Page 1 of 4
E-CONTRACTS
E-contract is a kind of contracts formed by negotiation of two or more individuals through the
use electronic means, such as email, the interaction of an individual with an electronic agent,
such as a computer program or the interaction of atleast two electronic agents that are
programmed to recognize the existence of a contract.
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. Although legal capacity is not explicitly dealt by the Information Technology Act,
the law presumes that once an online contract is concluded, both the parties are presumed to be
competent to do so. In other words, neither party is allowed to raise an objection at a later stage
that the contract is unenforceable for want of competence on the part of the parties.The doctrine
of Uberrimaefidei will be strictly adhered to in case of electronic contract and one party acting
to his detriment on the representation of the other that he is competent should not be put to any
prejudice.
Types of Electronic Contracts
Broadly, e-contracts may be classified into following three types. While the shrinkwrap
transaction has been around for some time and actually exists in a paper environment, the other
two types of transactions (click-wrap and browse-wrap) are suitable to electronic commerce:
• Click-wrap Agreements
• Shrink-wrap Agreements
• Browse-wrap/Web-wrap Contracts
Page 2 of 4
Page 3 of 4
ENFORCEABILITY OF E-CONTRACT
The Information Technology Act of 2000 was implemented for the governance and providing
legal sanctity to transactions undertaken through electronic means and also provide for
authentication of digital signature, jurisdiction, penalties in case of breach, etc. Section 10-A
of the said Act has recognized the validity of these e-contracts.
It specifies that if an e- contract fulfils all the essentials as specified in Indian Contract Act of
1872 of a traditional contract i.e. valid offer and acceptance, capacities of the party, free
consent, etc., it will be considered valid and is enforceable in the court of the country for any
kind of breach when undertaken through any electronic means.
[10A. Validity of contracts formed through electronic means.--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 records, such contract shall not be deemed to be unenforceable
solely on the ground that such electronic form or means was used for that purpose.]
section 2(p) as the authentication of any electronic record by a subscriber by means of the
electronic technique specified in the second schedule and it includes a digital signature.
section 5 of the Information Technology Act says that where any law requires that information
or any other matter be authenticated by affixing a signature or any document signed by or bear
the signature of any person, then such requirement shall be deemed to have been satisfied.
Sec 85C of Indian Evidence Act, 1872
The Court shall presume, unless contrary is proved, that the information listed in a Digital
Signature Certificate is correct, except for information specified as subscriber information
which has not been verified, if the certificate was accepted by the subscriber.
Admission of e-contracts in courts
The Delhi High Court in the case of
➔ Societe Des Products Nestle S.A and Anr Vs Essar Industries and Ors [2015]
Page 4 of 4
paved way for the immediate introduction of Section 65 A and 65 B in the Indian
Evidence Act, 1872 relating to the admissibility of the computer generated in a practical
way to eliminate the challenges to electronic evidence. According to section 65 A, the
content of the electronic records can be proved by parties in accordance with section 65
B of the Indian Evidence Act, 1872.
➔ State of Delhi Vs Mohd. Afzal and Others [2002]
held that,” Electronic records are admissible as evidence.”
➔ Trimex International FZE v. Vedanta AluminiumLtd. India
the hon‘ble Supreme Court recognized that the contract whose terms and conditions are
discussed through e-mails between parties, though no formal contract was formed or
signed is valid in the eyes of law.
➔ Feldman v Google, Inc [2007]
the validity of Clickwrap contract was discussed and the hon‘ble court observed that
Feldman had sufficient notice of terms and conditions of the contract as he went through
a proper signing up process including scrolling through whole terms and conditions
page before assenting for it. Hence, the court held that the contract entered between
Feldman and Google was valid.
➔ L.I.C India v. Consumer Education and Research Centre [1995]
the hon‘ble court has tried defining such contracts and observed that where the weaker
parties do not have a bargaining power, such type of contracts were referred as dotted
contracts. ‘Thus, it can be said that the Indian courts have recognized the concepts of
these contracts though no guidelines for its regulation have been laid down by it. The
reliance can be placed on the foreign judgments based on the facts and circumstances
of the case, yet a strong necessity for proper legislative structure for its implementation
has aroused has the Indian economy is moving to paperless transactions.
