers selling to a concerned business
approaches are framed in a transparent and
any particular product or service. This may
harmonised manner to govern e-commerce
be in form of catalogues or auctions 11.
in India13.
These groups may be economically
motivated example is Mercata.com, or 2. E-CONTRACTS
socially oriented as seen in case of
2.1 MEANING OF E-CONTRACT
voxcap.com, which aims to provide
advocacy services. A contract is an agreement enforceable by
law which offers personal rights and
These are the traditional business models,
imposes personal obligations which are
however, in the last decade Government
protected by the law and can be enforced
has entered the market as a new player.
against the parties to an agreement 14. The
12
Taranjeet Singh, E-commerce Scenario in India,
9
Dr. (Smt.) Rajeshwari M. Shettar, Emerging IJRECT, 16, 17 (2016)
Trends of E-Commerce In India: An Empirical 13
Id.
Study, IJBMI, 25, 27 (2016) 14
Dr.S.Sethuram, E-Contracts in India: The Legal
10
Supra note 6 Framework, Issues and Challenges,
11
Id IJEIST,12,12(2018)
Indian Contract Act, 1872, defines contract 2.2 TYPES OF E-CONTRACT
as “an agreement enforceable by Law.”15
Broadly speaking e-contracts can be
Contracts in general provide the basic
classified under two heads on the basis of
foundation for any commercial or trading
their execution19:
activity. Unless an enforceable contract is
concluded, no commercial transactions can (i) Electronic Data Interchange - It means
take place either in the physical world or the electronic transfer of information from
31
performance. A contract, which is
Id.
32
Warren H. Hyman, Adequacy of Consideration impossible to perform, is void, e.g.,
and the Unconscionable Contract, CLJ, 86, 500
(1981)
33 34
Supra note 30 Id.
where a website promises to sell land electronic commerce by providing a legal
on the moon. Similarly, an agreement, Infrastructure governing electronic
the meaning of which is not certain or contracting, security and integrity of
capable of being made certain is void35. electronic transactions, the use of digital
signatures and other issues related to
3.2 INFORMATION
electronic commerce. The electronic
TECHNOLOGY ACT, 2000
contracts would be considered absolutely
India being one of the signatories to the valid under the Information Technology
UNCITRAL Model Law was also required Act, 2000. As per Section 439 of the
to give effect to the said resolution and to Information Technology Act, 2000 any
promote efficient delivery of government document which is in the written or printed
services by means of reliable electronic version would be treated same and will
36
records . Therefore, the Parliament of have the equal validity in the electronic
India passed its cyber law in the form of form also. As per the newly introduced
the Information Technology Act 2000, Section 10A40 of the Information
which provides the legal infrastructure for Technology Amendment Act, 2008 clearly
E-Commerce. The Act received the assent states that the validity of contracts through
of the President of India and became the electronic means. According to this
th 37
law of the land on 17 October 2000 . It provision whenever a contract is wholly
does not specifically deal with the formed electronically or when the
electronic contracts as the provisions of the acceptance, proposal or revocation is in
Indian Contract Act, 1872 are applicable to
E-Contracts. However, the Information
39
Information Technology Act (2000) Section 4:
Technology Act grants legal recognition to Legal recognition of electronic records.-Where any
law provides that information or any other matter
the transactions carried out by means of shall be in writing or in the typewritten or printed
electronic data interchange and other form, then, notwithstanding anything contained in
such law, such requirement shall be deemed to
means of electronic communication38. have been satisfied if such information or matter is-
(a) rendered or made available in an electronic
form; and (b) accessible so as to be usable for a
The Act aims to facilitate the development subsequent reference.
40
of a secure regulatory environment for Information Technology Act (2008) Section
10A: Validity of contracts formed through
35 electronic means. -Where in a contract formation,
Supra note 24
36 the communication of proposals, the acceptance of
Vasudha Tamraka, E-Contract and Its Legality, proposals, the revocation of proposals and
http://www.legalserviceindia.com/articles/ecta.htm acceptances, as the case may be, are expressed in
(12th Mar. 5:37PM) electronic form or by means of an electronic
37
Prateek Kalia, Information Act in India: E- record, such contract shall not be deemed to be
commerce Value Analysis, NTUTJ, 55, 59 (2016) unenforceable solely on the ground that such
38
Id. electronic form or means was used for that purpose.
