A general overview on E-contract in Cyber Law.

1. Benita Ezeigbo O.
E- CONTRACT

2. INTRDUCTION AND DEFINITION TO E-
COMMERCE
INTRODUCTION AND DEFINITION TO E-
CONTRACT
NATURE OF E-CONTRACT
ELEMENT OF E-CONTRACT
KINDS OF E-CONTRACT
E-CONTRACT AND UBERIME FIDEI
LEGAL VALIDITY OF E-CONTRACT
DIGITAL SIGNATURE
LEGAL ISSUES AND JURISDICTION
DISCHARGE OF E-CONTRACT
ADVANTAGES OF E-CONTRACT OVER
TRADITIONAL CONTRACT
SYNOPSIS

3. The very rapid emergence of industrialisation, globalisation and technicalities formed a great basis
for the growth of technology and the rise of this computer age.
I can say that the creators of computer must not have imagined how super useful their creation
stands globally today.
One of the products of E-commerce is E-contract.
Example can be Online shopping, online banking, Online Auctions etc..
INTRODUCTIONANDDEFINITION TOE-
COMMERCE

4. E-commerce refers to all forms of commercial transactions involving
organizations and individuals that are based upon the processing and
transmission of digitized data, including text, sound, and visual images.
E-commerce is a way to conduct commerce in totality using the internet as a
medium.
E-commerce (electronic commerce or EC) is the buying and selling of goods and
services, or the transmitting of funds or data, over an electronic network,
primarily the internet.
It can either be business-to-business (B-B) business-to-consumer(B-C) consumer-
to-consumer(C-C) or consumer-to-business(C-B)
DEFINITION OFE-COMMERCE

5. Internet was no more just for tabulation and data analysis
The formation of online contract involves several intermediaries of computer
such as ISP.
Instead of the hazard of two business men sending documents by post and
completing it in weeks or months, it can now be completed in seconds.
Though initially refused, many countries have passed laws to recognise E-
contract.
INTRODUCTION OF E-
CONTRACT

6. E-contract is any kind of contract formed in the course of e-commerce by the
interaction of two or more individuals using electronic means, such as e-
mail, the interaction of an individual with an electronic agent, such as a
computer program, or the interaction of at least two electronic agents that
are programmed to recognize the existence of a contract.
E-contract is a contract modelled, specified, executed and deployed by a
software system.
DEFINITIONOF E-CONTRACT

7. 1. Two main parties :Originator and Addressee.
Originator according to the IT Act, 2008 is a person who sends, generates,
stores or transmits any electronic message to be sent, generated, stored or
transmitted to any other person and does not include an Intermediary.
An Addressee according to the IT Act, 2008 is a person who is intended by the
originator to receive the electronic record but does not include any Intermediary.
2. The parties do not, in most cases, meet physically.
There are no physical boundaries.
No handwritten signature and in most times, no hand writing is required.
Since there is no utmost security, risk factor is very high.
Jurisdictional issues are a major setback on e-contracts in case of breach.
NATURE OF E-CONTRACT

8. 3. No authority to monitor the process per se
4. Digital Signatures are used
5. Electronic documents are also used as evidence in court
6. The three main methods of contracting electronically are e-mail, World Wide
Web (www), and Cyber contracts (Click to agree/online contract).
7. The subject matter includes:
(A). Physical goods, where goods are ordered online and paid over internet and
physical delivery is made.
(B). Digitised products such as software which can also be ordered for.
(C). Services like electronic banking, sale of shares, financial advice etc.
NATURE OF E CONTRACT CONTD.

9. 1. Offer
Defined under Section 2(a) Of Indian Contract Act.
Website advertisements are invitation to offer except specified clearly.
When persons respond by mail, fill out online forms built into a web page, they
make an offer which can be either accepted or rejected and so an Invitation to
offer is not capable of making a binding contract on its own until it is accepted.
Thus, an offer when made must carry the intention of entering into a binding
contract.
Does this apply to online contracts? Yes.
When is communication of Offer complete under E-contract?
ELEMENTOF E-CONTRACT

10. 2. Acceptance
Once an offer is accepted, a contract is concluded except the postal acceptance
rule applies.
The postal acceptance rule is an exception to the general rule that acceptance of a
contract must be communicated to the offeror before a contract can be in
existence. Under the rule, acceptance of a contract is said to occur at the time the
acceptance is posted.
Hence, the communication of acceptance is complete against the proposer when
it is put in the course of transmission to him and as against the acceptor when the
acknowledgement enters into the into the designated computer resource.
See Lalman Shukla v. Gaurie Datta Sharma case. A boy on whose head, a ransom was
made was found by a person who knew nothing about the ransom.

11. The Revocation of Offer and acceptance
the Indian Contract Act of 1882 is still in use even for electronic contracts.
However, the both Acts still complement each other.
Section 5 which speaks of revocation will not be applicable as there will be no much
time or time lag in case of electronic contracts, the dispatch and receipt of mail
happens within split of minutes and simultaneously.
3. Lawful consideration
According to the Indian Contract Act, all contracts must have a lawful
consideration. It also applies to E-contracts.
Problems may arise at a time when the consideration is merely executory like when
an online shopping site promises to supply an item. Anther problem is that such
laws cannot apply when an anonymous computer is used.

