Today with the recent advancement in the areas of computer technology, telecommunications

technology, software and information technology have resulted in changing the standard of living of
people in an unimaginable way. The communication is no more restricted due to the constraints of
geography and time. Information is transmitted and received widely and more rapidly than ever
before. And this is where the electronic commerce offers the flexibility to business environment in
terms of place, time, space, distance, and payment. This e-commerce is associated with the buying
and selling of information, products and services via computer networks. It is a means of transacting
business electronically, usually, over the Internet. It is the tool that leads to enterprise integration.
With the growth of e-commerce, there is a rapid advancement in the use of e-contracts. But
deployment of electronic contracts poses a lot of challenges at three levels, namely conceptual,
logical and implementation. In our article we have discussed the scope, nature and legality and
various other issues related to e-contracts.

Definition: E-contract is a contract modeled, specified, executed and deployed by a software system.
E-contracts are conceptually very similar to traditional (paper based) commercial contracts. Vendors
present their products, prices and terms to prospective buyers. Buyers consider their options,
negotiate prices and terms (where possible), place orders and make payments. Then, the vendors
deliver the purchased products. Nevertheless, because of the ways in which it differs from traditional
commerce, electronic commerce raises some new and interesting technical and legal challenges.

For recognition of e-contracts following questions are needed to be considered:

# Whether e-contract is a valid contract?
# Would a supplier making details of goods and services with prices available on a website be
deemed to have made an offer?
# Whether e-contracts satisfy the legal requirements of reduction of agreements to signed documents.
# Whether e-contracts interpret, adopt and compile the other existing legal standards in the context of
electronic transactions?

Recognition E-contracts
Offer: The law already recognizes contracts formed using facsimile, telex and other similar
technology. An agreement between parties is legally valid if it satisfies the requirements of the law
regarding its formation, i.e. that the parties intended to create a contract primarily. This intention is
evidenced by their compliance with 3 classical cornerstones i.e. offer, acceptance and consideration.
One of the early steps in the formation of a contract lies in arriving at an agreement between the
contracting parties by means of an offer and acceptance. Advertisement on website may or may not
constitute an offer as offer and invitation to treat are two distinct concepts. Being an offer to
unspecified person, it is probably an invitation to treat, unless a contrary intention is clearly expressed.
The test is of intention whether by supplying the information, the person intends to be legally bound or
not. When consumers respond through an e-mail or by filling in an online form, built into the web
page, they make an Offer. The seller can accept this offer either by express confirmation or by
conduct.

Acceptance:
Unequivocal unconditional communication of acceptance is required to be made in terms of the offer,
to create a valid e-contract. The critical issue is when acceptance takes effect, to determine where
and when the contract comes into existence. The general receipt rule is that acceptance is effective
when received. For contracting no conclusive rule is settled. The applicable rule of communication
depends upon reasonable certainty of the message being received. When parties connect directly,
without a server, they will be aware of failure or partial receipt of a message. Such party realizing the
fault must request re-transmission, as acceptance is only effective when received. When there is a
common server, the actual point of receipt of the acceptance is crucial in deciding the jurisdiction in
which the e-contract is concluded. If the server is trusted, the postal rule may apply, if however, the
server is not trusted or there is uncertainty concerning the e-mails route, it is best not to apply the
postal rule. When arrival at the server is presumed insufficient, the receipt at the mail box rule is
preferred.

Consideration and Performance:

Contracts result only when one promise is made in exchange for something in return. This something
in return is called consideration. The present rules of consideration apply to e-contracts. There is
concern among consumers regarding Transitional Security over the Internet. The e-directive on
Distance Selling tries to generate confidence by minimizing abuse by purchasers and suppliers. It
specifies---
# A list of key points, must be supplied to the consumer in a clear and comprehensible manner.
# Written confirmation, or confirmation in another durable medium available and accessible to the
consumer, of the principle points.
# The right of withdrawal enabling consumers to avoid deals entered into inadvertently or without
sufficient knowledge, providing for seven-day cooling-off period free from penalty or reason to return
the goods or reimburse the cost of services.
# Performance should be delivered within thirty days of order unless otherwise expressly agreed.
# Reimbursement of sums lost to fraudulent use of credit cards. It places the risk of fraud on the credit
card Company, requiring them to take steps to protect their position.
# On the other hand, there is also need to protect sellers from rogue purchasers. For this, the
provision of charge-back clauses and encouragement of pre-payment by buyers is recommended.
# Thus, this Directive adequately protects rights of consumers against unknown sellers and sellers
against unknown buyers.

Liability And Damages:

A party that commits breach of an agreement may face various types of liability under contract law.
Due to the nature of the systems and the networks that business employ to conduct e-commerce,
parties may find themselves liable for contracts which technically originated with them but, due to
programming error, employee mistake or deliberate misconduct were executed, released without the
actual intent or authority of the party. Sound policies dictate that parties receiving messages be able
to rely on the legal expressions of the authority from the senders computer and this legally be able to
attribute these messages to the sender.

In addition to employing information security mechanisms and other controls, techniques for limiting
exposure to liability include:
1. Trading partner and legal technical arguments
2. Compliance with recognized procedures, guidelines and practices
3. Audit and control programmers and reviews
4. Technical competence and accreditation
5. Proper human resource management
6. Insurance
7. Enhance notice and disclosure mechanisms and
8. Legislation and regulation addressing relevant secure electronic commerce issuing.

Digital Signatures: 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. A digital signature functions for electronic documents like a handwritten signature does for
printed documents. The signature is an unforgeable piece of data that asserts that a named person
wrote or otherwise agreed to the document to which the signature is attached. A digital signature
actually provides a greater degree of security than a handwritten signature. The recipient of a digitally
signed message can verify both that the message originated from the person whose signature is
attached and that the message has not been altered either intentionally or accidentally since it was
signed. Furthermore, secure digital signatures cannot be repudiated; the signer of a document cannot
later disown it by claiming the signature was forged. In other words, digital signatures enable
"authentication" of digital messages, assuring the recipient of a digital message of both the identity of
the sender and the integrity of the message. The fundamental drawback of online contracts is that if
there is no alternate means of identifying a person on the other side than digital signatures or a public
key, it is possible to misrepresent ones identity and try to pass of as somebody else.

Conclusion:
E-contracts are well suited to facilitate the re-engineering of business processes occurring at many
firms involving a composite of technologies, processes, and business strategies that aids the instant
exchange of information. The e-contracts have their own merits and demerits. On the one hand they
reduce costs, saves time, fasten customer response and improve service quality by reducing paper
work, thus increasing automation. With this, E-commerce is expected to improve the productivity and
competitiveness of participating businesses by providing unprecedented access to an on-line global
market place with millions of customers and thousands of products and services. On the other hand,
since in electronic contract, the proposal focuses not on humans who make decisions on specific
transactions, but on how risk should be structured in an automated environment. Therefore the object
is to create default rules for attributing a message to a party so as to avoid any fraud and discrepancy
in the contract.
With the advancements in computer technology, telecommunication and information technology the
use of computer networks has gained considerable popularity in the recent past, computer networks
serve as channels between for electronic trading across the globe. By electronic trading we dont just
mean the use of computer networks to enter into transaction between two human trading partners by
facilitating a communication but electronic trading or electronic commerce also means those contracts
which are entered between two legal persons along with the aid of a computer program which acts as
an agent even when it has no conscious of its own but also by initiating it.