electronic form it is valid and cannot be though no formal contract was formed or
considered invalid. signed is valid in the eyes of law. Indian
judiciary has failed to acknowledge the
The Information Technology Act also
question of validity of these contracts as
provides legal recognition to electronic
there is no precedent till date for providing
signatures. Section 541 of the Act
any type of ground rules over the
incorporates the law regarding legal
enforceability of these contracts. Although
recognition of electronic signatures. Prior
in the case of L.I.C India v. Consumer
to the Amendment Act, 2008 the word
Education and Research Centre44 the
digital signature was used, but the
Hon‘ble court has tried defining such
Amendment Act has substituted the word
contracts and observed that where the
electronic signature for the word digital
weaker parties do not have a bargaining
signature. This section creates a functional
power, such type of contracts were
equivalent of 'hand written signature' in the
referred as ‘dotted contracts.‘ Thus, it can
form of 'electronic signature' to
be said that the Indian courts and the
authenticate any electronic record. The
legislations have recognized the concepts
recognition of electronic signature is
of these contracts though no guidelines for
useful is authenticate e-contracts42.
its regulation have been laid down by it.
In case of Trimex International FZE v. The reliance can be placed on the foreign
43
Vedanta Aluminium Ltd. India , the Hon judgments based on the facts and
‘ble Supreme Court recognized that the circumstances of the case, though a strong
contract whose terms and conditions are necessity for proper legislative structure
discussed through e-mails between parties, for its implementation has rose as the
41
Information Technology Act (2000) Section 5: Indian economy is moving to paper less
Legal recognition of electronic signature. -Where
any law provides that information or any other transactions45.
matter shall be authenticated by affixing the
signature or any document shall be signed or bear
3.3 INDIAN EVIDENCE ACT
the signature of any person, then, notwithstanding
anything contained in such law, such requirement
shall be deemed to have been satisfied, if such A mere formation and recognition of e-
information or matter is authenticated by means
of 16 [electronic signature] affixed in such manner contract is not sufficient for it to be
as may be prescribed by the Central Government.
Explanation.- For the purposes of this section,
admissible in the court of law. All e-
"signed", with its grammatical variations and contracts for their enforceability shall be
cognate expressions, shall, with reference to a
person, mean affixing of his hand written signature admissible in the court of law as per the
or any mark on any document and the expression
"signature" shall be construed accordingly.
44
42
Id. 1995 AIR 1811
43 45
86 F.3d 1447 (7th Cir. 1996) Supra note 18 at 600
Indian Evidence Act. The Evidence Act act49. It is required that the document or
was drafted to codify standards of e-mail sought to be produced from a
evidence and fundamental rule of proof. computer, was in regular use by a person
The definition of 'evidence' has been having lawful control over t h e system at
amended to include electronic data. the time of producing it; the document or
Section 346 of the Evidence Act, 1872 the e-mail was stored or received during
defines proof and under its subclause (2) it the ordinary course of activities; the
identifies electronic modes as a method of information was fed into the system on a
admitting documentary data. regular basis; the output computer was in a
proper operating condition and has not
The courts in India recognize electronic
affected the accuracy of the data
documents under Section 65-A47 of Indian
entered. An e- contract is basically a
Evidence Act, 1872. The procedure for
communication between two parties in
furnishing electronic documents as
respect of the transfer of goods or services.
evidence is provided under.
Thus, any e- mail communication and
48
Section 65-B of the Indian Evidence other communication made electronically
Act, 1872. The latter section provides that, is recognized as valid evidence in a Court
any information contained in an electronic of law50.
record produced by a computer in printed,
The evidentiary value of e-contracts can be
stored or copied form shall be deemed to
well understood in the light of the
be a document and it can be admissible as
following sections of Indian Evidence Act.
evidence in any proceeding without further
48
Indian Evidence Act (1872) Section 65B (1):
proof of the original. But, admissibility of
Admissibility of electronic records -
the same is subject to various conditions Notwithstanding anything contained in this
Act, any information contained in an
prescribed under section 65-B of the said electronic record which is printed on a paper,
stored, recorded or copied in optical or
46 magnetic media produced by a computer
Indian Evidence Act (1872) Section 3 (2) (e):
(hereinafter referred to as the computer
Evidence – Evidence means and includes— (1) all
statements which the Court permits or requires to output) shall be deemed to be also a
be made before it by witnesses, in relation to document, if the conditions mentioned in this
matters of fact under inquiry, such statements are section are satisfied in relation to the information
called oral evidence; (2) [all documents including and computer in question and shall be admissible in
electronic records produced for the inspection of any proceedings, without further proof or
the Court], such documents are called documentary production of the original, as evidence of any
evidence. contents of the original or of any fact stated therein
47
Indian Evidence Act (1872) Section 65A: Special of which direct evidence would be admissible.
