BUSINESS TRANSACTION

& CYBER LAW

 IT ACT 2000
• To promote harmony & unification of law of international trade
General assembly of UNO in Dec 1996 created United nation
commission on international trade law ( UNCITRAL)
• In tune to this law IT ACT 2000 was enunciated in India
• It includes J & K also
• OBJECTS ( Q 122 )
– Provides legal recognition to Electronic date interchange
( E-commerce)
– Facilitate electronic filing of documents
– Brings amendments to existing laws like Negotiable
Instrument Act & RBI Act
– To maintain harmony with UNCITRAL
 IT ACT EXCLUDES

• Negotiable instruments except cheques

• Power of attorney

• Trust

• Will

• Contract of immovable properties

ACCEPTANCE OF VALID OFFER( Q 121 & 126)
• Section 4 of Indian Contract Act - acceptance of valid
offer results in valid contract

• Valid acceptance - when acceptance is put in course of

transmission so as to be out of the power of the acceptor

• SC in Bhagwandas Girdharilal held that section 4 is

applicable to only non - instantaneous forms of
communication

• In instantaneous forms of communication acceptance is

complete when acceptance is received by Offeror
 ACCEPTANCE OF VALID OFFER (Q 123)

• In E commerce acceptance is made via E-mail or ‘accept’

or ‘buy’ buttons (web click contracts)

• Sender receives acknowledgement but does not know

whether Offeror has received the acceptance

• So here the contract is completed when the Offeror

receives the acceptance (addressee receives the electronic
record)
 VALIDITY OF ONLINE CONTRACTS

• Lawful consideration
• Competent parties
• Lawful object
• Free consent

• May be done by word of mouth or in writing or by conduct

• No requirement of writing except for cases specifically

mentioned in law
 TIME & FORMATION OF CONTRACT (Q 123)
• Dispatch – when it enters the computer resource outside
the control of the originator
• Time of receipt of electronic record
– When addressee has designated computer resource
• When acceptance sent to designated computer
resource
– when record enter designated computer resource
• When acceptance is sent to some other computer
resource
– When electronic record is retrieved by addressee
• when addressee has no designated computer
resource
– When electronic record enters the computer
resource of addressee
 CLICK WRAP AGREEMENT ( Q 122 )

• Also called as Web wrap agreements

• Commonly used in E commerce transactions
• Used to specify terms & conditions of agreement
• Buyer or user clicks “I agree or I accept”
• Buyer or user is now bound to conditions
• It has to be made sure that the person has legal competence &
capacity to enter into agreement
• SHRINK WRAP agreement are entered based on the licensee
opening of software product to return it back within prescribed
time
 ELECTRONIC RECORDS & DIGITAL
SIGNATURES
• Electronic record is record which is communicated &
maintained by means of a electronic equipment
• Digital signature is evolved in two steps
– Electronic record is converted into message digest by
Hash function
– Identity of person affixing signature through use of
private key which attaches itself to message digest
• This can be verified by person who has public key
corresponding to such private key
• MTNL & TCS are companies providing digital signature
in USB tokens
 AMENDMENTS IN OTHER ACTS
• Cheques now include ECS/MICR & use of digital sign in
Negotiable Instrument Act
– However bills of exchange cannot be made by
Electronic means

• Regulation of funds by RTGS between Banks in RBI Act

• Floppy, disc, tape, print outs & other data storage

devices in Bankers Books Evidence Act
 OFFENCES & PENALTIES ( Q 124 & 125 )
• Damaging computer/data/system 1 Crore
or network
• Non compliance of reporting 1.5 lakhs
documents/ returns
• Maintaining books of A/c 10,000 per day
• Tampering concealing with computer 2 lakhs / 3 years
• Hacking ----do -------
• Transmit obscene material 1-2lakh / 5-10 years
• Misrepresentation to controller/ 1 lakh / 2 years
false digital signature / breach of
confidentiality / misuse digital signatures