An e-Contract is an agreement that is enforceable by law and is in all respects drafted, negotiated,

and executed digitally. Unlike a traditional contract which is paper-based, e- Contracts are digital
in their entirety. All the essential requirements of a valid contract are required to be fulfilled by e-
contracts too; but one of the main distinguishing aspects of e-contracts is that the e- contract is
accepted by means of electronic signature or other electronic modes of acceptance.

Processes available for forming e-contract

1. E-mail: Offers and acceptances can be exchanged entirely by email, or can be collective
with paper documents, faxes, telephonic discussions etc.
2. 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.).
3. 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.

Kinds of e-Contracts
Click-Wrap Agreement
• Clickwrap or Clickthrough Agreement/License is a form of electronic agreement that is used
for software licensing, websites, application downloads, and other electronic media such as,
downloading or installing software, purchasing an airline/railway/bus ticket, registration of an
account on social media platforms, etc.
• These kinds of agreements are “take it” or “leave it” kinds of agreements. The bargaining
power is limited and is not widely available.
• If the customer/client wants to avail of the service, he shall click on “I accept” or “I agree”
or “Ok”.
• Similarly, if he wants to reject the service then he can simply click “Cancel” or close the
window directly.
• Once dismissed, the customer/client cannot utilize the administration or item.
• The terms and conditions of service or license might not be always visible on the same
webpage or window, but they are always accessible before the client gives his
acceptance or rejection.
• Clickwrap agreements allow online organizations to set up contracts with various clients
without arranging exclusively and personally with them.
• Some companies, such as banking sites or apps, place the agreement that the customer/client
has to sign on the page itself. This makes sure that the customer/client reads and understands
before accepting the Terms of Services, thus
reducing the situations of dispute.
• Other companies require the customers/clients to offer affirmative assent like check a box, or
leave initials at different places in the contract to call notice to certain
essential clauses and affirm assent to them both individually, as well as assent to the entire
agreement. This is common in leasing/renting agreements.
• Most social networking sites or apps layout multiple agreements that are accepted
simultaneously through a single assent.
• These popular checkboxes generally have links to the agreement in reference, which is hosted
on another page entirely.
• Clickwrap Agreements facilitate transactions and are praised for their ease of utilization,
enforceability, and validity.

Few considerations to be followed by Offeror

1. Affirmative consent of the user
• When a buyer or client taps a box to validate rather than withdraw his permission, this is
known as active consent.
• The accept box is often pre-ticked and consented by the host, and the recipient must uncheck
the box if he wants to refuse the agreement. Pre-ticking boxes are not only
unethical and risky, but it is also illegal in certain nations.

Consumer Protection (E-Commerce) Rules, 2020

Rule 4(9)-
Every e-commerce entity shall only record the consent of a consumer for the purchase of any
good or service offered on its platform where such consent is expressed through an explicit
and affirmative action, and no such entity shall record such consent automatically, including
in the form of pre-ticked checkboxes

2. Reasonable and Prominent notice of the Terms of Service

The terms of operation (ToS) must be displayed. Until pressing "I accept," customers/clients
have an inherent right to familiarise themselves with the terms and conditions.
Customers/clients are considered to have constructive experience in cases when they have
offered their legal permission but have not read the TOS. The advantage of presenting the ToS
in this way is that every rational individual may view and interpret it.

3. Easily understandable to the public

Terms of service and other online legal documents should be written in a way that a layperson
or anyone without legal experience can interpret, grasp, appreciate, and commit to.
4. Bargaining Power
Clients/Customers have few choices other than agreeing on the terms of the agreement by
clicking "I approve," or quitting the web by exiting or closing the tab. A clickwrap
arrangement may be declared unenforceable due to abuse of authority.
Contracts of adhesion or unfair purchasing authority are frowned upon under contract law.
Due to a lack of negotiating power, eCommerce TOS are only enforceable if they list the site's
conditions simply and specifically.

Factors to be considered by Offeree

• These electronic agreements are getting mainstream both domestically and internationally,
requiring the clients/customers to be aware of the contents, agendas,
terms, and conditions, etc. of the agreement to prevent heavy losses in terms of money and
time fighting a case.
• The most basic precaution is to read and understand the contents and the terms of the
agreement.
• The client/customer should give a cursory glance to be aware of what and how much data
will be shared with the host party. Contracts of a higher priority, such as opening
an online bank account or ordering costly products and services online, must be carefully read
before approval.
• If a contract does not have certain terms and conditions, the contract may be challenged in a
court of law.
• Most Clickwrap Agreements contain a provision for arbitration or settlement, which is
normally held in the host's country or where the host lives.
• Such words can be emphasized when arguing that the deal is overly discriminatory because
it offers the host an unfair benefit in terms of saving money on travel and other expenditures.
The faction with fewer negotiating influences requires insufficient resources to fly to a foreign
nation and observe court hearings.