A commercial transaction can be divided into three main stages: the advertising and searching stage,
the ordering and payment stage and the delivery stage. Any or all of these may be carried out
electronically and may, therefore, be covered by the concept of electronic commerce. Broadly
defined, electronic commerce encompasses all kinds of commercial transactions that are concluded
over an electronic medium or network, essentially, the Internet. In India the concept of electronic
commerce has paced up in the last decade. Nowadays the geographical as well as the constraints
with respect to the time limit has very well been overcome by the increasing use of information
technology amongst common people , the scenario present now is completely different to the one
which was prevalent about a decade back when the use of information technology was restricted to
select individuals and the conventional methods of entering into contracts were the sole methods for
entering into a legal relationship.

Meaning of electronic contract:

An e-contract is a contract modelled, executed and enacted by a software system. Computer
programs are used to automate business processes that govern e-contracts. E-contracts can be
mapped to inter-related programs, which have to be specified carefully to satisfy the contract
requirements. These programs do not have the capabilities to handle complex relationships between
parties to an e-contract.

Modes of entering into an econtract:

An electronic contract is an agreement created and signed in electronic form in other words, no
paper or other hard copies are used. For example, you write a contract on your computer and email it
to a business associate, and the business associate emails it back with an electronic signature
indicating acceptance. An e-contract can also be in the form of a Click to Agree contract, commonly
used with downloaded software: The user clicks an I Agree button on a page containing the terms of
the software license before the transaction can be completed.
In spite of slow progress in the field of artificial intelligence, computer systems are now emerging that
can operate not just in an automatic way but autonomously as well. The processes of Artificial
Intelligence includes forming intentions, making choices and giving and withholding consent which
means humans can give substantial autonomy in decision making which permits computer systems to
complete highly complex tasks involving precise judgements. Now the question which arises in our
minds is that whether a computer system can replicate the processes that are regarded as free will of
the humans and what would be the legal consequences of it. These are the questions which make
people apprehensive while entering into a commercial contracts with the aid of a computer system.
Contractual rights must be determined with reference to individuals, the need of the hour is to
ascertain the whether the existing contract law doctrine can cope with the new laws of technology.

Present scenario:
Categorisation of the econtracts can be of two types i.e. web-wrap agreements and shrink-wrap
agreements. We often come across these e-contracts in our everyday life but are unaware of the legal
complexities connected to it. Web-wrap agreements are web based agreements which requires
assent of the party by way of clicking the I agree or I confirm link, for example in case ebay by
which we accept the terms and conditions mentioned by the seller. On the other hand Shrink-wrap
agreements are those which are accepted by a user when a software is installed from a CD-ROM e.g.
Microsoft Office software. Before analysing these concepts we must know how such a contract is
entered into, for convenience let us assume the most simple web wrap agreement entered between
the buyer and seller through a computer network.

A buyer accesses an autonomous computer controlled by a seller wherein the seller has hosted an
item to be sold at a specific price, an interested buyer after satisfying himself makes an order after
reading through the terms and conditions of the seller. The computer then checks the availability of
the item in its stock and then notifies the buyer that the order has been confirmed and is despatched
for its delivery after necessary payment option selected by the buyer. In such a case the actual seller
of the goods is unaware about the fact that the transaction has been entered between him and the
buyer. The question which arises here is that whether such contracts are valid or not.

E-contracts vis--vis conventional forms of contracts:

When it comes to legality/enforceability of such e-contracts entered between two or more parties we
need to look into basic provisions of laws regarding the contracts. Indian Contract Act,1872 lays down
various essentials of a valid contract.
There must be an offer and an acceptance.
There must be two or more separate parties to the contract.
These two parties must be in agreement with each other, i.e., consensus ad idem.
They must intend to create a legal relationship with each other and
There has to be a consideration.
In the present scenario we must analyse if these essentials are complied with or not while entering
into a contract with the aid of a computer program.

Offer and Acceptance:

When a product is advertised on a website and someone accesses that website in order to buy them
then the seller of the goods makes an invitation to offer to public at large through ways similar to
advertisements, catalogues and shop displays, in such a case the seller does not become the offerer
because he is merely inviting offers and not making an offer which a well established doctrine of law
of contracts, now the buyer of the goods make an offer by accepting the terms and conditions of the
seller and offers the seller of the goods to sell the goods at the price marked. When it comes to
acceptance, the question which arises in our mind is that what constitutes an acceptance?
Acceptance as defined in the Indian Contracts Act 1872 means, when the person to whom the
proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal when
accepted becomes a promise. The Act also lays down the provisions regarding the situation when
communication is complete, s.4 of the Act lays down that the communication of a proposal is complete
when it comes to the knowledge of the person to whom it is made. The communication of acceptance
is complete
As against the proposer, when it is put in course of transaction to him, so as to be out of the power of
the acceptor.
As against the acceptor, when it comes to the knowledge of the proposer.

After analysing these two concepts under the Contracts Act, the question that arises in our minds is
that whether the offer made by the buyer comes to the knowledge of the seller before the acceptance
is made by the computer program on his behalf , whether the acceptance on part of the computer
program would amount to a valid acceptance or not. In cases of e-contracts, even though the
communication of acceptance is not complete and the computer program itself accepts the offer on
behalf of the acceptor and that too without any knowledge of the acceptor but still these contract are
deemed to be legal.

In present scenario, if an offer has been made, then prima facie the seller's computer uses the set of
instructions to accept the offer and evince an intention to assent to that offer. But whose intention is it
exactly?
There appear to be three possibilities:
(1) intention may be of the seller's computer alone but since computers are not capable of being
parties, it must follow that we do not have a meeting of minds by the parties themselves; or
(2) intention may be the seller's alone, this view, however, is problematic given that the seller never
knows of the transaction; or
(3) intention may be the seller's though embodied in an e- program of the computer. Can this view be
realistic, though, when the decision to make the offer in question has been formed autonomously by
the seller's computer?

If a question before the court of law comes about the legality of such a contract entered between the
parties through a computer program, in my view the first and the second possibilities are not at all
applicable to the present scenario. The third possibility, however, is more useful because this is
particularly in light of powerful evidence that English courts, at least, are willing to use the option or
unilateral contract device both actively and creatively.

In Great Northern Railway. v. Witham classic formulation of the option or unilateral contract: "If I
say to another, ' I f you go to York, I will give you 100,' that is in a certain sense a unilateral contract.
He has not promised to go to York. But, if he goes it cannot be doubted that he will be entitled to
receive the 100.
What would the effect be of recognising the classic formulation as: "If you order goods from my
computer, I promise to supply those goods."

Here, it may be that the issue of whether or not the specific transaction between the buyer and the
computer amounts to a valid contract is moot when the irrevocable offer, by the controller, matures
into a complete bilateral contract.

Parties to the contract:

On the question as to who is capable, by law, of being a party to a contract? It is generally accepted
that both natural persons and legal persons are capable of entering contracts, Computers are clearly
not natural persons ,and neither American nor English contract law, at present, deem them to be legal
persons. Computers, therefore, are not capable of being parties to contracts. In our scenario, both the
buyer and the seller are natural persons, and consequently, are capable of being parties to the
transaction. The autonomous computer, however, clearly cannot be a contractual party as the law now
stands.

