Legal Issues Relating To Electronic Contract Under The Information Technology Act, 2000

Written By: Meghna Prusty

Introduction

With the advent of industrialization, westernisation, and growth, global technological advancements have resulted in significant shifts in business and trade. Business and trade are no longer constrained by territorial boundaries or the requirement of physical presence at the contracting location. E-commerce is the term for this type of business behaviour.

E-commerce activities are becoming a vital element of an individual’s life as the internet has become a part of our daily lives for over a decade. We don’t realise we’ve become a part of this e-commerce system until we buy vegetables at an online store or buy airline tickets. The rising usage of e-commerce has made our lives easier and more organised, but it has also increased the number of incidences of fraud and crime. To control these types of contracts and make our jobs easier, we learned about many types of electronic contracts.

E-Contracts are quite similar to traditional contracts, with the exception that they are completed electronically rather than by paper and pen. These types of contracts are practical, time-saving, and cost-effective. They work similarly to normal contracts in that vendors show their items to potential purchasers with all terms and conditions, and the buyer, after carefully analysing all aspects of the contract and, if necessary, discussing it, confirms the transaction and pays payment.

The deal is completed in under a minute by simply appending both parties’ digital signatures to an e-copy of the contract. Initially, many countries were split on whether or not to recognise the validity of e-contracts, but today, the majority of countries have passed their separate laws to recognise e-contracts.

Valid e-contracts are the foundation of e-commerce, so enough attention must be paid to the establishment of a valid e-contract before transactions are concluded and carried out. The parties’ total autonomy in negotiating the terms is preserved. Until the legal requirements are completed, e-contracts open up a plethora of commercial options. Because commercial businesses use the Internet to distribute and expand their business practices, numerous e-contracts are necessary.

Electronic Contract

The demand for and value of e-contracts is growing as the globe becomes more globalised. Others sitting in one part of the world can make transactions with people sitting in another corner of the world in a matter of minutes. This not only saves them time, but it also saves them money on the voyage, delays, and any misunderstandings that may arise during the contract period. The Indian Contract Act of 1872, the Information Technology Act of 2000, and other pieces of legislation in India govern e-contracts.

E-contracts are contracts that are made between two parties through electronic means of negotiation. Online contracts, digital contracts, and cyber contracts are other terms for them. Similarly, goods and services are exchanged between the two parties in e-contracts for a certain sum of money. These contracts are extremely similar to paper contracts in nature, but they are drafted and signed electronically. As a result, the vendor can directly contact the customer without the need for a middleman.

The Information Technology Act,2000

Despite the fact that the Indian Contract Act dealt with contracts, it made no mention of the legality of an e-contract. As a result, the Information Technology Act of 2000 established legal recognition for electronic exchanges and transactions. Under the IT Act of 2000, electronic agreements would be considered completely legal. The verification of electronic contracts is affirmed by both parties attaching electronic signatures to them, according to Section 3 of the IT Act, 2000. Electronic record confirmation by electronic signature or electronic validation method will be regarded as reliable. In this way, sophisticated marks can be used to create an electronic agreement that is recognised by Indian laws.

According to Section 4 of the Information Technology Act of 2000, legitimate acknowledgement of e-records occurs when any information that is preserved as a hard copy, typewritten, or printed structure is made available to a customer in an electronic format for subsequent reference. In layman’s terms, this means that any archive, whether composed or printed, will be treated the same way in the electronic framework and will have the same legitimacy. Section 10A of the IT (Amendment) Act of 2008, which was recently introduced, unambiguously says that about the validation of agreements via electronic means.

Section 10A of the Information Technology Act of 2000 considers any electronic contract to be enforceable. Debatable instruments, power of attorney, a trust deed, a will, and agreements accessible to be purchased or moved of Immovable Property are among the instruments to which the IT Act, 2000 does not apply.

Conclusion

E-contracts have come a long way from the days when contracts were solely based on articles. Currently, with the growth of development and e-commerce, e-contracts are becoming more popular, particularly in India. This development will be supported by the pattern of progress in digital banking and debit cards, as well as a surge in professional users and web developers. The most significant portion right now is the law that encompasses all aspects of e-agreements, from downloading a simple app to creating and launching one; everything can be done through digital media.

The advancement of rules such as these will restrict the evolution of websites and how they earn money. They will be constantly monitored by law enforcement, which will lower the rate of crime and fraud. There is no likelihood of any direct encounter today because every trade, negotiation, and commerce is conducted through digital media using various tools and platforms. The most important relationship here is in the form of client and partner trust, which must be preserved at all costs.

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