Browse-Wrap Agreements
• A browse-wrap agreement is a type of license agreement that governs access to and usage of
materials on a website or in a downloadable product.
• A browse-wrap agreement does not enable you to demonstrate your agreement to the terms
and conditions by checking a box that says "I accept.
”
• Rather, a website consumer consents merely by utilizing the product, such as by visiting a
certain website page or installing apps.
• In Browse Wrap agreements, a hyperlink is mentioned on the website which contains the
terms and conditions regarding the usage of the website.
• These terms and conditions generally claim that by the usage of the website, the person has
voluntarily consented to be bound by the terms and conditions mentioned.
• For example, e-commerce websites such as Amazon, Flipkart, Myntra, Snapdeal, etc, display
a hyperlink on their websites under the tab of “Terms and conditions” or
“Terms of Use”.
• By clicking the hyperlink, it directs the client/customer to a page displaying the terms and
conditions in detail. These terms and conditions contain a precise statement, stating
that by accessing, browsing, or using the website, the client/customer indicates his consent to
all the terms and conditions of the website.

Validity of Browse-Wrap Agreement

• An agreement through the website binds the user to the website’s terms and conditions while
browsing the website.
• It doesn’t need any explicit consent from the user, unlike click-wrap agreements.
• In the browse-wrap agreement, it is deemed that the user
has accepted the terms and conditions.
• Thus, courts have discovered that it is not a binding or enforceable contract unless the website
owner produces evidence that the user had actual knowledge of the terms and conditions
consented through the website.

Shrink-Wrap Agreements
• The Shrink Wrap Agreement is similar to the Click Wrap Agreement except that it is a
physical document. The terms and conditions are included in the purchased kit.
• Shrink Wrap contracts are those agreements that contain the terms and conditions of the usage
of the product. They are usually present on the manuals or the outer plastic
layer of the software products that the client/customer purchases.
• For example, a CD- ROM. As and when the buyer opens the pack or unveils the CD, the
contract is said to be concluded.
• These are “take-it-or-leave-it” contracts wherein the terms and conditions of the contract are
set up by the host party while the client/customer cannot negotiate more favourable terms.
• The acceptance of the terms and conditions on the part of the client is implied when he opens
the package or the bundle accompanying the product.

• As digital distribution grows, shrink-wrap licenses are on the decline.

• To be the most effective, the box visible through the shrink- wrap should state that the
software is copyrighted and the end-user shall be subject to the official terms and conditions
of the agreement within the box. Finally, within the shrink-wrapped box, the full terms of the
license are printed.
The major disadvantage concerning the enforceability and validity of such an agreement is
the fact that while the customers' consent might be implied from the opening of the plastic
packaging, there is no informed consent in the said matter per se, which results in the ambiguity
about the validity and enforceability of the said agreement.
Validity of Shrink-Wrap Agreements
• There have been instances of court cases that have challenged the use of EULAs within
shrink-wrapped software as many complaints have forced some software companies and
retailers to accept returns of opened software or to provide EULAs on their websites for
consumers to read before purchasing their products.
• The buyer’s act when he opens it, uses the product, reviews the license and doesn’t reject the
product, the shrink-wrap license becomes valid, and the agreement is concluded and the
purpose achieved.
• While there is ambiguity about the enforceability of shrink- wrap agreements in some
jurisdictions, the lack of workable alternatives to such agreements has ensured their continued
and wide-spread use.
• In the case of Interglobe Aviation, the High Court did not consider the terms of the Indigo
Carriage only because the people purchasing tickets are not expected to read the terms. But the
Supreme Court overruled that reasoning and held that the buyer is expected to read the terms
in cases of shrink wraps as well.
"One of the reasons assigned by the High Court to hold that Permanent Lok Adalat at
Hyderabad had jurisdiction was that the term in the IndiGo conditions of carriage that only
courts at Delhi will have jurisdiction should be ignored as most of the passengers buying tickets
from IndiGo may not read the terms and conditions regarding jurisdiction of courts and
therefore, the court should adopt a liberal approach and ignore such clauses relating to
exclusive jurisdiction. The said reasoning is not sound. The fact that the conditions of carriage
contain the exclusive jurisdiction clause is not disputed. The e-tickets do not contain the
complete conditions of carriage but incorporate the conditions of carriage by
reference. The interested passengers can ask the airline for a copy of the contract of carriage
or visit the web-site and ascertain the same. Placing the conditions of carriage on the web-site
and referring to the same in the e-ticket and making copies of conditions of carriage available
at the airport counters for inspection is sufficient notice in regard to the terms of conditions of
the carriage and will bind the parties. The mere fact that a passenger may not read or may not
demand a copy does not mean that he will not be bound by the terms of contract of carriage.
We cannot therefore, accept the finding of the High Court that the term relating to exclusive
jurisdiction should be ignored on the ground that the passengers
would not have read it."