Consensus ad idem:
According to the definition, the minds in question have to be the minds of the parties to the
agreement. In our scenario, can it be said that there is a meeting of the minds in any meaningful
sense? In both American and English contract law, the normal analytical tool used to test for such a
meeting of minds is that of offer and acceptance which has already been discussed.

Intention to create legal relationship:

Another criterion to be considered is that of the intention to create legal relationship. To constitute a
valid contract, the parties must intend to create binding legal relations between themselves. As in the
case of offer and acceptance mechanism, the courts analyze the intentions of the parties from an
objective standpoint. In the case of ordinary, commercial transactions, the courts start from the
presumption that legal relations were indeed intended. If either party wishes to challenge that
presumption, the burden of proof is on the party who asserts that no legal effect was intended. Hence
in the case of the econtracts in the present scenario it is for the court to make clear that there is
existence of a usual presumption applies. In the event that the court proves unwilling to apply the
presumption because of the involvement of an autonomous computer, we must ask ourselves similar
questions to those we addressed when considering the elements of offer and acceptance. In relation
to the present scenario, the buyer's intention to create legal relations gives rise to no difficulties
whereas the seller's intention faces the same three difficulties as discussed above. It is more
problematic to deem that an autonomous computer is capable of forming an intention which is
relevant, or to claim that the human trader has a specific intention as entered by the computer
program and the buyer.

Consideration:
In the present scenario, once an item has been supplied and the price has been paid, the
consideration is executed and the requirement is satisfied. Problems may arise at a time when the
consideration is merely executory. This arises when the seller's computer has done no more than
"promise" to supply that item. A key intention that lies behind such promises is, of course, the intention
to be bound by that promise in other words, the intention to create legal relations. We have already
examined this intention to create legal relations above. Another intention that can be associated with
each promise is the intention to fulfil the promise. In my view, however, this intention can be seen as a
corollary to the intention to create legal relations and thus does not require separate treatment.
It is clear from the above discussion that the involvement of an autonomous computer in the contract
formation process gives rise to considerable doctrinal difficulties and hence the conventional laws with
respect to the contracts between two or more legal persons embodied under the Indian Contracts
Act,1872 can not be applied in cases of econtracts.
E-commerce under IT Act 2001:
In the WTO Work Programme on Electronic Commerce, Electronic Commerce means the production,
distribution, marketing, sale or delivery of goods and services by electronic means and are, therefore,
covered by the concept of electronic commerce. Broadly defined, electronic commerce encompasses
all kinds of commercial transactions that are concluded over an electronic medium or network,
essentially, the Internet and E-commerce covers three main types of transactions, i.e. business-to-
consumer (B2C), business-to-business (B2B), and business-to-government (B2G) and hence E-
commerce can be used as a synonym with the e-contracts.

Legal framework for ecommerce has been provided by the Information Technology Act, 2001, which
makes India only the twelfth country in the world which has such a comprehensive legislation for
ecommerce. This Act also effects consequential amendments in the Indian Penal Code, the Indian
Evidence Act, 1872, and the RBI Act, 1934 to bring them in line with the requirements of digital
transactions. (Similar amendments are being planned for the Companies Act, 1956 to also facilitate e-
commerce and e-governance.)

The IT Act essentially seeks to address three areas or perceived requirements for the digital
era:
(a) to make possible e-commerce transactionsboth business to business and business to consumer

(b) to make possible e-governance transactionsboth government to citizen and citizen to

government
(c) to curb cyber crime and regulate the Internet.

Most of the provisions of the Information Technology Act as promulgated, deals with citizen interaction
with government and certainly a proper and far-reaching mission towards e-governance. But there are
several hurdles before this becomes a reality. The main being that government departments not only
lack the hardware for electronic transactions but will also need to reorient their systems and
procedures before they are ready to interact through electronic documents.

E-governance implies action and commitment of the state and its agencies at two levels:
(a) It involves the promotion of the information and communication technologies and, especially,
e-commerce, on the one hand, and
(b) The adopting of these technologies and all they involve in the matter of a completely new
type of commitment, open systems and use of the medium of the Internet for government
business, citizen interaction, and most important, for development.

But when it comes to laying down of specific rules with respect to the basic essential
 ingredients of a contract in the sphere of econtracts the laws are not extensive enough to
include each and every aspects of a valid contract.

Conclusion:
My concern while writing this article is whether or not computer-generated agreements should
be enforceable as legally binding contracts by trying to draw an analogy between the two
forms of contract. There is certainly nothing about the subject matter of computer-generated
agreements under any law present which should render them unenforceable but the laws
prevalent doesnt even lays down any express provisions when it comes to formation of such
contracts and the difficulties arise only because the legal doctrine of contract law which is
based on an idealized model of communication between natural persons. Therefore the real
issue before us is to determine how the law should be changed, rather than whether it should
be changed. Though the IT Act,2001 provides for some provisions with respect to the
ecommerce but these provisions are restricted to the legality of the ecommerce and the
security of such a transaction but the act doesnt lays down any specific provisions with
respect to the formation of such contracts

It is quite unlikely for most computer literate people in India that a day has passed without him or her
coming across a point while dealing with computers where he or she did not had to manifest his or her
assent to some terms .In case of surfing the Internet, it is generally done by clicking on some icon like
"I Agree" and in cases of installing a software, assent is generally shown by the conduct of tearing the
CD package and using it. Most of us do it as just another "necessary evil" to get our job done.
However miniscule it may seem to a lay man, these actions of ours is of immense importance
because it leads to a valid and enforceable contract and those terms, that we hardly even bother to
read, can be strictly enforced against us.

The Three Basic genre

Generally the basic forms of "E-Contracts" that a person comes across if he is computer savvy are:
The Click-wrap or Web-wrap Agreements.
The Shrink-wrap Agreements.
The Electronic Data Interchange or (EDI).

Now let us see the peculiarities of these contracts and the specific industries that put it to use.

First and foremost are the Click-wrap [1] agreements. Click-wrap agreements are those whereby a
party after going through the terms and conditions provided in the website or program has to typically
indicate his assent to the same, by way of clicking on an "I Agree" icon or decline the same by clicking
"I Disagree". These type of contracts are extensively used on the Internet, whether it be granting of a
permission to access a site or downloading of a software or selling something by way of a website.
Shrink-wrap agreements[2] have derived their name from the "shrink-wrap" packaging that generally
contains the CD Rom of Softwares. The terms and conditions of accessing the particular software are
printed on the shrink-wrap cover of the CD and the purchaser after going through the same tears the
cover to access the CD Rom. Sometimes additional terms are also imposed in such licenses which
appear on the screen only when the CD is loaded to the computer .The user always has the option of
returning the software if the new terms are not to his liking for a full refund.

Electronic Data Interchange or EDI is "The electronic communication between trading partners of
structured business messages to common standards from computer application to computer
application".[3]

In other words they are contracts used in trade transactions which enables the transfer of data from
one computer to another in such a way that each transaction in the trading cycle (for example,
commencing from the receipt of an order from an overseas buyer, through the preparation and
lodgment of export and other official documents, leading eventually to the shipment of the goods) can
be processed with virtually no paperwork.[4] Here unlike the other two there is exchange of
information and completion of contracts between two computers and not an individual and a
computer.

