Formation And Challenges Of Electronic Contract In Cyberlaw

KEY TAKEAWAYS

• Definition of E-Contract.
• The essential element required to form an E-Contract.
• Types of E-Contract
• The challenges faced regarding such a contract
• Legal validity of E-Contract and Conclusion.

E-CONTRACT DEFINITION

It is a contract between two parties using electronic means and known as an online contract or cyber contract or digital contract. It a kind of contract formed in e-commerce whereby two or more parties interact using electronic means such as e-mail, the electronic agent being a computer to recognize the existence of a contract.

The goods and services are exchanged between the parties for consideration. This type of contract is like that of a contract on paper, except because they are drafted and signed electronically. In such a type of contract, the seller can reach the consumer directly with no intervention from the middleman.

Sir William states that a contract is a legally binding agreement between two or more people and the person gains the rights by one or more acts or forbearance by others. All the principles and remedies available regarding traditional contract also apply on E-Contract. It plans and implements commercial contract policies within electronic business.

The E-Contract formed on the doctrine of Uberrimae fidei and it is a Latin term that means with utmost good faith. In Electronic Contract, the parties are in direct contract with each other due to which the hiding of material facts and chances of misfortune is very negligible and thus parties depend on each other from all information.

ESSENTIAL ELEMENTS OF E-CONTRACT

The essential elements of e-contract are very similar to that of the paper-based contract. The below-stated elements are stated in the essential for the formation of an Electronic Contract.

Offer

In a contract, whether be it on the web or regular, the offer isn’t made legally person to person. The buyer browses the stock and enterprises which appear at the vendor’s site and subsequently picks whatever he might want to buy. The site displaying the items available to be bought at a particular cost does not make this endorsement. This being a major challenge to the proposal and hence revoked whenever up to the hour of acceptance. The customer gives the proposal on displaying the things in the practical ‘crate’ or ‘the shopping basket’ for installment.

Acceptance

There must be an acceptance of an offer. The next step after the offer is the acceptance where the seller accepts the offer made by the client considering a proposal to treat. The seller has the power to revoke such an offer before we make an acknowledgment.

Lawful consideration

Lawful consideration is an essential element for a contract to get it enforceable. However, the quantitative value of consideration is immaterial.

Lawful object

The presence of a lawful object in the contract is a must. A contract presumes the legality of the object of the contract. So, an arrangement for selling opiate medications or sensual entertainment films online is void.

Competent party

All the parties to the contract must be legitimate to form a contract. The person who is minor, maniacs, insolvents are not competent to contract and therefore the contract so formed with them is void.

Intention

The parties to the contract must have an aim to form legal relations. If it can be seen that chances of lawful connection are zero from the parties’ side, then the probability of shaping any agreement between them is zero.

Free Consent

For a contract to be valid there must be absolute and free consent. The consent seems to be free if pressure, misrepresentation, or deception brought it about. In an electronic contract, the consent is free and the navigating method guarantees authenticity.

To make an E-Contract valid all the above-provided elements must be fulfilled.

TYPES OF E-CONTRACT

There are three types of e-contract and the same mentioned below:

The Click Wrap Agreements

In this agreement, a party after experiencing the situations and rules mentioned on the system or site needs basically to validate their consent in front of the corresponding, by clicking the ‘I Agree’ option or decrease by clicking on ‘I Disagree’. They usually do this kind of confession before accepting the product. They used this type of agreement on the web, irrespective of whether it be conceding of consent to get to a webpage or downloading the product, or selling something through a site and known as agreeing by lead. By selecting any of these decisions, he accepts or decays the terms. If he disagrees, the cycle ends.

