E-Contracts And Its Relevance In Today’s World

Electronic Contracts or E-Contracts are the contracts which are made digitally and generally the part of the general contract where the meeting of the parties occur is not included in an E-Contract. Due to the easy ways of executing an E-Contract, many have adopted the E-Contract style and in today’s world its prevalence is growing every day. E-Contracts are like the regular paper-based contracts in the essentials required for a contract to be valid and follows the essentials provided in Section 10 of the Indian Contract Act, 1872. Although the Indian Contact Act, 1872 does not mention E-Contracts, it does not prohibit E-Contracts as well. E-Contracts are very popular among e-commerce businesses and businesses who are internationally present.

Types of E-Contract:

There are three types of E-Contracts generally used which are mentioned below:

  1. Shrink Wrap Contracts: These contracts are the licensed agreements which are present while buying any software products and usually seen in the plastic wrapping or box in which the product comes in or the manual provided along with the product. The terms and conditions to access the product are enforced upon the buyer and indemnifies the manufacturer of the product for any copyright or intellectual property rights violation. The contract takes effect as soon as the buyer opens the package of the product.
  2. Click Wrap Contracts: These are the agreements where there is a dialog which shows “I Agree”, “I Accept” or “Ok” for the consent of the user and the user must click an option to use the product or service. If the user disagrees or not provide consent, then they will not be able to use the product or service. This type of contracts is seen regularly while online shopping,  where they ask for the consent of user for the user agreement for the usage.
  3. Browse Wrap Contracts: These are the contracts that are binding to two or more parties by the usage of a website and are intended for the consent of the user to terms and conditions and other policies used by the website for the continuous use of the website by the user.

Legal Framework for E-Contracts:

E-Contracts are gaining lot of attraction in the business world and with it the need for regulating E-Contracts and recognizing these contracts legally has been a priority in India. Though it has not been recognized in the Indian Contract Act, 1872, it has been recognized in various other acts in India and has been an emerging legal are and legal topic. The following are the provisions made for E-Contracts:

  • Information Technology Act, 2000: Section 10A of the IT Act, 2000 mentions the validity of contracts made digitally and states that any contract made digitally cannot be made not enforceable based on the sole fact that it is made electronically. Further, similar to a paper-based contract the acceptance of the contract should be done by the parties through their signatures. In the case of E-Contracts electronic signatures are considered. Section 4 of the IT Act provides legal recognition of E-Contracts and states that where the physical form is required there should be a physical form of the contract as well as E-Contract.
  • Indian Evidence Act, 1872: Under the Indian Evidence Act, 1872, E-Contract is considered having the same evidentiary value as a general paper-based contract. Section 3 of the Act defines a ‘evidence’ and has a very inclusive definition and mentions that any electronic evidence produced to the court is considered as documentary evidence.

The E-Contracts can be executed in various electronic modes by the parties. One such way of executing a E-Contract is by way of digital signature which has a digital signature certificate given by a licensed authority for the same affixed in the E-Contract by the parties. Another way of executing E-Contract is the way of scanned copy of the document with a physical signature in the E-Contract.

E-Contracts have gained more importance in the current scenario especially with the government encouraging a digital environment in the business world. The COVID-19 Pandemic led to a major change in the business world and with many organizations adopting “Work From Home” scheme, E-Contracts have become more popular. Along with gaining recognition, the legal issues and regulations are also highlighted in the recent times and new laws for the protection of the parties have been created every day.


Vishali Sivagnanam

Amity Law School, Noida

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