E-contracts have become an essential part of the modern business world due to the increasing popularity of e-commerce. In India, e-contracts are governed by the Information Technology Act, 2000, and the Contracts Act, 1982. In this article, we will discuss the types of e-contracts and their enforceability in India.
Types of e-contracts:
- Click-wrap contracts: A click-wrap contract is an electronic agreement where the user agrees to the terms and conditions of a website or application by clicking an “I agree” button. These contracts are common while using mobile applications or browsing websites. Click-wrap contracts are enforceable in India if the terms and conditions are visible and accessible to the user.
- Browse-wrap contracts: In a browse-wrap contract, the user is not explicitly required to accept the terms and conditions of the contract. Rather, the terms and conditions are made available to the user through a hyperlink or a pop-up window. Due to this lack of explicit acceptance, browse-wrap contracts are not considered to be enforceable in India.
- Shrink-wrap contracts: A shrink-wrap contract is an agreement where the terms and conditions are included in the packaging of a product. These contracts are often used for software or other electronic products. In India, shrink-wrap contracts are enforceable if the terms and conditions are visible on the outside of the package, and the user has an opportunity to return the product if they do not agree to the terms.
- E-mail contracts: An e-mail contract is an agreement made through the exchange of e-mails. E-mail contracts are enforceable in India if the terms and conditions are clear and unambiguous. However, the authenticity of e-mails must be proven in a court of law.
Enforceability of e-contracts in India:
E-contracts are subject to the same legal framework as traditional contracts in India. They must meet the same legal requirements to be considered valid and enforceable. These requirements include an offer, acceptance, consideration, and a clear intention to enter into a contractual relationship.
The Information Technology Act, 2000 provides additional provisions for the enforceability of e-contracts in India. Section 10A of the Act was introduced in 2018 to address concerns regarding the enforceability of electronic contracts. This section provides that the validity of an e-contract cannot be denied solely on the grounds that it is in an electronic form or that it has been signed using an electronic signature. E-contracts are considered valid and enforceable if they meet certain conditions, such as being created with the intent to create legal relations, having the appropriate consent of the parties, and having the ability to be accessed and retained in a manner that is usable for future reference.
The use of electronic signatures is an essential consideration for e-contracts in India. Section 10A of the Information Technology Act allows electronic signatures to be valid and enforceable, provided they meet certain requirements, such as uniqueness, identification, and the ability to identify changes made to the electronic record. Valid electronic signatures require compliance with specific requirements, such as obtaining a digital signature certificate from a licensed certifying authority.
In conclusion, the enforceability of e-contracts in India requires careful consideration of the legal requirements for a valid contract, as well as compliance with the Information Technology Act of 2000. Companies that conduct business online in India should ensure that their e-contracts comply with legal requirements and provide clear notice of the terms and conditions. Additionally, the use of electronic signatures should be managed to meet the legal requirements for validity and enforceability. With proper compliance and management, e-contracts can be a valuable tool for conducting business in India’s growing digital economy.