49
provisions as to evidence relating to electronic K. Prethev, An Critical Analysis of E-Contracts
record - The contents of electronic records may be in India and Enforceability with Respect to Sec-65
proved in accordance with the provisions of section of Indian Evidence Act, IJPAM, 1757, 1760 (2018)
50
65B. Id.
Sections 85A, 85B, 88A, 90A and 85C digital signatures and electronic records
deal with the presumptions as to electronic that are more than five years old53.
records. According to Section 85A51 every
4. BREACH OF E-
electronic record of the nature of an
CONTRACT
agreement is concluded as soon as a digital
signature is affixed to the record. Section The traditional principles of contract law
85A has been added in order to ensure the clearly specify as to who is incapacitated
52
validity of e-contracts. Section 85B from entering into a contract. The
provides that the court shall presume the difficulty in online transaction is that the
fact that the record in question has not competence of one party entering into the
been put to any kind of alteration, in case contract is almost unknown to the other
contrary has not been proved. The secure party54. E-contracts have ensured the
status of the record may be demanded till a customers the guarantee of performance
specific time. The digital signature should from the e-commerce firms. However,
also be presumed to have been affixed despite this some instances of problems
with an intention of signing and approving faced by the consumers in India over
the electronic record. 88A, 90A and 85C contracts entered online are as under55:
provider further presumptions regarding
1. The online e-commerce portal
flipkart.com accepted the orders, and then
cancelled them after an extended period of
51
Indian Evidence Act (1872), Section 85A:
Presumption as to electronic agreements— The waiting citing the reason as product not in
Court shall presume that every electronic record stock despite the website still flashing the
purporting to be an agreement containing the
[electronic signature] of the parties was so product as available. In one particular case,
concluded by affixing the [electronic signature] of
the parties they cancelled an order for the Canon
52
Indian Evidence Act (1872), Section 85B:
Presumption as to electronic records and electronic 85mm f/1.8 lens because he placed it one
signatures — (1) In any proceedings involving a day before the price hike in Canon lenses.
secure electronic record, the Court shall presume
unless contrary is proved, that the secure electronic Flipkart promptly cancelled his order
record has not been altered since the specific point
of time to which the secure status relates. (2) In any because the difference between the old and
proceedings, involving secure [electronic
signature], the Court shall presume unless the 53
contrary is proved that— (a) the secure [electronic Kapil Raina, Evidentiary Value of E-Contracts,
signature] is affixed by subscriber with the http://www.legalserviceindia.com/article/l127-E-
intention of signing or approving the electronic Contracts.html (13th Mar., 5:54PM)
54
record; (b) except in the case of a secure electronic Megha Nagpal, Analysis of The Legal Issues
record or a secure [electronic signature], nothing in Involved In Electronic Contracts Under Indian Law
this section shall create any presumption, relating With Reference To Business-To-Consumer Model
to authenticity and integrity of the electronic record Of E-Commerce, IJLLJS, 43, 57 (2012)
55
or any electronic signature. Id.
new price was Rs. 8,000 and intimated the the festival for which the product had been
customer that the lens was out of stock, ordered was over.
while their website continued to advertise
3. In yet another instance, websites upon
the lens as available, at the new price 56. It
cancelling the order provide the option to
was evident they did not want to honour
the consumer for keeping the already paid
his order, despite it being placed in timely
amount in the ‘wallet ‘of the website, i.e.,
fashion before the price hike.
it is kept as credit in the account of the
2. In another instance, the author had company from the consumer58. The money
ordered a rakhsha bandhan set from is not refunded and the consumer is forced
fernsandpetals.com. The website clearly to buy from the same website again. The
and specifically with pictures mentioned example for this is shein, a clothing
the items that were included in the set. The website.