The Cardinal Question

Now we come to the cardinal question: Are these agreements valid and binding contracts in the eyes
of law? Can they be enforced and if so why!
The very basic bedrock of any contract is the intention to enter into a legal relationship and that there
should be meeting of minds. But as it must be already clear by now that in most of these contracts
the party assenting to the terms does it without knowing or having intention to enter into any contract
and even if has knowledge of the terms has no meaningful choice but to adhere to certain standard
clauses put by the other party, thereby frustrating the very concept of meeting of minds.

But all these contracts are held valid and enforceable in a catena of judgments and statutory
recognition of its validity is also forthcoming.

The Click-wrap or Web Wrap Agreements

Judicial Decisions
The question of the validity of Click-wrap agreements came for consideration for the first time in 1998
in the famous case of Hotmail Corporation v. Van $ Money Pie Inc, et al ,[5]where the court for
northern district of California indirectly upheld the validity of such licenses where it said "that the
defendant is bound by the terms of the license as he clicked on the box containing "I agree" thereby
indicating his assent to be bound"[6]. This decision was followed and upheld in a catena of judgments
like Groff v. America Online, Inc,[7] Steven J. Caspi, et al v. the Microsoft Network LLC, et al[8] and I
lan Systems, Inc v. Netscout services Level corp[9]

Statutory Recognition
Legislators have recognized the validity of mass market licenses like Click-wrap and Shrink-wrap
whose proof is the proposed Article 2B of the UCC[10] which is now replaced by NCCUSL[11] with the
UCITA[12] which was passed by the majority of the states of America on the 29 th of July 1999.

Sec 209 of the UCITA states that the terms and conditions of the mass-market licenses can only be
effectively adopted if the other party agrees to the license by manifesting his or her assent before or
during the partys initial performance or use and access of the information.

Sec 112 of the same deals with how assent can be manifested .It clearly lays down that a person can
manifest assent to a record or a term by his conduct if he intentionally engages in such conduct with
reasons to know that such behavior will be construed by the other party or his electronic agent to be a
form of assent. But all this will only hold good if the terms and condition are within the knowledge of
the party assenting and that he has the chance to review the same. Thus in a Click-wrap license if a
person reads the terms and clicks "I agree" he assents to the same by way of Sec 209&112.

In the Illus 1 attached to Sec 112 the example of the NY online registration is given whereby a party
can either chose to accept the terms by clicking the "I agree" button or decline the same by resorting
to "I decline". It is made clear that whoever clicks "I Agree" assents to the license and adopts its
terms.

Apart from the UCITA even UNICITRAL[13] Model law on Electronic Commerce (1996) in Sec 11
gives statutory recognition of Click-wrap licenses where it says that an offer and acceptance can be
validly expressed by data messages which include information generated, sent, received or stored by
electronic, optical or similar means including, but not limited to, electronic data interchange (EDI),
electronic mail, telegram, telex or telecopy.[14]

Mention may be also made of Indias Information Technology Act 2000 whereby by way of Sec 11 the
legislators accept offer by way of data message either by himself or by any electronic system
programmed for that specific purpose. (Which would include offer in case of Click-wrap) but is silent
as regards mode of assent or acceptance of the same.
Thus Click-wrap agreements are valid and enforceable contracts as far as offer and acceptance is
concerned.

The Shrink-wrap Agreements

Judicial Decisions
The validity of the Shrink-wrap agreements first came up for consideration in the famous case of
ProCd, Inc v. Zeidenburg [15]where it was held "that the very fact that purchaser 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 key stroke, constitutes an
acceptance of the terms by conduct. ProCds lead was also followed in a no of judgments like
Compuserve Inc v. Paterson,[16] Hill v. Gateway 2000, Inc,[17]Tony Brower et al v. Gateway 2000,inc
et al [18]and many others.

Statutory Recognition
As it is already clear from Sec 112 and Sec 209 of the UCITA that mass market licenses like Click-
wrap can be assented to by way of conduct, it is but a logical conclusion that the very conduct of the
purchaser of softwares(which have Shrink-wrap licenses on them), by which he tears the wrap and
uses the CD after reading the terms and condition, manifests his or her assent to the terms. [19]
Additional terms might be displayed on the screen when the purchaser is loading the CD on to the
computer after tearing the Shrink-wrap, which had the initial terms of the license. The question is
these terms enforceable too. It is clear from Sec 208 (2) that in a mass-market license, if the parties
had reason to know that terms would be proposed later for assent and the later terms are agreed on,
there is a contract including those terms; but if the later terms are rejected, there is no contract under
Section 209(b).
Thus Shrink-wrap agreements are valid and enforceable contracts.

Electronic Data Interchange EDI

Judicial decisions
There are no reported cases on the enforceability of EDI as of recently[20] and as such we have to
resort to statutory provisions to establish the validity of EDIs

Statutory provisions
A plain and simple reading of Sec 206 of the UCITA reveals that legislators have recognized the fact
that a contract can be formed by the interaction of two electronic agents .For the above to occur it
stipulates that there has to be offer and acceptance of the offer by the agents.
Under Sec 112 of the same it is further laid down that an electronic agent can manifest its assent to a
term if after reading the terms it engages in operations that in the circumstances indicate acceptance
of the term.
An example may prove to be handy; say one computer X sends an order for two hundred kg of rice to
another computer Y of the supplier as agreed by the EDI agreement beforehand by the two parties.
Computer Y according to Sec 112 will accept the offer if it starts sending a receipt of the bill for such
order to computer X.

Thus even EDIs are valid and binding contracts under the UCITA.
It will be also pertinent to mention over here that Sec 11 of the UNICITRAL recognizes the validity of
EDI wherein it has expressly laid down that offer and acceptance by electronic agents especially
EDIs are valid and binding contracts.

Conclusion
So the next time you uninterestingly click on an "I agree" button without even caring to see the terms
or hurriedly tear the wrap of software CD being least interested about the terms typed on it "Think
Twice"! They are all are valid contracts and you could be made liable for the terms and conditions laid
down there.

Its an undisputed fact that E-Commerce has become a part of our daily life. One such justification for
the popularization of E-Commerce would be immoderate technological advancement. E-Commerce,
as the name suggests, is the practice of buying and selling goods and services through online
consumer services on the internet. The e used before the word commerce is a shortened form of
electronic. The effectiveness of E-Commerce is based on electronically made contracts known as E-
Contracts. Although E-Contracts are legalized by Information Technology Act but still majority feels
insecure while dealing online. The reason being lack of transparency in the terms & conditions
attached to the contract and the jurisdiction in case of a dispute that may arise during the pendency of
a transaction with an offshore site.

What Are E-Contracts

In the words of Sir William Anson, a contract is a legally binding agreement between two or more
persons by which rights are acquired by one or more to acts or forbearance on the part of the other or
others.

E-Contract is an aid to drafting and negotiating successful contracts for consumer and business e-
commerce and related services. It is designed to assist people in formulating and implementing
commercial contracts policies within e-businesses. It contains model contracts for the sale of products
and supply of digital products and services to both consumers and businesses.

An e-contract is a contract modeled, executed and enacted by a software system. Computer

programs are used to automate business processes that govern e-contracts. E-contracts can be
mapped to inter-related programs, which have to be specified carefully to satisfy the contract
requirements. These programs do not have the capabilities to handle complex relationships between
parties to an e-contract.

