DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

SABBAVARAM, BHOPAL, MADHYA PRADESH, A.P., INDIA

RESEARCH PAPER TITLE

E-CONTRACTS, DRAFTING OF E-CONTRACT

SUBJECT- Drafting Pleading & Conveyancing (DPC)

NAME OF THE FACULTY

Ms. Bhagyalaksmi N

Name of the Candidate-PRIYANKA SINGH

Roll No.-2017068
Semester-7th
 ACKNOWLEDGEMENT

I  would like to express my special thanks of gratitude to my teacher Ms. Bhagyalaksmi Ma’am
who gave me the golden opportunity to do this wonderful project on the topic “E-Contracts,
Drafting of E-Contract”, which also helped me in doing a lot of Research and I came to know
about so many new things I am really thankful to her.
Secondly I would also like to thank my parents and friends who helped me a lot in finalizing this
project within the limited time frame.

I am overwhelmed in all humbleness and gratefulness to acknowledge my depth to all those who
have helped me to put these ideas, well above the level of simplicity and into something
concrete. Any attempt at any level can't be satifactorily completed without the support and
guidance of all these people.

I would like to thank all these who helped me a lot in gathering different information, collecting
data and guiding me from time to time in making this project, despite of their busy schedules,
they gave me different ideas in making this project unique.

Thank You
Priyanka Singh
2017068
 TABLE OF CONTENTS

1. SYNOPSIS…………...………..…………………………………………………….......1
 Objectives of the Study…………………………………………………………1
 Significance of the Study…………………………………………………........1
 Scope of the Study……………………………………………………………….1
 Research Methodology…………………………………………………………1
 Research Question……………………………………………………………….2
 Review of Literature…………………………………………………………….2

2. INTRODUCTION………………………………………………………………………3

3. VALIDITY OF E-CONTRACTS………………………………………………………4
4. ESSENTIAL ELEMENTS OF E-CONTRACT……………………………………….5
5. TYPES OF E – CONTRACT…………………………………………………………...9

6. STATUTES APPLICABLE TO E-CONTRACTS…………………………………...10

7. CHALLENGES OF E CONTRACTING IN CYBERSPACE………………………12
8. FORMATION OF ONLINE CONTRACTS OR ELECTRONIC CONTRACTS…14
9. JURISDICTION AND PLACE OF EXECUTION OF A CONTRACT……………16
10. SIGNATURE REQUIREMENT………………………………………………………16

11. ENFORCEABILITY OF E-CONTRACTS…………………………………………..17

12. ADMISSIBILITY OF E-CONTRACTS AND E-SIGNATURES AS EVIDENCE...18

13. DRAFT OF AN E-CONTRACT………………………………………………………19

14. CONCLUSION…………………………………………………………………………21

15. BIBLIOGRAPHY……………………………………………………………………...21
 TABLE OF CASES

1. Haji Mohammad Haji Jiva v.E. Spinner and others, (1900) 24 Bom. 510
p.523. Nihal Chand v. Amar Nath, A.I.R. 1926 Lah. 645.

2. Lalman Shukla v. Gaurie Datta Sharma, 1913 MLJ 489.

3. Simbia Steel and Building Supplies v. James Clerk and Eaton Ltd., (1986) 2
Lloyd’s Rep. 225.

4. State of Punjab and Ors. vs. Amritsar Beverages Ltd. and Ors, AIR 2006 SC
2820.
5. Tamil Nadu Organic Private Ltd .& Ors. v. State Bank of India, AIR 2014 Mad.
103.
6. Trimex International FZE Ltd. Dubai vs. Vedanta Aluminium Ltd., 2010 (2)
AWC 1170 (SC).
 SYNOPSIS
The Internet has revolutionized people’s way of communicating. In addition, the way people are
doing business has also changed the Internet and electronic data exchange. It created a new kind
of trade and trade called e-commerce. E-commerce is booming with a high level of internet
penetration worldwide and the rise of internet users. High speed and a geographic absence have
contributed greatly to the growth of e-commerce, which is the key advantage of the Internet. For
instance, a buyer in India can buy goods from a vendor in the United States with just a few clicks
of the mouse, without having to leave their home or office. In an electronic world called
electronic contract or simply e-contract or on-line contracts, e-commerce brought about a new
form of contracting. Electronic contracts are commonly known to many of us. The most common
contracts are “End User License Agreement” or the EULA where the installation of software or
terms/conditions/ user agreement on the Website requires a click on the “I agree ” button.

OBJECTIVE OF THE STUDY:

To study & learn about the E-Contracts & to understand the importance of online contracts in
today’s technological age. The aim is also to learn the drafting of E-Contracts.

SIGNIFICANCE OF THE STUDY:

In this project, we will learn about the benefits of E-Contracts & the problems related to
jurisdiction & place of making of Contract in such contracts.

SCOPE OF THE STUDY:

The scope of the project is limited to the study of E-Contracts & learning drafting of E-
Contracts.

RESEARCH METHODOLOGY:
The researcher has adopted doctrinal method of research and the entire paper is in the form of
analysis of established procedures, following the analytical research style. The sources are
books, articles and web sources.

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RESEARCH QUESTION:
1. Whether the E-Contracts have the same application as offline contracts & what are the
issues of jurisdiction relating to E-Contracts?

REVIEW OF LITERATURE:
This research paper is prepared by referring many books, articles from magazines, journals,
newspapers, internet sources etc.