In Rudder vs. Microsoft Corporation , the offended parties started a genuine demand proclaiming break by the Microsoft Company of some specific payment conditions regarding Microsoft’s MSN Member Agreement. The agreement can be seen as the online “click-wrap” arrangement on which everybody should look down and read all the instructions and after giving their consent by clicking on the “I Agree” option before permitting the management. Regardless of the reality that the party to the contract who professed wanted to lean on some standings of the Member Agreement, in putting forth the pursuit, the aggrieved side argued that the resolution made with the help of law and gathering determination provisos whose permission was tried by Microsoft. The aggrieved side argued that in the fact's acknowledgment that the complete Member Agreement was not possible at one moment as they weren’t conversant with any arrangement like this due to which they could not implement it. The Hon’ble Court discovered that the Member Agreement was enforceable because browsing some pages was like turning some pages of a big paper-based contract and by not upholding the arrangement, there is the likelihood of tumult within the commercial center, render insufficient E-Trade & subvert the uprightness of any understanding went into.

Shrink Wrap Agreements

In this type of agreement, an offer to have software in the shop, via e-mail, or on the web has brought about a substantial number of particular types of allowed agreements. This type of agreement contains the CD-ROM of software. They printed the terms and conditions of such a contract on the cover of CD-ROM. Sometimes additional terms are enforced when such licenses show on the screen when the CD downloaded to the computer. The user may return if the new terms and conditions are not to his liking. The Communication of an offer or acceptance in the web-click mode is complete when the addressee receives the electronic record.

The validity of the Shrink-wrap agreements for the first came up for concern in the famous case of Pro Cd, Inc v. Zeidenburg , where it was held by the court that the very fact that purchased after reading the terms of the license featured outside the wrap license opens the cover coupled with the fact that he accepts the whole terms of the license that appears on the screen by a keystroke, constitutes.

Browse Wrap or Web Wrap Contracts:

The client discovers the rules and regulations at any place on the page which offers to sell items and traveling is known as a web wrap contract. There is an acknowledgment of the situations mentioned in the rules and regulations by utilizing their web page for buying a product or administration which is proposed in it.

LEGAL PROVISIONS OF E- CONTRACT IN INDIAN LAW

Indian Contract Act, 1872

This act regulates how contracts formed and enacted in India, so any agreement formed must fulfill the sections of the respective act to enforce it legally. If the use of the electronic medium done, then also that contract will be held valid and enforceable, irrespective of the fact that the information was sent through a database, the confirmation of the will is important, implemented and it is enforceable.

The Information Technology Act, 2000

The Information Technology Act, 2000 came up with the legal acknowledgment to the exchanges and deals that take place through electronic mode. The electronic agreements are legitimate under the IT Act, 2000. Section 3 of the IT Act, 2000 provides for the verification of the electronic contracts and the same is affirmed by fixing the electronic signatures on them by both parties. Electronic signature or electronic validation method which will be viewed as solid did confirmation of electronic record. In such a manner, the electronic agreement can be made by advanced marks and is professed by the laws in India.

Section4 of the IT Act, 2000 ensure lawful recognition of e-records, where information is recorded as a hard copy printed or typewritten structure is made available to a client in the electronic structure for ensuring reference will be deemed to have fulfilled the necessity of law.

Section 10A of the IT (Amendment) Act, 2008 unmistakably expresses the validation of agreements via electronic medium. It moreover sets out the instruments to which the IT Act, 2000 doesn’t matter, and it includes debatable instruments, a trust deed, a will, power of attorney, and agreements available to be moved or purchased for Immovable Property.

Indian Evidence Act, 1872

The computerized camera, advanced camcorders, videoconference, and advanced voice note recording instruments add the above measurement like other measurements in the system of evidence. Electronic gadgets are given the status of evidence in the Indian Evidence Act. The provisions 85A, 85B, 88A, 90A, and 85C deal with the assumptions as to electronic records, though, Section 65B identifies with the admissibility of the electronic record.

Payment and Settlement Act, 2007

As technology is growing, the need for carrying cash with oneself has been decreasing because of the accessibility to online payment options. Payment and Settlement Systems Act, 2007 provides legitimate composition to vendors that use online mode to pay money. Just like the 2007 PSS Act, the Payment, and Settlement System Regulations, 2008 formed under the very Act became effective from 12 August 2008. The RBI gave some more rules asserting that every single entryway and the payment software needs to register under the demonstration.