An electronic or digital contract is an agreement drafted and "signed" in an electronic form. An

electronic agreement can be drafted in the similar manner in which a normal hard copy agreement is
drafted. For example, an agreement is drafted on your computer and was sent to a business
associate via e-mail. The business associate, in turn, e-mails it back to you with an electronic
signature indicating acceptance. An e-contract can also be in the form of a "Click to Agree" contract,
commonly used with downloaded software: The user clicks an "I Agree" button on a page containing
the terms of the software license before the transaction can be completed. Since a traditional ink
signature isn't possible on an electronic contract, people use several different ways to indicate their
electronic signatures, like typing the signer's name into the signature area, pasting in a scanned
version of the signer's signature or clicking an "I Accept" button and many more.

E-Contracts can be categorized into two types i.e. web-wrap agreements and shrink-wrap
agreements. A person witnesses these e-contracts everyday but is unaware of the legal intricacies
connected to it. Web-wrap agreements are basically web based agreements which requires assent of
the party by way of clicking the I agree or I accept button e.g. E-bay user agreement, Citibank
terms and conditions, etc. Whereas Shrink-wrap agreements are those which are accepted by a user
when a software is installed from a CD-ROM e.g. Nokia pc-suite software.

Evidentiary Value Under Indian Evidence Act

It is pertinent to contextualize at this juncture that evidence recorded or stored by availing the
electronic gadgets is given the evidentiary status. For instance: the voice recorded with the help of a
tape recorder. Now -a-days, the digital voice recorder, digital cameras, digital video cameras, video
conferencing are adding a new dimension to the evidentiary regime. Justice Gururajan, the Karnataka
High Court judge has held in a civil suit that video conferencing evidence is valid .The emergence of
information and communication witnessed sea change by elevating the status of the evidence
recorded, generated or stored electronically from the secondary to primary evidential status. The shift
in the paradigm owes to the efforts of the working group of the UNCITRAL Model law on electronic
commerce and assigning of the legal recognition to e-record or data message.

The evidentiary value of e-contracts can be well understood in the light of the following sections of
Indian Evidence Act. Sections 85A, 85B, 88A, 90A and 85C deals with the presumptions as to
electronic records whereas Section 65B relates to the admissibility of electronic record.

The above mentioned sections can be explained as follows:

Section 85a:
As regards presumption to electronic agreements, this section is incorporated. It says that every
electronic record of the nature of an agreement is concluded as soon as a digital signature is affixed
to the record. Section 85A has been added in order to ensure the validity of e-contracts. But there are
some restrictions as regards the presumptive value. The presumption is only valid to electronic
records, electronic records that are five years old and electronic messages that fall within the ambit of
Section 85B, Section 88A and Section 90A of Indian Evidence Act.

Section 85b:
Section 85B provides that the court shall presume the fact that the record in question has not been
put to any kind of alteration, in case contrary has not been proved. The secure status of the record
may be demanded till a specific time. The digital signature should also be presumed to have been
affixed with an intention of signing and approving the electronic record. Further it has been provided
that the section should not be misread so as to create any presumption relating to the integrity or
authenticity of the electronic record or digital signature in question.

Section 88a:
The court may presume that an electronic message forwarded by the originator through an electronic
mail server to the addressee to whom the message purports to be addressed corresponds with the
message as fed into his computer for transmission, but the court shall not make any presumption as
to the person by whom such message was sent.

This section is self-explanatory as it purports to follow the basic rules of a valid hard-copy agreement.
The words may presume authorize the court to use its discretionary power as regards presumption.
Sections 85A and 85B contained the words shall presume which expressly excluded this
discretionary power of the court.

Section 90a:
In case of an electronic record being five years old, if proved to be in proper custody, the court may
presume that the digital signature was affixed so as to authenticate the validity of that agreement. The
digital signature can also be affixed by any person authorized to do so. For the purpose of this
section, electronic records are said to be in proper custody if they are in the custody of the person
with whom they naturally be. An exception can be effected in case circumstances of a particular case
render its origin probable.

Section 85c:
As far as a digital signature certificate is concerned, the court shall presume that the information listed
in the certificate is true and correct. Inclusion of the words shall presume again relates to the
expressed exclusion of the discretionary power of the court.

Section 65b:
Section 65B talks about admissibility of electronic records. It says that any information contained in an
electronic record which is printed on a paper or stored/recorded/copied on optical/magnetic media
produced by a computer shall be deemed to be a document and is admissible as evidence in any
proceeding without further proof of the original, in case the following conditions are satisfied:
The computer output was produced during the period over which the computer was used regularly to
store or process information by a person having lawful control over the use of the computer. In case a
combination of computers, different computers or different combinations of computers are used over
that period, all the computers used are deemed to be one single computer.

The information contained should have been regularly fed into the computer, during that period, in the
ordinary course of activities.
The computer was operating properly during that period and if not, it would not have affected the
accuracy of data entered.
A certificate issued is also admissible if it contains a statement which:
Identifies the electronic record containing the statement.
Gives information about the particulars of the computer involved in the production of record.

The certificate issued should be signed by a person officially responsible for the use of that device in
relation to the relevant activity. The information fed into the computer should be in appropriate form as
well as by appropriate device.

