1.

INTRODUCTION

The latest mode of making instant contracts is to enter into contracts

through computer internet. Though the computer internet, which is the most
revolutionary mode of the communication system, it is possible to send
messages across the world from one part of the globe to another part of the
globe. These messages through e-mail reach from the sender to the
addressee instantly. Every thousand of millions of messages pass on across
the world between the persons of the same country. The internet connects
countless networks throughout the world, which include corporate
networks, universities, international business house and other individuals.
Now the internet software system has proved to be a big plus point for
entering into several contracts within the country and outside the country.
By exchange of communication of offer and acceptance between the parties,
it is very much feasible to enter into contracts instantaneously these offers
and acceptance between the parties may be exchanged by means of the
electronic record. The legality and enforceability of the E-contract is no
way affected merely because the formation of the contract depends on the
electronic record that being resorted.1

1
The Law of Contracts & Tenders with a Special Chapter on E-Contracts, T.S. VenatesaIyer’s&, ed.10th,
S. Gogia& Company, at p.106.
2. E-CONTRACT IN INDIA

Electronic contracts mean the contracts which are formed between two parties through
negotiations, by the use of any electronic means. They are also popularly called as cyber
contracts, digital contracts or online contracts. In concept, they are very similar to
traditional contracts, which are paper based and wherein goods and services are
exchanged for a specific amount of consideration. The only extra element they have is
that the mode of contract is digital in nature like the internet/other e- instruments..

According to Sir William Anson: A contract is a legally binding agreement between two
or more persons by which rights are acquired by one or more acts or forbearance on the
part of the other or others. 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.2

The principles governing the traditional contracts also apply to the e-contracts. This is
also known as electronic contract. E-Contract is an aid to drafting and negotiating
successful contracts for consumer in business ecommerce and related services. It is
designed in a way 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.3

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E-Contracts are contracts attracting principles of Uberrimaefidei in which the
contracting parties are not dealing at arm's length but 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. The doctrine of Uberrimaefidei should be
considered the foundation of e-contracts as the chances of misrepresentation or
suppression of material facts is most likely to occur in such transactions

E-contracts are standard forms of contracts. Instead of using a printed paper they are
entered into a by electronic mode. A standard form of contract is a contract prepared by
one party to it, otherwise, than by a process of negotiation drafted by one party it enables
the other party, to sign on dotted lines. The terms are prepared beforehand by the former
and the latter party is made to or deemed to agree to the terms where under the latter
does not have much say. The terms are put is a standardized form.
3. ESSENTIALS OF E CONTRACT

As in every other contract, an electronic contract also requires the following necessary
requirements:

1. An offer requirements to be made

In 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 seller’s
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 acknowledged

As 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 consideration

Any 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 relations

If 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 etc. are void. The contracting parties must be lawfully competent to
enter into the contract. Both natural and legal persons are capable of entering into a
contract. Computers are not capable of becoming a party to the contracts. Both the buyer
and the seller should be natural persons so, they are capable enough of being parties to
the contract.

6. There must be free and unaffected consent

Consent 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 lawful

A valid contract expects a lawful object. So, a contract for selling pornography or
narcotic drugs is void. It is important to keep a record of the agreed contract. This may
not be easy if there have been several email exchanges to add or exclude a part of the
terms of the contract. It can also include negotiations and counteroffers between the
contracting parties. So, it may be difficult in such a situation to determine who is the
offeror and who has accepted the final offer. This makes difficult to define which party’s
terms and conditions is to be applied. Hence, it is important to ensure that the parties are
clear on the content of the final contractual terms.

8. There must be conviction and possibility of performance

A 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.
5. TYPES OF E CONTRACT

There are two ways through which commercial contracts can be entered
electronically. A common and popular method is through the exchange of
electronic mail e-mail. The other method of contracting is using the World Wide
Web or website.

2.3.1.1.E-MAIL CONTRACT

A contract can be entered into and concluded following the exchange of a

number of e-mails between the parties. Here the e-mails serve the same
purpose as normal letters, do had a contract been negotiated through letters
written by both parties. The fact that a contract has been negotiated
electronically will not raise any specific legal or contractual consideration
sui generis to the type although there may be evidential considerations
raised dependant on the existing legislation and if there are any formal
requirements for a written signed contract.

2.3.1.2.CONTRACT THROUGH WEBSITES

Normally, a vendor would provide a display of products on his website and

indicates cost of such product. A customer can scroll through the website
previewing the items or products on offer, click on the item for further
information and if interested in the purchase, can place an order by
filling in an order form and clicking ‗Submit‘ or I Agree‘ or I Accept‘ or
something similar button. Shrink wrap,click wrap and browse wrap are common
types of agreements used in electronic commerce.

