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E-Contracts: The change brought or the change needed

 E-Contracts: The change brought or the change needed


We are living in a world where everything is being digitalized. Where most of the agreements and contracts were previously documented on paper, are now preferred to be in digital form now. Moreover, with the advent of covid pandemic, the e-commerce world had no option other than opting e-contracts. But this isn’t a new thing. It was also there before the pandemic. It’s just that with the pandemic, its existence grew a lot.

What is E-Contract?

The “e” used in the term e-contracts refers to “electronic” and “contract”, as defined by Sec. 2(h) of Indian Contract Act, 1852, is an agreement enforceable by law. So, merging both, the contract which is done digitally and the way adopted for the same is electronic, is what we can say e-contracts. It increases the effectiveness of the e-commerce world and is also legal, as it has been legalized by the information Technology Act.

It is a contract which is modeled, executed and enacted with the help of software system. The whole process is done digitally, be it the negotiation art, drafting, or other relevant things. The signatures of the parties are also done digitally here.

It is to be noted that digitalizing the contracts doesn’t bring any change to its essentials, as under law. According to Indian Contract Act, for forming contract; proposal, acceptance, consideration, legal enforceability are essentials. So is the case of e-contracts. The only difference is that everything is done digitally, to the extent possible.

Kinds of E-Contracts

  1. Web-Wrap Agreements

  2. Shrink-Wrap Agreements

Web-wrap agreements are ones which require affirmation of the party that can be done by clicking the ‘I accept’ option. As the name suggests, it is a web- based agreement.

Additionally, we have shrink-wrap agreements. These are ones agreed upon by the user when a software is installed from the CD-ROM.

Example of web-wrap agreement can be e-bay user agreement and that of shrink-wrap agreement can be Nokia PC suite software.

Legal Status

  • IT Act (Sec. 10A) mentions that an e-contract is valid and enforceable)

  • The Indian Evidence Act also makes electronic records admissible in the court of law, which means that e-contracts hold evidentiary value too. Relevant provisions here are Sections 85A, 85B, 88A, 90A, 85C (deals with presumptions as to electronic records) and 65B (deals with admissibility of electronic record).

  • E-contracts have also been recognized by Consumer Protection Act and Indian Copyright Act.

Example of E-Contract

A big example of e-contract is the purchasing of goods from websites like amazon. Everything is done digitally here, be it offer, acceptance, consideration (payment), etc. And if any breach is there, then the aggrieved party can sue the opposite party, as it has been given legal recognition.

Another example of e-contract is of booking railway tickets online. As done on IRCTC’s website or from its app, the contract between the passenger and the IRCTC is done digitally. Previously, one had to stand in long queues for booking railway tickets but now, it can be done from home easily So, it has become way easier and as it is legally valid, one doesn’t have any doubt for the same.



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