Conclusion
To end with, it can be said that electronic contracts are almost same as other hard copy contracts as
far as its evidentiary value is concerned and in case of any discrepancy there are certain prerequisites
that fill the lacunae. All electronic contracts are valid contracts as they are legalized by the Information
Technology Act and one could be made liable if there is any infringement with the terms and
conditions. Subsequently many amendments have been made in order to attain conceptual clarity.
INTRODUCTIONIn recent times, the conventionally functioned models of business have become
out-of-date and in many cases are not execution enough income to the owners or shareholders
of the company. A usual example of such a situation in the business of newspaper in the United
State of America wherein many of the noticeable newspaper have shut down or have lifted purely
to the online medium.[1] New and inventive models and type of business need to be invented
and worked. Existence of e-contract in the market is accomplishing the need for innovativeness
in the traditional business segments. Businesses, both existing and new are trying to create an
online individuality and an e-contract stand keeping in view the needs of the modern times.[2]E-
contract is one of the divisions of e-business.[3] It holds a similar meaning of traditional business
wherein goods and services are switched for a particular amount of consideration. The only extra
element it has is that the contract here takes place through a digital mode of communication like
the internet. It provides an opportunity for the sellers to reach the end of consumer directly
without the involvement of the middlemen.[4]New models of business demands different
organisational charters. E-contract demands an organizational charter which caters to its new
marketing needs. This mode of business enables businesses to save time on product design and
device products according to the individual customer requirement, track sales and get immediate
feedback from the customer.Contracts have become so common in day-to-day life that most of
the time we do not even recognize that we have entered into one. Right from buying a vegetable
and hiring a Cab or to buying an airline ticket online, uncountable thing in our daily exists is
governed by contracts.The Indian Contract Act, 1872 rules the way in which contracts are made
and completed in India. It rules the way in which the requirements in a contract are implemented
and codifies the effect of a breach of contractual provisions.Electronic contracts (contracts that
are not paper based but relatively in (electronic form) are born out of the need for speed, ease
and efficiency. Imagine a contract that an Indian manufacturer and an American exporter wish to
enter into. One selection would be that one party first draws up two copies of the contract, signs
them and couriers them to the further, who in turn signs both copies and guides one copy back.
The other option is that the two parties meet someplace and sign the contract. In the electronic
age, the whole contract can be accomplished in seconds, with both parties simply fixing their
digital signatures to an electronic copy of the contract. There is no need for behind couriers and
additional travelling costs in such a situation.There was primarily a fear between the legislatures
to identify this modern technology, but now many countries have legislated laws to recognize
electronic contracts. The conventional law involving to contracts is not satisfactory to address all
the issues that arise in electronic contracts. The Information Technology Act describes some of
the irregular issues that arise in the formation and verification of electronic contracts. WHAT IS
ELECTRONIC CONTRACT?Contracts have become so common in daily life that most of the
time we do not even recognize that we have entered into one. Right from hiring a taxi to buying
airline tickets online, countless things in our daily lives are ruled by contracts.The Indian Contract
Act, 1872 governs the manner in which contracts are made and performed in India. It governs
the way in which the requirements in a contract are implemented and codifies the effect of a
breach of vowed provisions.Within the outline of the Act, parties are free to contract on any terms
they choose. Indian Contract Act comprehends of limiting factors subject to which contract may
be entered into, executed and breach enforced. It only provides an outline of rules and
regulations which govern creation and performance of contract. The rights and duties of parties
and terms of agreement are definite by the contracting parties themselves. The court of law acts
to enforce agreement, in case of default.Electronic contracts (contracts that are not paper based
but rather in electronic practise) are born out of the need for speed, suitability and efficiency.
Imagine a contract that an Indian exporter and an American importer wish to enter into. One
option would be that one party first pulls up two copies of the contract, signs them and couriers
them to the other, who in turn signs both copies and couriers one copy back. The other option is
that the two parties meet someplace and sign the contract.In the electronic age, the whole
contract can be completed in seconds, with both parties simply attaching their digital signatures
to an electronic copy of the contract. There is no need for delayed couriers and additional
travelling costs in such a situation. There was initially a hesitation amongst the legislatures to
recognize this modern technology, but now many countries have passed laws to recognize
electronic contracts. Essentials of an electronic contract:As in every other contract, an electronic
contract also requires the following necessary requirements:1. An offer requirements to be
madeIn many contacts (whether online or conventional) the offer is not made directly one-on-
one. The consumer browses the available goods and services showed on the sellers website
and then chooses what he would like to purchase. The offer is not made by website showing the
items for sale at a particular price. This is essentially an invitation to offer and hence is revocable
at any time up to the time of acceptance. The offer is made by the customer on introduction the
products in the virtual basket or shopping cart for payment.2. The offer needs to be
acknowledgedAs stated earlier, the acceptance is usually assumed by the business after the
offer has been made by the consumer in relation with the invitation to offer. An offer is revocable
at any time until the acceptance is made.Processes available for forming electronic contracts
include:I. E-mail: Offers and acceptances can be exchanged entirely by e-mail, or can be
collective with paper documents, faxes, telephonic discussions etc.II. Web Site Forms: The seller
can offer goods or services (e.g. air tickets, software etc.) through his website. The customer
places an order by completing and communicating the order form provided on the website. The
goods may be actually delivered later (e.g. in case of clothes, music CDs etc.) or be directly
delivered electronically (e.g. e-tickets, software, mp3 etc.).III. Online Agreements: Users may
need to take an online agreement in order to be able to avail of the services e.g. clicking on I
accept while connecting software or clicking on I agree while signing up for an email account.3.
There has to be legal considerationAny contract to be enforceable by law must have legal
consideration, i.e., when both parties give and receive something in return. Therefore, if an
auction site eases a contract between two parties where one Ecommerce Legal Issues such as
a person provides a pornographic movie as consideration for purchasing an mp3 player, then
such a contract is void.4. There has to be an intention to create lawful relationsIf there is no
intention on the part of the parties to create lawful relationships, then no contract is possible
between them. Usually, agreements of a domestic or social nature are not contracts and
therefore are not enforceable, e.g., a website providing general health related data and
instructions.5. The parties must be able to contract.Contracts by minors, lunatics etc. are void. All
the parties to the contract must be lawfully competent to enter into the contract.6. There must be
free and unaffected consentConsent is said to be free when there is absence of coercion,
misrepresentation, undue influence or fraud. In other words, there must not be any agitation of
the will of any party to the contract to enter such contract. Usually, in online contracts, especially
when there is no active real-time communication between the contracting parties, e.g., between a
website and the customer who buys through such a site, the click through process ensures free
and genuine consent.7. The object of the contract need to be lawfulA valid contract presumes a
lawful object. Thus a contract for selling narcotic drugs or pornography online is void.8. There
must be conviction and possibility of performanceA contract, to be enforceable, must not be
ambiguous or unclear and there must be possibility of performance. A contract, which is
impossible to perform, cannot be enforced, e.g., where a website promises to sell land on the
moon.TYPES OF ELECTRONIC CONTRACTSEmployment ContractsThe Information
Technology is determined by manpower in Indian context and thus employment contracts are
vital. With a high erosion rate as well as the confidentiality involved in the work employment
contracts become crucial. Apart from that Indian Labour practices are based on tough labour
laws and not the hire and fire processes of the first world. In this background copyright issues of
software development assumes vital importance. Apart from that contracts for on-site
development and sending the workforce abroad and security clauses will play a crucial role in
employment contracts. Firms hiring personnel abroad apart from their personnel need to include
the relevant employment contract of the place of action.Consultant AgreementsThe normal
requirements of Indian Contracts Act of 1872 will apply on any consultant agreement. But
particularly in Information Technology industry where the infrastructure to function is low and
connectivity is very high consultancy with experience marketing and business development and
technology development is a very dominant mode of contract. Here proper care to be taken in
Consultant agreements where issues of Intellectual Property Rights, privacy will play an
important role. If care is not taken it may lead to cost of business and loss of clients.Contractor
AgreementsAs manufacturing companies subcontract their business, Information Technology
also subcontract their work due to changing orders and would like to cut on the cost of regular