Further the website based is divided into following kinds:

1. A click wrap agreement is mostly found as part of the installation process of software
packages. It is also called a ‘click through’ agreement or click wrap license. The name
click wrap‘ comes from the use of ‗shrink wrap contracts‘ in boxed software
purchases. In a Click Wrap Agreement, the party after going through the terms and
conditions provided in the website or programme has to typically indicate his assent
by clicking ―I Agree/I Accept‖ icon or decline the same by clicking the icon ―I
disagree‖. These types of contracts are extensively used on internet for granting
permission to access the site or downloading the software or selling some product.
Click-wrap agreements can be of the following types:

i. Type and Click where the user must type I accept‘ or other specified words in
an on-screen box and then click a Submit‘ or similar button. This displays
acceptance of the terms of the contract. A user cannot proceed to download or
view the target information without following these steps.

ii. Icon Clicking where the user must click on an ‗OK‘ or ‗I agree‘ button
on a dialog box or pop-up window. A user indicates rejection by clicking Cancel‖
or closing the window.
2. Shrink wrap contracts are license agreements or other terms
and conditions which can only be read and accepted by the
consumer after opening the product. The term describes the
shrink wrap plastic wrapping used to coat software boxes,
though these contracts are not limited to the software industry.

A shrink wrap contract is the prior license agreement enforced

upon the buyer when he buys software. Before he or she tears the
pack to use it, he or she is made aware by tearing the cover or the

wrap that they are bound by the license agreement of the

manufacture. This is done to protect the interests of the
manufacturer where the consumer cannot reproduce the package,
copy it or sell it or donate it to others affecting the sale of the
software.

3. BROWSE WRAP

A browsing wrap agreement can be called an agreement which is to be

binding on two or more parties through the use of the website. In case of an
agreement on browsing, an ordinary user of a given Website is to accept the
terms and conditions of use and other website policies for continuous use.
We usually witness such kinds of online contracts in our daily lives.
Although this online agreement is becoming common in all of our
businesses, there is no precise judicial precedent regarding its validity and
enforceability. Other countries, such as courts in the USA, have dealt with
those online agreements and held that both Shrink-wrap Agreements and
 Click-Wrap Agreements are enforceable as far as the general principles of
the contract are not violated.

6. RECOGNITION OF ECONTRACT AND JUDICIAL PRONOUCEMENTS ON ITS

LEGALITY

Along with traditional agreements the Indian Contract Act, 1872 has also accorded
recognition to oral contracts provided they are made by the free consent of parties competent
to contract, for a lawful consideration and with a lawful object, and are not expressly declared
to be void. Thus, nothing in the Indian Contract Act prohibits the enforceability of electronic
agreements if such agreements possess all the essentials of a valid contract.

Free consent is a quintessential characteristic of a valid contract. Generally there is no scope

for negotiations on E-Contracts and it is usually a ‘take it or leave it’ transaction. Indian
courts have dealt with instances where the terms of contract were negotiated between parties
wherein one party to the contract was in an unfair dominant position and have held unfair
contracts as void.

In the case of LIC India v. Consumer Education and Research Center4 the Supreme Court
held that “In dotted line contracts there would be no occasion for a weaker party to bargain
as to assume to have equal bargaining power. He has either to accept or leave the service or
goods in terms of the dotted line contract. His option would be either to accept the
unreasonable or unfair terms or forgo the service forever.”

The focal point is the bargaining power of the parties, for instance wherein a person accepts
unfair terms of contracts to obtain goods or services or means of livelihood. However, the
courts would not intervene in situations where the parties are at equal or almost equal
bargaining positions. Thus, if a consumer was to take the defense of an E-Contract being
unreasonable and the existence of disparity in the negotiating power of the parties, he shall
also have to prove that the services or goods sought by him under the E-Contract were of
absolute necessity and also that he had no other means for availing the goods or services.

In the case of Trimex International FZE vs Vedanta Aluminum Limited, India5, , it was held
that ‘A contract is said to be concluded when parties agree as to the ‘essential terms’ of the

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contract though minor details can be left over for them to decide later, albeit subject to
satisfaction of other requirements as provided by S.10: without such essential terms being
decided, contract cannot be enforced by law as it is deemed to be incomplete’

7. ADMISSABILTY OF THE E-CONTRACT UNDER INDIAN EVIDENCE ACT, 1872

Section 65B

This section helps us understand the provisions under which an e-contract shall be admissible
as evidence in front of a court in India. It says that any information which is recorded through
an electronic medium and is available as on a printed paper, stored or copied in optical or
magnetic media produced by a computer shall be admissible as an evidence if it satisfies the
conditions provided in this section. The conditions set forth under section 65B of the Indian
Evidence Act, are as follows:

 The computer output i.e. the electronic information produced as evidence should be
from the computer which has been regularly used to process or store such digital
information for any activity and such activities are expected to be performed by a
person who has lawful control over the use of the computer.

 During the concerned period, the relevant information should have been regularly fed
to the computer in the ordinary course of such activities.

 In case the concerned computer was not working properly during the period, it should
be notified that such non-functionality did not in any way affect the electronic record
or the accuracy of its contents.

 The reproduction of such digital information or the derivations associated with the
information should have been fed into the computer during the regular conduct of
associated activities.