Other types of e-Contracts

Scroll Wrap Agreements
The Scroll Wrap Agreements require the user to scroll down the License Agreements, implying
that it has been read by the user by scrolling down through the terms and conditions before
they can give their assent or rejection.
Sign-In Wrap Agreements
The Sign-In Wrap agreement is a kind of E-Contract in which once the end-user has signed
into an online service or signs in to use a product the acceptance is acquired.

Validity of e-Contracts
• In India, there are no concrete judicial precedents on the validity of shrink-wrap and click
wrap agreements.
• However, courts in other countries have dealt with such type of agreements.
• In the US, the courts have held that shrink wrap agreements are enforceable as long as they
do not violate the general principles of contract law and that even though the specific terms of
bargain were not disclosed until after the sale, the contract had been validly formed by the
purchaser's conduct.
• Similarly, Click Wrap contracts are also enforceable in the US.
• The Appellate Division of Superior Court of New Jersey held that a valid and binding contract
is entered into by the plaintiff by clicking the "I Agree" option and that the former is bound by
the resultant 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.

LIC India v. Consumer Education and Research Center

The Supreme Court interpreted an insurance policy issued by Life Insurance Corporation of
India by bringing in certain elements of public purpose. The court declared a term
in the policy, pertaining to restricting the benefit of the policy only to those people employed
in the Government, quasi- Government or reputed commercial firms as void under article 14
of the Constitution.

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."

• It was stated that it is settled law that if a contract or a clause in a contract is found
unreasonable or unfair or irrational, one must look to the relative bargaining power of the
contracting parties.
• In dotted line contracts there would be no occasion for a weaker party to bargain as to assume
to have equal bargaining power.

Factors considered by Courts generally in determining fairness of e-contract

1. 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.
2. The services or goods sought by him under the e-Contract were of absolute necessity
3. That he had no other means for availing the goods or services.

Regulation of e-Contracts
Like a regular contract under the Indian Contract Act, e-contracts are governed by the
Information Technology Act, 2000 (IT Act) which came into force on 17th October, 2000 and
is a comprehensive law governing inter alia, electronic contracts, electronic records and
electronic signatures in India.
• The law is based on the Model Law on Electronic Commerce adopted by the United Nations
Commission on International Trade Law [‘UNCITRAL’].
• It is an Act to provide legal recognition for transactions carried out using electronic data
interchange and other means of electronic communication.

Provisions of IT Act, 2000

Section 4-Legal recognition of electronic records-Where any law provides that information or
any other matter shall be in writing or in the typewritten or printed form, then,
notwithstanding anything contained in such law, such requirement shall be deemed to have
been satisfied if such information or matter is-
(a) rendered or made available in an electronic form; and
(b) accessible so as to be usable for a subsequent reference.

Section 10-A of the Information Technology Act, 2000 highlighting the validity of E-Contracts
states that: “Where in a contract formation, the communication of proposals, the acceptance of
proposals, the revocation of proposals and acceptances, as the case may be, are expressed in
electronic form or by means of an electronic record, such contract shall not be deemed to be
unenforceable solely on the ground that such electronic form or means was used for that
purpose.”

The provision mentioned above was included by the Information Technology (Amendment
Act), 2008 supposedly after marking the growing subservience of commercial agreements on
electronic means. This includes electronic communication of the proposal, its acceptance and
finally the formation of the contract between the parties.

Trimex International FZE Ltd. Dubai v. Vedanta Aluminium,(2010) 3 SCC 1

The Supreme Court held that where the offer and acceptance has been made by the parties
through e-mail the same shall not affect the implementation of such contract.