Electronic Commerce Act, 1998

For an electronic contract to be valid, the following requirements shall be fulfilled:

The existence of a strong electronic record is necessary.

All the electronic records need to be kept safe.

The presence of a reliable digital imprint should be there.

The communication of electronic administrators should be present which confirms or illustrates.

We have seen that electronic contract helps many people, and it reduces the difference between the buyer and seller in different ways.

LEGAL CHALLENGES OF E-CONTRACT IN CYBERLAW

Jurisdictional Issue: The issue relating to jurisdiction is highly debatable and conflicting in cyber law regarding the issue concerning the maintainability of the suit that has been filed. This issue has become more complex largely because the internet is borderless. In domestic transactions, the court always has the jurisdiction to impose their respective laws within their geographical, physical and political boundaries, but the enforcement pitches up several for international transactions as the constant change in technology in borderless cyber law. The U.K. and U.S. courts came up with certain principles and tests which helped in elaborating jurisdiction and the Indian Courts follow the same.

In Professor Amices Mahapatra’s case, Professor Amices Mahapatra was arrested on account of the forwarding of cartoons on Facebook. Further, Ravi Srinivasan Twitter case showed how on a complaint, a person’s tweets could be brought within the ambit of Section 66A of the amended Indian Information Technology Act, 2000.

In the K V Rao case, two men K.V. Rao and Mayank from Mumbai were arrested for supposedly posting offensive comments against some leaders on their Facebook group. Introducing the internet leads to the transmission of information and transacting of business across borders and raising various issues related to cyberlaw. Some of the major issues include cybercrime, cyber forensic, intellectual property, E-commerce, Electronic Evidence, and privacy. One of the greatest lacunas in resolving such issues is the absence of comprehensive law anywhere in the world. The problem is further aggravated because of the disproportionate growth ratio of the Internet and cyber law. Though a start has been made by the enactment of the I.T. Act and Amendment made to Indian Penal Code, Indian Evidence Act, etc, to deal with the problems associated with regulation of cybercrime continues to persist.

Cyber Crime: Cybercrime is committed over the Internet. It could be against the property, person, or government in several forms. These days, law enforcement agencies are facing problems in dealing with cybercrime. Information Technology Act, 2000 is the legislation that deals with an issue related to cybercrime. Some observe that cybercrime is a bigger threat to India compared to physical crime. The National crime records Bureau, Ministry of Home Affairs conducted A survey which shows that cybercrime is increasing day by day in several forms.

Contractual Difficulties: India has emerged as a major player in the computer software and resources sector. It has been shown in data that India will have the largest number of internet users in Asia in the future. It will lead to advancement in the e-commerce business and thus making it necessary to ensure that the contract is valid and made as per requirements of law. The IT Act deals with some contractual aspects in E-commerce. Still, several practical problems arise regarding such a contract.

LEGAL VALIDITY OF E-CONTRACT

Legal validity of E-Contract -Electronic contracts are governed by the basic principles explained in the Indian Contract Act, 1872, which mandates that a valid contract should have been entered with free consent and for a lawful consideration between two adults.6 It also finds acknowledgment under section 10A of the Information Technology Act, 2000 that provides validity to e-contracts. Therefore, both Indian Contract Act, 1872and Information Technology Act,2000 needs to be read in combination to understand and provide legal validity to e-contracts.

CONCLUSION

India has emerged as a major player in the computer software and resources sector. It has been shown in data that India will have the largest number of internet users in Asia in the future. It will lead to advancement in the e-commerce business and thus making it necessary to ensure that the contract is valid and made as per requirements of law. So, to ensure transparency in e-commerce, there is a need that we should follow the law regarding such matters to avoid cybercrime and to achieve the aim of making India a Digital India.

We have seen that in practicality India faces a lot of cybercrime and the major reason behind it is the lack of comprehensive law. So, making it necessary to ensure that there is the development of proper legislation in this respect.