The section tells us that any such evidence which is provided to the court in the form of e-
contract shall be accompanied with a certificate. Such a certificate shall be a confirmation by
the person occupying the legally responsible position for processing the information, with

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2010 (1) SCALE 574
regards to fulfilling all the conditions specified under Section 65B of the Indian Evidence
Act, 1872. Such a person shall be the one who is responsible for operating the computer
which processed all the information related to the concerned activity.

Section 85A This section specifically talks about the presumptions of the courts in India with
regards to electronic agreements and says that the courts shall presume that every available
electronic recording which has an electronic signature affixed to it shall be considered to have
a valid evidentiary value under the Indian Evidence Act and in the eyes of the courts in India.

Section 85B

This section tells us that the court shall presume that the e-contract or documents which are
being presented in front of the court have not been tampered with i.e. they are presented in
their original form without anyone making any alterations in it, in case it has been proved that
such records have been tampered with. The secure status of such information shall be
required to be maintained until a specific time. The section also tells us that once a digital
signature is affixed to an agreement available online, such shall be presumed by the courts to
be an acceptance of such agreements.

Section 85C

This section tells us that if a digital signature is affixed to a particular document then the
court shall presume that such document is true and correct.

Section 88A 

The very purpose of this section is to define the terms ‘addressee’ and ‘originator concerning
an e-contract. It mainly talks about the power of the court with regards to presumption of the
addressee of an electronic communication. The section says that the courts shall presume the
‘addressee’ to be a person to such electronic communication has been directed by the
‘originator’. Though, as per this section, the court does not have any power with regards to
the presumption of who the ‘originator’ of the thread of electronic communication is.

Section 90A
This section helps the courts deal with a record which is more than 5 years old. In the eyes of
the court and the Indian Evidence Act, if such a record is in proper custody then the court
shall presume that the digital signature has been affixed with such document to authenticate
its validity.

8. IMPORTANT CASE LAWS

1.State (NCT of Delhi)V. Navjot Sandhu 6

Even if the certificate containing the details mentioned in Section 65B is not provided,
secondary evidence can be given if it complies with the provisions under section 63 and 65 of
the Act.

2. Anvar P.V v. P.K Basheer7:

This case Overrules Navjyot Sandhu. Electronic record by way of secondary evidence shall
not be admitted in evidence unless the requirements under Section 65B are satisfied. Since
65A and 65B are special provisions they will be given precedence over general laws in
Sections 63 and 65 (Generalia specialibus non derogant) • Notwithstanding Sections 59, 65A
and 65B of the Evidence Act, an electronic record used as primary evidence under Section 62
is admissible in evidence, without complying Section 65B of the Evidence Act. (Para 22) •
Makes all of the conditions under Section 65B (4) imperative

3. Sanjaysinh Ramrao ChavanV. Dattatray Gulabrao Phalke &Ors8

Without source there is no authenticity for the translation. Source and authenticity are the two
key factors for electronic evidence.

4. Abdul Rahaman KunjiV. State of West Bengal 9

6
(2005) 11 SCC 600:
7
(2014)10 SCC473
8
. (2015)3SCC 123
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[2016 CLRJ 1159]
High Court of Calcutta while deciding admisisbility of email held that an email downloaded
and printed from email account of the person can be proved by sec. 65B r/w Sec 88A.
Testimony of witness to carry out such procedure to download and print the same is sufficient
to prove communication.

5. Subhendu NathV. State of West Bengal 10

A breach in the chain of custody or improper preservation of such evidence renderS

electronic evidence vitiated unreliable in judicial proceedings. • Necessary certification under
Section 65B of IT Act is also a prerequisite for admissibility of such evidence. Even in case
of certification, reliability of electronic evidence depends on proper collection , preservation
and production in court and any lacuna in that regard would render such evidence vulnerable
with regard to its probative value.

6. More recently in the case of Ambalal Sarabhai Enterprise Limited v. KS Infraspace LLP
Limited11, the Supreme Court examined the validity of agreements entered into by parties
using a combination of communications over email and WhatsApp. The key inference drawn
was the nature and language of the correspondences, which did not directly equate to
affirmation, and therefore the agreement was invalid. The means of communication was not a
concern, however, the Court stated that, “the WhatsApp messages which are virtual verbal
communications are matters of evidence with regard to their meaning and its content (are) to
be proved during trial by evidence-in-chief and cross examination.”…  “The e-mails and
WhatsApp messages will have to be read and understood cumulatively to decipher whether
there was a concluded contract or not. The use of the word ‘final draft’ in the e-mail… cannot
be determinative (of offer or acceptance) by itself”.

10
[MANU/WB/0500/2019; 2019(2) RCR (Criminal) 112]

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(2020) SCC OnLine 1
9. CONCLUSION

The conduct of commercial and social transactions through e-contracts has had a
revolutionary impact on our society. The Indian Evidence Act, 1872 values e-contracts in the
same way as it does for written or verbal contracts. The Indian Evidence Act and its relevant
provisions help us understand the aspects with regards to the admissibility of electronic
contracts in the purview of the India courts.

 Though over the period the Indian Legal Regime has adapted itself to deal with
technological advancements. There is a lot of scope for improvements in the processes of
dealing with e-contracts under Indian law.