main attraction was a traditional storage
4.1 REMEDIES FOR BREACH
box that came along with the rakhi. The
payment was made online before the The ultimate intention of any contract is its
delivery of the product as the website did performance as agreed between the parties.
payment. The received product was non- performance of a contract results in its
conforming to the promised items as the breach. Chapter VI of the Indian Contract
traditional box was missing. The customer Act, i.e. Sections 73 to 75, sets down
wrote to the website and was promised a consequences for breach of contract. As
replacement soon57. The product was the breach of contract is usually higher in
delivered again without any further the case of e-contracts, these provisions
payment and there was no request for are important to protect the customers59.
return of the first delivered product. To the Liquidated damages are usually awarded
surprise of the customer, the new product to the other party from the party that
was again missing the traditional box, and infringed the contract in case the contract
upon writing again, the website emailed provides for a specific amount to be paid
the screenshot showing ‘in transit ‘delivery upon its breach. The benefit of Section
status for the first product. By this time, 7460 is that the party suffering breach is not
required to prove any loss or damage to
56
Swapnil Mathur, Flipkart screwed me over: 57
Here’s how they could stick it to you as well. Supra note 54
58
https://www.digit.in/features/internet/flipkart- Id.
59
screwed-me-over-here-s-how-they-could-stick-it- Rachna Choudhary, Remedies for Breach of E-
to-you-as-well-17224.html (10th Mar., 7:18PM) Contracts, JCIL, 1, 7 (2016)
him as a result of the breach of contract. It DISCUSSION AND
is enough if violation of contract has
RECOMMENDATIONS
occurred and the contract specifically
provided for a penalty. Damages are the From the above analysis it can be said that
most identified method of compensation the concept of virtual world has impacted
for e-contracts in e-commerce as the commerce of various countries including
values are usually nominal. India. According to me the easy access to
the internet, fax, computer programs or
However, in exceptional cases Specific
smart phones has acted as blood in the
performance can be claimed. Though the
body of e-commerce industry of our
Specific Relief Act, 1963 provides for
country. This view has been supported by
principles guiding the relief of specific
Ayushi Singh in her work titled E-contract
performance of a contract, this remedy is
in India: Issues and Challenges (2019).
largely dependent on the discretion of the
She pointed that 53% of growth rate in
courts. Courts are not bound to grant such
recent years is due to online retail market.
relief merely because it is lawful to do so61.
The enforcement of Information
They shall ensure that there is no other
Technology Act of 2000 has provided a
possible remedy in the given case before
legislative framework and governance to
granting specific performance. In e-
it. However, as nothing is perfect, the
contracts the damage can be calculated in
current regulation also has certain
monetary terms and hence specific
shortcomings pertaining to the raising
performance is not granted. For example, a
issues in the country in respect of these e-
product is delivered in defective state, the
contracts.
court will order re-payment of the product
price and compensation for delay62. The major loophole for me with respect to
60
Indian Contract Act, 1872, Section 74 the current law is regarding the jurisdiction
―Compensation of breach of contract where
penalty stipulated for: When a contract has been of the courts. Paperless transactions like e-
broken, if a sum is named in the contract as the
contract are borderless, therefore, it gets
amount to be paid in case of such breach, or if the
contract contains any other stipulation by way of difficult to determine the jurisdiction i.e.
penalty, the party complaining of the breach is
entitled, whether or not actual damage or loss is the extent of the limit of the court ‘s
proved to have been caused thereby, to receive
from the party who has broken the contract authority over any suit or appeal at the
reasonable compensation not exceeding the amount
so named or, as the case may be, the penalty time of breach of e- contract. Even
stipulated for. Dr.S.Sethuram in the article E-Contracts
61
Supra note 59
62
Gregory Brown, What Are the Remedies llp.com/what-are-the-remedies-available-for-a-
Available for A Contract Breach ? https://www.bc- contract-breach/ (12th Mar., 6:13PM)
in India: The Legal Framework, Issues as cause of action may arise in e-contract
and Challenges (2018) expressed a similar at the place where the electronic
opinion and pointed out that as per Section information was dispatched, irrespective of
13(3) of the Information Technology Act the fact of principle place of business.
of 2000: a) the place of business of the
This view is supported by the court in case
originator will be deemed to be place
of P.R. Transport Agency vs. Union of
where the information was dispatched, and
India & others64. The Allahabad Court
b) place of business of the addressee will
dealt with the question jurisdiction and
be deemed to place where the information
held that the acceptance of the contract
was received.