workforce and attendant legal and financial problems. At the same time in manufacturing
business, tough labour laws like the Contract Labour (Abolition and Regulation) Act of 1970 in
force could lead to a different type of legal twist. However if care is taken to subcontract keeping
the requirements of the contract Act and the Contract Labour abolition act the anticipated
objectives could be met. Here again privacy, consumer liability and copy right issues assume
great importance and care to be taken in representation such contracts.Sales, Re-Seller and
Distributor AgreementsIn software and Internet dealings though the order of middle men are
done away with, it still requires a circulation network and hence prescribed issues come into play
in that feature of business. In first place one needs to see whether software is a good in the Sale
of Goods Act.Software is a programme of instructions, which operate the system or hardware to
function in a planned manner. Hence there arises an effort to classify and define in legal terms of
the vague nature of software in comparison with other products. The code and its source can be
understood as information planned in a way to operate the system leading to the conclusion it is
not a property and not a good in the legal intellect. In Aerodynamics Systems Product v. General
Automation limited, the argument upraised by the defendants that though software can be a
subject matter of sale, software themself is pure information, and the transmission of software is
a service and not sale of goods. There is another explanation of Software to be considered as
Goods where it is likened to that of a book containing information, which is considered as goods
under the Sale of Goods Act. As the value of the book is not the mere value of the inlet jacket,
paper and materials used in its creation, but one that of the value of the information limited in it,
software is also a product a floppy, or a CD-ROM or simply stored in hard disc but the value is
much higher than the simple storage device.Hence software due its high value in terms of
application is measured as goods for the purpose of legal classification. Having recognised it as
good the distribution, reseller agreement should take care of the aspect of Monopoly Restrictive
Trade Practices (in future the competition law) provincial authority and other tax
instruments.Non-Disclosure AgreementsNon-Disclosure Agreements are part of IT contracts,
which identify binding agreements with employees apart from the standard confidentiality
agreements. The Indian Contract Act 1872 has provisions for the same and it undertakes
importance in an industry which is purely knowledge based and one which can be easily
repeated ruining the business.Software Development and Licensing AgreementsA license is an
authorisation given to do a specific manufacture/sales/marketing/distribution, which is legitimate.
License plays a prevailing form of contract in mass marketing activity of any kind including
Information Technology. Software licensing has a historical background where originally it was
pushed with the hardware and was given free and its use and application was limited to that of
operating the system and few other features. Later in late 60s and early 70s hardware makers in
Europe marketed software distinctly. Later software makers resorted to license their products
distinctly from that of the hardware. In normal ownership, the product sold becomes the exclusive
property of the buyer who can do whatsoever he wants. In case of software, the product can be
copied easily and will adversely affect the manufacturer of his sale and thus the entire
investment-return processes and future spur to invest in making software. Thus software
business became a business of license command. These licenses are issued in persistence or
for a limited period. Licensing agreement normally forbids reverse-engineering, de-compiling or
any other manipulation of the software, which can be marketed easily with some alterations.
Licenses are issued for a single machine practise at a specified location with a provision for
backup in the same machine in case of a crash or unreliable functioning. Multiple machine
licenses are also given. The license agreement also protects the user from any copyright or other
intellectual property violation of the manufacturer. The licensing agreements become vital in
Cyber Contracts. Similarly software development is another agreement between joint ventures of
companies or for awarding development of software to multiple parties, which assume vital
importance in contracts of cyber world.Shrink Wrap ContractsA Shrink Wrap contract is the
former license agreement required upon the buyer when he buys software. Before he or she
tears the pack to use it, he or she is made mindful by tearing the cover or the wrap that they are
sure by the license agreement of the manufacture. This is done as previous deliberated to
protect the interests of the manufacturer where the consumer cannot replicate the package, copy
it or sell it or donate it to others moving the sale of the software. The license, which is contracted
and enfolded in the product, which becomes enforceable and taken as consent before the buyer
tears the package. The usual sections that are part of the shrink-wrap license are that ofa)
prohibiting illegal creation of copiesb) prohibiting payments of the softwarec) prohibition of
contrary engineering, de-compilation or adjustmentd) prohibition of usage in more than one
computer definite for that purposee) disclaimer of contracts in respect of the product soldf)
limitations of responsibilityThe reason and business sense is that to guard the manufacturer of
the package, as it is easy to copy, operates and duplicate under other brand name. Critiques
contend that shrink-wrap license agreement is in contradiction of the basic principle of contract of
offer, consideration and acceptance as the licensee is unsettled. Several cases to this effect
have been dispensed in US courts.Source Code Escrow AgreementsIn software development
many principal firms who participate in development are keen to guard the source code of the
software, which is the most appreciated and cautious part of the computer programme. Copyright
owners of such source code may have to disclose this to countless developers who will be
developing definite software based on the source code. In these conditions, the copyright owner
will credit the source code to specified source code escrow agents who will release the code on
the development of the product upon agreed terms. In cyber contracts, such agreements and
also the terms and conditions to contract with the escrow agents becomes vital.LEGAL
FRAMEWORK RELATING TO E-CONTRACT With the growing importance and value of e-
contract in India and across the world, the different stakeholders are continuously identifying and
evaluating the nuances of legal outline relating to it. The participation of different service
providers in the transaction of e-contract, which includes a payment gateway, the main website,
the bank or card verification website, the security authorisation website and the final service
provider which can also comprise the shipping agent has made the E-contract business more
complex. Therefore, the need for amendable it has augmented. In India, till date there are no
definite legislations or guidelines protecting the buyers and sellers of goods and services over
the electronic medium.[5] However, several laws acting in unification are trying to regulate the
business transactions of E-contract. They are as follows:Indian Contract Act,1872Consumer
Protection Act,1986Information Technology Act,2000Indian Copyright Act,1957Like any other
types of business, E-contract business also works on the basis of contracts. It is therefore,
structured by the Indian Contract Act, 1872. Any valid and legal E-contracts can be designed,
completed, and enforced as parties replace paper documents with electronic parallels.[6] The
contracts are move in between the service providers or sellers and buyers.Earlier, there was no
definite law to regulate the intermediaries such as verification service providers and shipping
service providers to safeguard that the product or service is actually delivered. However, the
government has recently acquainted the Information Technology (Intermediaries Guidelines)
Rules 2011.[7] The actual scope of the security provided under these regulations would only be
known after judicial interpretation of the provisions. However, now it has been explained that
even foreign intermediaries delivered to provide service can be sued in India.[8]The payment
gateways which footing a very important position as the primary processor of the payment for the
merchants were brought into the legal framework after proclamation of the Payment and
settlement Systems Act, 2007 (PSS Act, 2007). The PSS Act, 2007 as well as the Payment and
Settlement System Regulations, 2008 made under the Act came into effect from August 12,
2008.[9] Further, the Reserve Bank of India, issued additional guidelines initiating all such
gateways and payments processors to register under the said act.The authority of the
transactions of E-contract is established under the Information Technology Act, 2000 (IT Act,
2000). It explains the reasonable mode of acceptance of the offer. IT Act, 2000 also rules the
revocation of offer and acceptance.[10] However, definite provisions that regulate E-contract
transactions conducted over the internet, mobile phones, etc. are vague. With numerous cross
border transactions also being conducted over the internet, specific law guarding the Indian
customers and Indian businesses are essential and Indian laws are gravely insufficient on this
issue.In a bid to safeguard security, the government has made digital signatures necessary in
several E-contract transactions mainly in the government to government (G2G) or government to
business (G2B) framework with a view to safeguarding the identity of the transacting parties. E-
contracts transactions on these modes require digital signatures as essential parts. They are
used for the verification of the electronic contracts. These are controlled by the IT Act, 2000
which provides the outline for digital signatures, their issues and verification. The Act thus tries to
safeguard that trust between both the parties is maintained through verification of identities and
help prevent cybercrimes and ensure cyber security practices.[11]In the light of the above
discussion, it is to be said that the present laws in respect of the guidelines of E-contract and its
related operations are not suitable serving the purpose. Propagation of laws is creating a
confusion in the smooth procedures of the E-contract accomplishments. Further, the present