Tamil Nadu Organic Pvt. Ltd. and Ors. v. State Bank of India, AIR 2014 MAD 103
In this case the e-auction took place between the parties, the concerned High Court while
applying the provisions of IT Act held that even if a contract is executed by electronic means
it gives rise to a contractual liability and is enforceable under law.

Requirement of Signature
Section 5-Legal recognition of electronic signature -
Where any law provides that information or any other matter shall be authenticated by affixing
the signature or any document shall be signed or bear the signature of any person, then,
notwithstanding anything contained in such law, such requirement shall be deemed to have
been satisfied, if such information or matter is authenticated by means of electronic
signature affixed in such manner as may be prescribed by the Central Government.

Requirements of Signature
Digital Signature Certificates (DSC) are also legally valid and enforceable as per the IT Act
(2000). Considering that the IT Act has recognised e-signatures as legal and binding, the same
may also form a strong basis for initiating litigation before a court of law.

Admissibility of E-Contracts as Evidence by Courts

Section 3- Under the Evidence Act, 1872, an e-agreement has the same legal effect as an
ordinary paper-based agreement. The definition of “evidence” as provided under Section 3 of
the Evidence Act includes “all documents including electronic records produced for the
inspection of the court.”

Section 65A of the Indian Evidence Act, 1872, recognizes admissibility of electronic records
as evidence. It states that the contents of electronic records may be proved in accordance with
the provisions of Section 65B of the said Act.

Section 65B of the Indian Evidence Act, 1872 provides for acceptance of electronic evidence
and further states that any information stored in an electronic mode that can be printed on a
paper, stored, recorded or copied in optical or magnetic media produced by a computer shall
be deemed to be a document and such documents shall be admissible in any proceedings,
without further proof or production of the original, as evidence or any contents of the original
or of any fact.
In addition to the above, section 65B(4) states that a certificate needs to be presented that
recognizes the electronic record having the statement and explicates the way in which it is to
be presented.

Section 85C of the Indian Evidence Act, 1872 provides that if a digital signature is affixed to
a particular document then the court shall presume that such document is true and correct.
The Indian Evidence Act, 1872 thus requires a court of law to presume that the contract has
not been altered since the digital signature is affixed by either of the parties and such digital
signature was affixed with the intention of approving it. Therefore, there is an advantage for
contracts to be executed using a digital signature issued by the licensed Certifying Authorities
versus other electronic means.

Execution of Contracts electronically

For executing contracts electronically, the contract needs to be authenticated by the respective
parties to the contract. There are two methods by which contract can be authenticated.
1. By affixing digital signature certificate and
2. By affixing the hand-written signature electronically.
According to the provisions of section 3A of the IT Act, a subscriber may authenticate any
electronic record by such electronic signature or electronic authentication technique
which is considered reliable or may be listed in the second schedule of the IT Act.
Further, an electronic signature is considered to be reliable only when it fulfils the following
criteria such as:
• electronic signature is linked only to an individual and not to any other person;
• electronic signature while executing the contract was under the control of the signatory to
whom it belongs;
• any alteration to be made to electronic signature after affixing signature is detectable.

As per Second Schedule of the IT Act, electronic signature technique using Aadhaar or e-KYC
services shall be considered to be a valid electronic signature. Users with an Aadhaar ID are
free to use online e-signature services to securely sign documents online.

Notarization of E-Contracts
Notarization is a process that involves certifying a legal document by a public notary. As
government officials, notaries serve to witness the validity of signatures attached to legal
documents like a contract, deed, mortgage, and testament etc.
The Concept of E-Notarization is out of the public eye even while electronic signatures are
deemed valid under the IT Act, pertaining to certain exceptions provided under the
aforesaid act.
In order for the signature to be validated, traditional notarization demands that the signer be
physically present before a notary at the time of the execution.
Remote or online notarization, however, enables the signer and the notary to be at separate
places at the time of execution and the process takes place by way of audio-visual
technology.

Stamp duty on e-contracts

According to the provisions of Section 35 of the Indian Stamp Act 1899, the instrument which
is chargeable with stamp duty shall be admissible as evidence when the appropriate stamp duty
has been duly paid on the instrument. Moreover, the contracts executed electronically have not
been exempted from payment of stamp duty. Therefore, it can be established that the
documents authenticated with electronic signatures in compliance with the procedure as
prescribed under IT Act are validly executed and are liable to payment of
stamp duty.