was sent through Email and received in
In my understanding this would imply that Chandauli (U.P) and principle place of
the location of computer sources through business of the petitioner was at Vanaras
which it was dispatched and received, (U.P) thus, the place of jurisdiction on the
plays no role in determining the present case lies in U.P.
jurisdiction of the case. Moreover, this
As electronic transactions have no
section limits the power provided by
boundaries, it has become difficult to deal
Section 2063 of Code of Civil Procedure,
with the jurisdictional issue, especially
1908. As Section 20 clause c specifies that
when both parties belong to different part
the suit can be instituted in the court within
of the world. The present legislations
whose local jurisdiction the cause of action
governing e-contract have failed to answer
has aroused. Therefore, it raises the
questions as to jurisdiction lies in which
question over the jurisdiction of the courts
country in case of dispute, Law to be
63
Code of Civil Procedure (1908), Section 20: applied to solving the disputes (between
Other suits to be instituted where defendants reside
or cause of action arises - Subject to the limitations
suppliers and consumers) or how will
aforesaid, every suit shall be instituted in a Court decision be enforced in both the countries
within the local limits of whose jurisdiction- (a) the
defendant, or each of the defendants where there is an emerging area of research and
are more than one, at the time of the
commencement of the suit, actually and voluntarily development.
resides, or carries on business, or personally works
for gain; or(b) any of the defendants, where there In many studies like Electronic Contracts
are more than one, at the time of the
commencement of the suit, actually and voluntarily in India: An Overview by Shubhada
resides, or carries on business, or personally works
for gain, provided that in such case either the leave Gholap (2018), it is considered that e-
of the Court is given, or the defendants who do not
reside, or carry on business, or personally work for contracts are fulfilling the requirement of
gain, as aforesaid, acquiesce in such institution; or
(c) the cause of action, wholly or in part, arises.
competent parties. However, in my
64
2005 SCC OnLine All 880
opinion this is an illusion. As for validity Uberrimae fidei which means utmost good
of the contract under section 11 of the faith governs e-contract and this helps to
Indian Contract Act of 1872 it is necessary overcome the concern of competency of
that parties are not minor, lunatic or party. According to this it is presumed that
disqualified by the law. Minors can easily the both parties entering into the contract
enter into contracts through clickwrap or are competent. In my opinion despite this
browse wrap contracts with the website. presumption, e-contracts would still suffer
So, the legal liability is on the websites to from this loophole as the doctrine is
ensure that the party contracting is indirectly stating that contracts entered by
competent under Indian Contract Act of minors and lunatic are valid in case of e-
1872 for it. contracts. This is completely contradicting
the fundamental principle laid down in the
Megha Nagpal in her work Analysis of
Indian Contract Act.
The Legal Issues Involved in Electronic
Contracts Under Indian Law with E-contracts are documents which are
Reference to Business-To-Consumer entered into by the parties through
Model of E-Commerce identified the same electronic transmissions and are stored in
threat and it is suggested that to ensure the the virtual world. Though, it is believed
competency of the party, the online that anything which enters the digital
websites shall come up with various world always exists and is never lost, I am
methods such as signing up to the site, in of the opinion that yet there are no
which the person enters personal details administrative, legal or judicial guidelines
including birth date ensuring the website over the scenario and the whole
that the party has the capacity to enter into information or part of information can lost
the contract. It is sometimes can be due the failure of the technology. There is
accompanied with a dialogue box more chance of threat for loss of
containing pictures, and users are required information and over dependence on
to identify things in them to ensure the technology leads to technical errors at
lunacy of the party. For example. KYC is large extent which are difficult to be
done by patym. Similar approaches shall rectified in a short span of time. Certain
be adopted by other companies. author like Ayushi Singh and Sukhwinder
Singh (2017) opposed this view and stated
Vijaysinh Shashikant in Advantages of E-
that e-contracts are dependent on
Contracts Over Traditional Contracts
technology and this is the advantage over
(2016), suggested that doctrine of
traditional contracts as human errors occur contracts is an emerging concept and their
more often. regulations with respect to the private
international law can be studied. This
With regards to the breach of contract, I
research focussed only on the legislations
am of the view that in e-commerce
and the judicial approach towards e-
industry, it would be more feasible to grant
contracts was ignored. As seen in Chapter
specific performance than damages. The
1, new business models have developed
court in the case of Hadley & Anr. v.