laws are salient on features of e-contract such as payment instrument and delivery instrument
and present standard practises which have been settled by the industry. The Reserve Bank of
India, however, has tried to support the electronic payment mechanism through various orders,
but such orders can only act as a stop-gap procedure.[12] The most important order in this
regard was the application of second factor verification in all Indian Payment Gateways.
Commonly recognised as Verified by Visa or MasterCard Secure Code, this had made card
transactions on the internet moderately more secure. POSITION OF E-CONTRACT IN
INDIAIndian Railway Catering and Tourism Corporation LimitedIndian Railway Catering and
Tourism Corporation Limited (IRCTC) is certainly the major e-commerce site in India and in
Indias answer to private capitalist ventures.[13] IRCTC was set up as a subsidiary of the Indian
railways for the exclusive purpose of providing catering services and ticketing services for the
Indian Railways. However, of late, it has extended its wing and now covers sectors such as
flights and hotel bookings. The flagship was established in 2002 and has transformed the online
travel booking business in India. IRCTC functions both in the business to business and business
to consumer segment. According to the data released by IRCTC, it has more than 4-4.5 lakh
reservations per day. In 2010-11, IRCTC sold tickets value more than Rs. 8000 Crore. It claims to
switch more than 8 lakh equivalent transactions thereby speaking volumes about the prominence
and the size of their business.[14]The site offers the only link for purchasing Indian railway tickets
online and even agent sites (B2B) have to link them to IRCTC to provide online booking services
for customers. IRCTC offers a large option for consumers for payment of buying tickets online.
IRCTC however, is one of the few enduring e-commerce sites which charged transactions
charges from customers, which is different bank to bank.Through IRCTS several customer enter
daily into a new dimension of contract i.e. E-contract. E-contract now plays an important role both
for the customer and the seller. Customer has a lot of choice to choose a product and seller
through e-contract reach to large customers.Inferences that can be drawn from the above Case
Studies:The main issues that have been identified from the case studies can be stated as
follows:a) Lack of guideline regarding payment mechanismsThere is an outright lack of
regulations regarding the mode of payments which needs to be provided by any e-commerce
website and the transactions charges which they can levy. It is seen that numerous travels
website levy additional charges on the payment made by the customers. The websites state that
it is an industry customary practise. This makes the matter even more complex owing to issues
of anti-competitive practises.Further, there is no standard Reserve Bank of India rules available
especially for the issues of refund transactions in the case of credit card and debit card
payments. The regular guidelines available for point of sale (PoS) dealings may not apply to all
e-contract transactions due to the envelopment of multiple parties in these cases instead of two
parties in a normal PoS transaction.b) Need for criteria for Consumers Grievance
RedressalThere should be standards recommended by law regarding the customer service
requirements to be fulfilled by an e-contract undertaking. Providing a necessary physical office
and mandatory 24 hour call centre are some of the steps which should be commenced. Further,
the consumer courts should be made conscious the issue of e-contract transactions and the
special steps to be shadowed in such cases. Timelines should be set for returning the amount
back to the customers account in case of failed transactions or order cancellations. These
procedures should be applicable to the e-commerce merchants as well as the banks and
payment entries.INTERNATIONAL SCENARIO IN RESPECT TO E-CONTRACTNew
intimidations to consumer protection call for new protecting rules and measures. We should
distinguish the fact that better consumer protection in online environments shall have an
optimistic impact on the further development of electronic commerce and thereby on merchants.
Generally speaking, if electronic commerce is to increase, consumers must be provided with at
least the same guarantees they would be provided with in the older marketplace.The US and the
EU have affirmed the importance of protecting a new type of consumers. With the rise of
electronic commerce, the role of consumers has changed affectedly. While consumers were
formerly a quiet body, today they have power in businesses. Sellers are now in a comparatively
submissive position. Their job is too merely to paste that product information it becomes the
accountability of consumers to evaluate and make active decisions upon.Where the precise field
of argument firmness is concerned, both the US and the EU realize the best way to safeguard
consumers could be to provide them with suitable measures for recompense. Consumer
protection groups have created mediums where consumers can both acquiesce e-mail based
complaints when discontented with advertisements, goods or services, and allege violators of
self-regulatory codes of beliefs.While consumer protection can take on diverse forms, dispute
resolve mechanisms are its final insurance. Principles for dispute management are finally more
attractive to devices than less formal intended arrangements since they can encourage more
reliable conduct of consumer benefits. In light of government practise, protection accessible by
state power is important. Some consumers even seek reserve in the court. In order to quarter the
special character of modern business without drifting too far from tradition, ADR mechanisms for
dispute firmness very cleverly entail state application support. Procedure for consumer protection
in electronic commerce dispute firmness must extend outside national limits. Individual states
privation the ability and initiative to adequately address issues related to consumer protection in
the background of electronic market. Many of the issues that arise from cross border disputes
are impaired by the fact that misleading marketing practice laws vary from one jurisdiction to
alternative. Possible standard electronic consumer policies should be pertinent to cross-border
dealings to which all or most countries can subscribe.OECD Member States have acknowledged
the necessity of an international synchronized approach to deal with the issue of dispute firmness
in electronic business. In one imperative document framed by the OECD, Procedures for
Consumer Protection in the Context of Electronic Commerce, procedures for consumer
protection in dispute firmness and amends aim to safeguard consumers contributing in electronic
business without founding barriers to trade.The rules serve as a reference to governments,
businesses, consumers, and their councils of the characteristics of active consumer protection
for electronic business. The rationale behind them is alike to that of the US and EU. Firstly,
applicable law and jurisdiction are singled out for likely amendment.No broad creation of the new
applicable law or principle of jurisdiction is pointed out, but the rules do define features of suitable
modifications. Equality, they suggest, is one of the most important features in understanding
consumer safety. The purpose of the fairness is to offer consumers a level of protection not less
than that afforded in other forms of commerce and to provide consumers with eloquent contact to
fair and timely dispute resolution and redress without undue cost or burden. To complete
fairness, one must provide a framework for correcting unfairness.As said in the guidelines,
businesses, consumer councils, and governments should work collected to endure to use and
develop fair, effective, and clear self-regulatory and other measures, which provide consumers
with the choice of mechanisms to firmness their disputes ascending out of consumer dealings.
Moreover, these efforts should be followed at an international level. To attain the maximum
reimbursements of the new arrangements, modern technology should be used to improve
consumer awareness and freedom of choice. From the breakdown above, we can determine that
the international community has touched a harmony on the general approach toward consumer
protection. While making developments on court procedures and the application of principles,
new means should be found out to quarter the new needs of electronic business. The means
should permit the expansion of new shops effective in a responsible manner and resolving
disputes accessibly online and, along with them, greater choices and more antagonism. With
new services in place, consumers shall positively be protected from excessive costs of defiance
with duplicative or varying guidelines.CONCLUSIONSE-contract in India has definitely came a
long way from the days of bazee.com which underway as the first large online retail website. At
present, with the increase in number of internet user, e-contract is organised to grow further. The
growing trend of internet banking and credit or debit cards along with the rise in the number of
educated and computer literate persons will further support this growth. The need of the hour is
law which covers all the aspects of e-contract extending from payment mechanism and
maintaining minimum standards in the delivery of services. Such a legislation will help to restraint
the growth of websites which rise within a few days and then stop functioning in the absence of
suitable funds for sustenance. As all business through e-contract sites is ended through the
internet without any direct physical interfaces, the main basis connections is the trust of the
customers which should be engaged at any cost. A law in this field will detect the criminals who
have used the internet as a source for making quick money. This will also act a defence for the
genuine e-contract websites and help in further growing of business. There is also a need for the
creation of an authority in the consumer court to look into the grievances arising out of e-contract
transactions. Such an authority should have experts in area such as payment security. This will
embolden speedy redressal of disputes and promote e-contract transactions. E-contract which is
a developing segment in the commercial arenas scheduled to grow and it is the accountability of
the prevailing players to ensure that growth is not hindered by their acts and
policies.REFERENCES Books referred: - See more at: http://taxguru.in/corporate-law/all-about-
e-contracts-meaning-types-and-law.html#sthash.05cJ9SMD.dpuf