Further Stamping Requirements

One of the important documents evidencing an online transaction is the receipt, provided by
the online vendor to the customer at the end of a transaction. Receipt, as per the Indian Stamp
Act, 1899, includes any note, memorandum or writing, whereby any money, or any bill of
exchange, cheque or promissory note is acknowledged to have been received.
Difficulties with e-Contracts
While there have been large strides in bringing the legal frame work up to speed with new
technology and resultant transactions through E-Contracts, it can be said that the legal frame
work pertaining to E-Contracts in India is still in the nascent stages as compared to other
countries. E-Contracts like Click Wrap, Browse Wrap and Shrink Wrap need to be specifically
recognized and an efficient frame work to regulate them needs to be provided which would
consequentially eliminate many ambiguities and blind spots encountered by parties while
entering into contractual relationships through these types of agreements.

Jurisdictional Issues in e-Contracts

• The Internet has no precise boundary. Each country has diverse laws making it harder to
determine which laws of the state will be valid in case of breach.
• Parties may have different nationalities and the subject- matter of the contract might be living
or carrying on their business in another state.
• Contracts may also have been signed in entirely different states altogether which has no nexus
with the parties or the subject matter.

Statutory Position in India

In India, Civil suits have expressly been given power to try the civil suits unless barred as per
the Section 9 of the Civil Procedure Code, 1908.
Section 13 of the Code also recognizes the judgments given by the foreign courts having
competent jurisdiction and provides for their enforcement except under few circumstances.
As per the Section 20 of the Code, two principles fundamental have been prescribed to
determine the jurisdiction:
• The place where defendant(s) at a time of commencement of suit resides or voluntarily carries
out its business.

Where does the cause of action arise?

Section 4- Indian Contract Act, 1872-Communication when complete.
The communication of a proposal is complete when it comes to the knowledge of the person
to whom it is made. The communication of an acceptance is complete, as against the proposer,
when it is put in a course of transmission 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.
The communication of a revocation is complete,—as against the person who makes it, when it
is put into a course of transmission to the person to whom it is made, so as to be out of the
power of the person who makes it; as against the person to whom it is made, when it comes to
his knowledge.

Section 13- IT Act, 2000- Time and place of dispatch and receipt of electronic record.
(1) Save as otherwise agreed to between the originator and the addressee, the dispatch of an
electronic record occurs when it enters a computer resource outside the control of the
originator.
(2) Save as otherwise agreed between the originator and the addressee, the time of receipt of
an electronic record shall be determined as follows, namely:—
a. if the addressee has designated a computer resource for the purpose of receiving electronic
records, —
(i) receipt occurs at the time when the electronic, record enters the designated computer
resource; or
(ii) if the electronic record is sent to a computer resource of the addressee that is not the
designated computer resource, receipt occurs at the time when the electronic record is retrieved
by the addressee;
(b) if the addressee has not designated a computer resource along with specified timings, if
any, receipt occurs when the electronic record enters the computer resource of the addressee.
(3) Save as otherwise agreed to between the originator and the addressee, an electronic record
is deemed to be dispatched at the place where the originator has his place of business, and is
deemed to be received at the place where the addressee has his place of business.
(4) The provisions of sub-section (2) shall apply notwithstanding that the place where the
computer resource is located may be different from the place where the electronic record is
deemed to have been received under sub- section (3).
(5) For the purposes of this section, — (a) if the originator or the addressee has more than one
place of business, the principal place of business, shall be the place of business;
(b) if the originator or the addressee does not have a place of business, his usual place of
residence shall be deemed to be the place of business;
(c) "usual place of residence", in relation to a body corporate, means the place where it is
registered.

Position in USA
Minimum Contacts Principle
In the US, out of state defendants can be brought within the jurisdiction of the forum state only
when they have minimum contacts with that state. This is called the minimum contacts
principle. Irrespective of physical presence within a forum, a plaintiff who has meaningful
contacts, ties, or relations with the forum state is permitted to approach the courts in the forum
state.

This test was laid down in Compuserve Inc. v. Patterson.89 F.3d 1257 (July 22, 1996)(United
States Court of Appeal for the 6th circuit). Compuserve was based in Ohio while Patterson was
based in Texas. However, the court held that by doing business in Ohio, Patterson was
amenable to the Ohio jurisdiction. The shortcoming of this method is that there exists no
objective standard of determining what constitutes minimum contact. It is unclear as to whether
minimum contact depends on the number of people using the service or the number of times
the website was accessed or the number of hits received or any other such standard.