12. 5. Lawful Object
The purpose of such contract must be a lawful one. Courts will not enforce contracts
that are illegal or violate public policy. Such contracts are considered void.
6. Competent Parties
Natural and Legal persons are competent to contract
A computer is neither a natural or a legal person and so the operator of a computer
comes into the picture
The autonomous computer cannot be a contractual party.
7. Free Consent
The autonomous computer, however, clearly cannot be a contractual party.
This is quite difficult to determine because sometimes the margin used to determine the
strict rule of free consent gets narrower under electronic contracts.
8. Certainty of Terms.

13. 1. Click Wrap Contracts
when an online buyer or user clicks on the I AGREE button on a webpage to
purchase or download a program. The term is derived from the fact that such
agreements most times require clicking an on-screen icon to signal acceptance.
Types of Click Wrap Contract.
A Type and Click is also a kind of Click wrap contract where the user must type I
ACCEPT or other specified words in an on-screen box and then click submit or
similar button. It denotes acceptance of the terms before download can commence.
Icon Clicking is where the user must have to click on OK or I AGREE button on a
dialogue box or pop up window. The user rejects by clicking CANCEL or CLOSING
THE WINDOW.
See Rudder v. Microsoft Corporation case.
KINDS OF E-CONTRACT

14. 2. Shrink Wrap Contract
They are attached to shipped products, usually bound by plastic wrapping that
contains terms and conditions. Usage of the product is deemed acceptance of
the contract.
A shrink wrap license is an end user agreement (EULA) once the end user opens
the packaging, the EULA is considered to be in effect, it includes terms like
licenses, rights of use, fees and payments, forum clauses, warranties, limitations
and liabilities.

15. 1. Consumer do not know the key
terms of the contract.
2. People agree to the terms by using
the software which they have already
purchased.
3. They have questionable
enforceability.
4. Conclusion of contract is by
breaking the seal used to bind.
1. Consumer can go through the terms
of the contract.
2. Allows users to read the terms of the
agreement before accepting them.
3. They have gained universal
acceptance.
4. Through the simple act of clicking the
"accept" button
Shrink wrap Click Wrap
DIFFERENCE BETWEEN SHRINK WRAP AND CLICK WRAP E-
CONTRACTS

16. Uberime Fidei is the Principle of good faith.
one party is entirely dependent upon the information supplied by the other party
on the basis of which alone he expresses his willingness to contract.
It is the foundation of E-contract.
One party acting to his detriment on the representation of the other that he is
competent should not be put to any prejudice.
E-CONTRACT AND UBERIME FIDEI

17. The use of electronic means for executing contracts in India is becoming increasingly common.
This brings us to the fore the question of whether such electronic contracts can constitute
valid contracts under Indian laws.
1. Indian Contract Act- All the terms and conditions of a valid contract must be met as
specified under the Indian Contract Act and all other statutes applicable to an electronic
contract are to be read in conjunction, and not in substitution, with the ICA.
2. The Information Technology Act of 2000 - states that a contract shall not be deemed
unenforceable, solely on the ground that electronic form/means were used for
communication of proposals, acceptance of proposals, revocation of proposals or
acceptances, as the case may.
It also recognises digital signatures as validation of electronic document.
The contents of electronic records can also be proved in evidence by the parties in accordance
with the provisions of the Indian Evidence Act, 1872.
LEGAL VALIDITY OF E-CONTRACT

18. 3. The Ministry of Communication and Information Technology-
Laid down guideline for the use digital signature in E-commerce
Observed that it will serve same purpose as hand written signature.
Empowers Indian courts to recognise electronic message as a formation of
contract.
4. Conclusion of contracts through electronic means, such as through e-mail
communications has been recognized by Indian courts from time to time like in
Shakti Bhog Foods Limited v. Kola Shipping Limited case, Trimex International FZE
Limited, Dubai vs. Vendata Aluminum Ltd case.
Hence, Indian courts accept E-contracts. I do not think they have a choice!

19. People authenticate online transactions and contracts using e- signature to verify the
other person’s identity and as evidence to proof that an agreement was reached.
WHAT IS DIGITAL SIGNATURE
Section 2(p) of The Information Technology Act, 2000 defines digital signatures as
authentication of any electronic record by a subscriber by means of an electronic
method or procedure.
According to Article 2(a) of the UNCITRAL Model Law on Electronic Signatures
2001, Electronic signature means data in an electronic form in, affixed or logically
associated with, a data message, which may be used to identify the signatory in relation
to the data message and to indicate the signatory’s approval of the information
contained in the data message.
DIGITAL SIGNATURE

20. REASONS FOR DIGITAL SIGNATURE
a. Data Integrity
b. Data authentication
c. No chance of disown.
ELEMENTS OF VALID DIGITAL SIGNATURE
a. Identity of Signatory
b. His intention to sign
c. His intention to adopt the content of document as his own

