With the advancement of technology and the prevailing internet era, everything is becoming digitalized along with government’s effort to promote digital India. It has changed the manner in which the people operate and run their businesses. This has led to the development and expansion of Ecommerce industry globally, especially after the outbreak of Covid. To carry out any business, there needs to be an enforcement of a contract to regulate the rights, duties and liabilities of the parties to the contract. Similarly, to carry out an online business, parties need to enter into an electronic contract (‘E-contract’). Unknowingly, all of us enter into e-contracts in our everyday life like whenever we visit a website or order something from an app or website we are entering into a contractual relationship with the respective website.
An E-contract or a digital contract is simply a contract which is created and executed electronically over internet. It is same as a paper-based contracts except that the parties to the contract get into a contract into via electronic means like e-mails, mobile apps, website forms, EULA (End User License Agreement) and so on.
The laws which govern these e-contracts are same as the laws which govern any ordinary paper-based contract. All the provisions of Indian Contract Act, 1872 like offer, acceptance, consideration, free consent, lawful object and so on are applicable to the E-contracts as well to make it enforceable in law. Moreover, The Bharatiya Sakshya Adhinyam, 2023 and Information Technology Act, 2000 (‘IT Act’) are also applicable which asserts the validity and enforceability of the E contracts. The E-contracts derives its validity from Section 10A of the IT Act, 2000 which states that “Where the formation of the contract, offer and acceptance of the contract, as the case may be, are expressed in electronic form, such contract shall not be deemed unenforceable mere on the ground that it was created electronically.” In addition to this, the presence of electronic signature is an essential requirement to represents the parties in the e-contract. Digital signature provides absolute authentication to the e-contracts and are governed by the IT Act. Section 4 of the Act states that where any law requires any information to be in written form, then the presence of the information in the electronic form is also accepted by the law. Lastly, the Bharatiya Sakshya Adhinyam, 2023, considers the evidence in the electronic form admissible and sufficient to prove a ground in the court as provided under Section 63 of the Act. Moreover, Section 85 of the Bharatiya Sakshya Adhinyam, 2023, mandates the presences of an electronic signatures on the e-contracts.
In recent times, e-contracts are gaining immense popularity as parties can enter into contractual ties by residing in any part of the world without meeting in person. Thus, there are no territorial restrictions. Also, these contracts are time saving and cost efficient. However, there are numerous risks factors associated with such types of contracts like frauds of online platforms.
Thus, it is necessary to get your Contracts drafted from an experienced and expert Counsel who is aware of all the loopholes, frauds or issues which might be faced by the parties in future.