due to e-governance. The concept of e-
Baxendale & Ors65 pointed out an
governance in India is used in a limited
opposite opinion and held that that
sense, the new areas for expanding the
damages under a contract are to be
scope and its relation to e-contracts can be
awarded as compensation for any loss or
explored.
damage arising naturally in the usual
course of things from the breach of
contract. Specific performance would
more appropriate for the customer as well
as the seller because the needs of the CONCLUSION
customer are satisfied and any company
The primary objective of the study was to
would prefer providing the product or
understand what is e-contract and analyse
service at its price than paying damages. It
the legal framework in India regarding the
is recommended that an amendment shall
e-contracts in the e-commerce industry.
be passed by carving out e-contracts as an
From the above discussion it can be
exception for granting specific
concluded that e-commerce provides
performance and providing discretion to
multiple benefits to the consumers in form
the courts regarding it.
of availability of goods at lower cost,
This study was geographically limited to e- wider choice and saves time. Online
contracts and its regulations in India. businesses like financial services, travel,
Further research can be conducted to entertainment, and groceries are all likely
analyse the legal framework on e-contracts to grow in the near future. To sum up the
in different countries and the same can be findings of this paper, it would suffice to
compared to the Indian scenario to check if say that the essential ingredients of a valid
similar provisions can be incorporated for contract are mostly similar in the context
effective governance. Cross- border e- of online contract and if all the
65
(1854) EWHC Exch J70 requirements of law are satisfied, a valid
contract can be formed in all e-Commerce Moreover, the advancement of
transactions. Certain grey areas have been technologies will bring in new challenges
highlighted in this study with respect to the for the law makers and the government
validity of online contracts like the departments. Law needs to be updated and
jurisdiction and question of competency. It upgraded from time to time it to keep up
is recommended that an effective with the evolving technologies.
amendment is made to the Information
Technology Act to address the issues to
validity of e-Contract entered under the
situation of mistake, misrepresentation and
fraud. It is also suggested that every e-
contract should have its own clause
between the parties in cases on breach as it
provides them with remedy on mutual
consensus in short period of time.
REFERENCES
Journals
Ayushi Singh & Sukhwinder Singh, (2019) E-contract in India – Issues and
Challenges, International Journal of Interdisciplinary Research and Innovations, Vol.
7, 597 – 602
Darryl Mountain, (2003) E-contracts: Documents that Describe Themselves,
International Journal of Law and Informatuion Technology, Vol. 11, 274-285
K. Prethev & Aswathy Rajan, (2018) A Critical Analysis of E-Contracts in India and
Enforceability with Respect to Sec-65 of Indian Evidence Act, International Journal
of Pure and Applied Mathematics, Vol. 119, 1757 – 1764.
Megha Nagpal, (2012) Analysis of The Legal Issues Involved in Electronic Contracts
Under Indian Law with Reference to Business-to-Consumer Model of E-Commerce,
International Journal of Law and Legal Jurisprudence Studies, Vol.3, 43-60.
Rachna Choudhary, (2016) Remedies for Breach of E-Contracts, Journal on
Contemporary Issues Of Law, Vol. 3, 1-10
Shubhada Gholap, (2018) Electronic Contracts in India: An Overview, International
Journal of Research in Humanities, Arts and Literature, Vol 6 251 – 260
Zheng Tang, (2007) Parties’ Choice of Law in E-consumer Contracts, Journal of
Private International Law, Vol. 3, 113-136.
Tosi, Emilio, (2015), E- commerce, Virtual Contracts and Consumer Protection Legal
Issues, Bocconi Legal Papers, Vol.6 , 45-88.
Online Websites
Kapil Raina, Evidentiary Value of E-Contracts,
http://www.legalserviceindia.com/article/l127-E-Contracts.html
Seema Jhingan, India: E-Contracts - Legal Validity and Jurisdiction,
https://www.mondaq.com/india/CorporateCommercial-Law/544404/E-Contracts--
Legal-Validity-And-Jurisdiction
Swapnil Mathur, Flipkart screwed me over: Here’s how they could stick it to you as
well. https://www.digit.in/features/internet/flipkart-screwed-me-over-here-s-how-
they-could-stick-it-to-you-as-well-17224.html
Statues