21. Online Identity theft
Phishing
Copyright issues
Non repudiation
Fair dealing and licensing
Domain names issues- The Internet Assigned Numbers Authority (IANA),
manages the Domain Name System (DNS). Problems arise when several
companies having similar names compete over the same domain name.
Jurisdiction issues - Jurisdictional issues in India are determined either by place
of residence or place of business test or cause of action test. Business test is
objective and easy to determine while cause of action test is subjective.
LEGAL ISSUES AND JUSRISDICTION OF E-CONTRACT

22. Jurisdictional issues in India are determined either by place of residence or place of
business test or cause of action test. Business test is objective and easy to determine
while cause of action test is subjective.
Section 13 of IT Act is contrary to Consumer Protection Act. It provides that
where the originator or the addressee has more than one place of business, then
principal place of business shall be deemed as the place were electronic record was
dispatched or received.
The CP Act provides that a consumer can file a complaint against the opposite
party in a District Forum within the local limits of whose jurisdiction the
opposite party, inter alia has a branch office.
The conflict between the both provisions can cause problems to consumers
especially where principal office is situated outside India.

23. 1. How can an electronic record be attributed to the originator? According to Sec 11,
originator can be attributed when:
Electronic record sent by originator himself.
Sent by a person authorised by the originator
An electronic record has been sent by an information system programmed by or on behalf of the
originator.
2. How to determine the acknowledgement of an electronic record when the originator
has not agreed with addressee regarding acknowledgement of receipt?
According to sec (12)(i)
the acknowledgement of the electronic record when the originator has not agreed with the
addressee regarding acknowledgement of receipt in particular form can be done in the
following manner:
Any communication by the addressee to the originator either electronically or otherwise. OR
Through any conduct sufficient to communicate to the originator that the electronic record has
been received by the addressee.
OTHER LEGALISSUES OF E-CONTRACT

24. 3.How to determine time and place of dispatch of an electronic record?
Solution :- section 13 deals with the time and place of dispatch of electronic records as if the
originator or addressee has or has not agreed, the dispatch of an electronic record is complete
when it enters the computer resource of the addressee as to outside the control of the originator.
According to section 13 (2) the time of receipt of an electronic record can be determined in the
following ways :-
(a) If the addressee has designated a computer resource for the purpose of receiving electronic
records.
(i) Receipt occurs at the time when the electronic, record enters the designated Computer
resource.
(ii) If the electronic record is sent to a computer resource of the addressee that is not the
designated computer resource, receipt occurs at the time when the electronic record is retrieved
by the addressee;
(b) If the addressee has not designated a computer resource along with specified timings, if any,
receipt occurs when the electronic record enters the computer resource of the addressee.

25. According to section 13(4):-
The place where the computer resource is located may be different from the place
where the electronic record is deemed to have been received under sub-section (3).
According to section 13(5):-
(a) If the originator or the addressee has more than one place of business, the
principal place of business, shall be the place of business.
(b) If the originator or the addressee does not have a place of business, his usual
place of residence shall be deemed to be the place of business.
(c) “Usual place of residence”, in relation to a body corporate, means the place
where it is registered.

26. The e-contract is discharged the same way as the offline or conventional contract.
a. by performance,
b. impossibility of performance,
c. by agreement and by breach.
In e-contract, it is mostly by recission where the both parties can rescind the
contract by mutual agreement. The remedy is also the same as in offline contracts
according of Indian Contract Act and Specific Relief Act.
The electronic contract has brought some sort of confusion in the case of
injunction when used as a remedy. How will the parties impose injunction on
another party that can physically not be reached or even seen. Aside this, all other
remedies apply.
DISCHARGE ANDREMEDY FOR E-CONTRACT

27. Recently, due to the time taken in the adversorial system of court
proceedings, people mostly go for ADR’s.
In most e-contracts, the arbitration clause is specifically given.
Times have moved on and there is an emergence of ODR’s that is Online
Dispute Resolutions which play a very important role in e-contract issues, so
in place ADR, it is now ODR.

28. a. Time Saving(A transaction can be completed in few seconds without physically
reaching out to the customers. Moreover, there are no office hours in cases of
Ecommerce transactions).
b. Building customer relationship(Regular feedback from the customers can easily
be obtained with the help of e-mail. The after sales service becomes easy through
the internet).
c. Reduction in distribution cost (It establishes direct link between the customers
and the suppliers. Commission paid to middlemen is done away with. Moreover the
cost of documentation, transportation and cost of collection from the customers
are negligible).
d. An attractive option for the physically challenged
a. Huge varieties(Customers can easily select products from different providers without having to
go around physically).
ADVANTAGES OF E-CONTRACT

29. In all ramifications, electronic contracts have been positive enough to human living
that it is now a do-without in our day to day living. At the same time, its venom
cannot be overlooked.
Privacy issues are my most dreaded concerns. The authenticity to protect
information are so uncertain and yet, so unavoidable in most cases.
Laws should be appropriately reformed to suit into the already coming ugly face of
electronic contracts and e-commerce in general. Consumer protection should be the
springboard to foster these laws as the persons on the other hand will not have
much to lose.
While determining this, global expansion of technology should not be hampered or
subdued as to becoming inaccessible for the common man.
Benita Ezeigbo O…
CONCLUSION