Purposeful Availment Test

The U.S. Supreme Court in International Shoe Co. v. Washington laid two-part test to
determine the jurisdiction in such cases as following:
• Plaintiff must show the defendant has sufficient “minimum contact” in the forum state.
• The defendant purposefully directed its activities towards the forum state.

In Burger King Corp. v. Ridzewicz, U.S. Supreme Court further clarified that the physical
presence of the defendant was not necessary within the jurisdiction of the forum court for the
purposeful availment test.
In Neogen Corp. v. Neo Gen Screening, Inc the Court of Appeals held that the Purposeful
Availment requirement is satisfied if the website is interactive enough to a degree that it
specifically intended interaction with the resident state.

Sliding Scale Theory

This theory, laid down in the landmark case of Zippo Mfg. Co. v. Zippo Dot Com, Inc.(January
16, 1997) (W.D. Pa.). classifies websites into active websites, interactive websites and passive
websites. Active websites are those that facilitate contractual relationships. In such cases, the
personal jurisdiction of the forum is attracted if it is available for use by the forum state even
though the website is operated outside India. Interactive websites are those that facilitate an
exchange of information. In such cases, personal jurisdiction depends on the commercial
nature of the exchange. Passive websites cannot attract personal jurisdiction as they only make
information available without initiating contractual or commercial relations.

Effects Test or Calder Test

Since the Zippo Sliding Scale Test was given in the early days of World Wide Web, it caused
legal complexities in later period. It was found ill-suited for modern internet jurisdictions
problems. As a result, the Effects Test, also known as Calder Test, was advocated as an
improvement over the Zippo test. It was first evolved in Calder v. Jones, the U.S. Supreme
Court held that the courts will exercise jurisdiction if it is proved that the effect or injury due
to the defendant’s website is felt in the forum state. U.S. Courts now apply a mixture of the
above tests to determine the jurisdiction.

Indian Cases
1. Purposeful Availment
2. Effects Test
Independent News Service Pvt. Ltd. Vs India Broadcast Live LLC and Ors (2007) 2 ILR Delhi
1231I
The facts of this case are that the Plaintiff`s ran a news channel called “India TV” which they
launched in 2004. The plaintiff also became the owner of the domain name “INDIA TV”.
Defendants one and two controlled a website by the name “indiatvlive.com”. Plaintiff initiated
an action of passing off against the Defendants seeking an order of injunction from using the
domain name www.indiatvlive.com. Defendant one filed a suit in the District Court of Arizona
while the suit in India was pending. Plaintiffs filed an application seeking injunction from
pursuing the case in the court of Arizona.
It was held that the defendant’s actions must have a “sufficient connection” with the forum
state and that the exercise of jurisdiction must be reasonable. The court held that it was not
sufficient to establish the presence of a passive website in the forum state. Relying on the
decision of Cybersell, Inc v. Cybersell, Inc, 130 F.3d 414 (December 2, 1997) (US C.A 9th
Cir)., the court introduced the doctrine of purposive availment.

Banyan Tree Holding Pvt. Ltd. v. Murali Krishna Reddy, 2008 (38) PTC 288 (Delhi High
Court).
In this case, the defendants offered services through an interactive website accessible in India
called “www.banyantree.com”. The website was accessible in all parts of India, including
Delhi. According to the Plaintiff the defendant’s located in Hyderabad had a deceptively
similar name for their services. They initiated a proceeding in the high court of Delhi on the
grounds that the defendants services were available in Delhi.
The court held that in order to satisfy the court that it has the jurisdiction to entertain the suit,
the plaintiff would have to show that the defendant purposefully availed itself of the
jurisdiction of the court.
• The court laid down that purposeful availment is possible when it is shown that the defendant
used the website with an intention of concluding a commercial transaction with the website
user and that the plaintiff suffered injury or harm as a result of the defendant`s specific targeting
of the forum state.
• It was stated that in order to show that some part of the cause of action had arisen in the forum
state, the plaintiff will have to show that the defendant`s website was targeted specifically at
viewers in the forum state for commercial transactions. This test been applied in several other
e contract cases as well. Article 6(2) of the UNCITRAL Model law on Electronic Commerce
states that the place of business “is that which has the closest relationship to the relevant
contract, having regard to the circumstances known to or contemplated by the parties at any
time before or at the conclusion of the contract”