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INTRODUCTION

The very rapid emergence of industrialisation, globalisation and technicalities formed a great
basis for the growth of technology and the rise of this computer age. Electronic commerce is one
of its products seeing that it is a major economic significance of the 21st century. Thus, internet
is a new culture that has undoubtedly come to stay and while it remains, changes our own style.
The wide range of activities performed with the use of internet has proven to outweigh the old
fashioned way of doing same activities. I can say that the creators of computer must not have
imagined how super useful their creation stands globally today. The internet has a great deal of
impact on business and its practices, local markets will be mostly replaced by global markets.
This change will lead to new business models and of course, the birth of E-commerce. One of
such E-transactions includes Internet contract, which is E-contract.

The calamitous situation of COVID-19 pandemic and the consequent lockdown and other
restrictions imposed by the Government of India have caused road-blocks for all commercial
activities and posed several logistical difficulties. Several transactions which were under
negotiation prior to the pandemic would be in abeyance as the physical signing of contracts has
become challenging. At a time like this, companies as well as individuals have considered opting
for electronic contracts (E-Contracts). An E-Contract is not a new concept and has been
recognized in India even in the pre-pandemic time. In view of this pandemic, there has been an
increase in the execution of electronic contracts and electronic signing of documents.

Since the internet is no more secluded for just mere communication or computing and analysing
of data, online contracts are now the order of the day and there are no differences between online
and offline contracts. Hence, online contracts are still contracts and all the rules of contracts will
still apply.

The online contract formation uses a communication technology which involves numerous
intermediaries such as Internet Service Providers (ISPs). Imagine a contract that an Indian
exporter and an American importer wish to enter into. One option would be that one party first
pulls up two copies of the contract, signs them and couriers them to the other, who in turn signs

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both copies and couriers one copy back. The other option is that the two parties meet someplace
and sign the contract.1

In the electronic age, the whole contract can be completed in seconds, with both parties simply
attaching their digital signatures to an electronic copy of the contract. There is no need for
delayed couriers and additional travelling costs in such a situation. There was initially a
hesitation amongst the legislatures to recognize this modern technology, but now many countries
have passed laws to recognize electronic contracts.

VALIDITY OF E-CONTRACTS

An E-Contract, like any other physical contract, is also primarily governed by the provisions of
the Indian Contract Act, 1872 (ICA). Therefore, the validity of an E-Contract depends on due
satisfaction of all the essentials of a valid contract as under including (i) Offer and Acceptance;
(ii) Lawful consideration; (iii) Lawful object; (iv) Consent; (v) Competency of parties to
contract; (vi) Intention to create legal relationship.

E-contract is any kind of contract formed in the course of e-commerce by the interaction of two
or more individuals using electronic means, such as e-mail, the interaction of an individual
with an electronic agent, such as a computer program, or the interaction of at least two
electronic agents that are programmed to recognize the existence of a contract.2

E-contract is a contract modelled, specified, executed and deployed by a software system.3

The 2 main parties to an e-contract are- The Originator and the Addressee.

- Originator according to the IT Act, 2008 is a person who sends, generates, stores or transmits
any electronic message to be sent, generated, stored or transmitted to any other person and does
not include an Intermediary.

1
https://blog.ipleaders.in/all-that-you-should-know-about-e-contracts/.
2
E-contract law and legal definition, Us legal website, avalaiible at https://definitions.uslegal.com/e/e-contract/, last
seen on 12/02/2017.
3
Vasudha Tamrakar & Pratibha Pal, E contracts and its legality, legal Service India,
http://www.legalserviceindia.com/articles/ecta.htm, last seen on 12/02/2017.

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An Addressee according to the IT Act, 2008 is a person who is intended by the originator to
receive the electronic record but does not include any Intermediary.

ESSENTIAL ELEMENTS OF E-CONTRACT

Since electronic contracts are presently taken as seriously as offline contracts, the same
principles which apply to a valid contract will apply here. The law already recognizes contracts
formed using facsimile, telex and other similar technology. An agreement between parties is
legally valid if it satisfies the requirements of the law regarding its formation, i.e. that the parties
intended to create a contract primarily. This intention is evidenced by their compliance with 3
classical cornerstones i.e. offer, acceptance and consideration.

A. Offer

Under section 2(a) of The Indian Contract Act, speaks of offer. “When one person signifies his
willingness to do or to abstain from doing anything with a view to obtain assent of that other to
such act or abstinence, he is said to make a proposal 4”. Advertisement on website may or may
not constitute an offer as offer and invitation to treat are two distinct concepts. Being an offer to
unspecified person, it is probably an invitation to treat, unless a contrary intention is clearly
expressed. The test is of intention whether by supplying the information, the person intends to be
legally bound or not. When consumers respond through an e-mail or by filling in an online form,
built into the web page, they make an Offer. The seller can accept this offer either by express
confirmation or by conduct. When dealing with business websites, it is important to establish
whether the content of that business website amounts to an “offer” or merely an “invitation to
treat”. An invitation to treat is not capable of being turned into a binding contract by simply
accepting its terms. Rather, it is an invitation to others to make an offer of their own. By contrast,
an offer is an expression of willingness to enter into a binding contract with another party.

The question which arises is, does it apply in electronic contracts? Is it when it enters the
computer resource as provided under Section 13 of the IT Act or when the offeror receives
acknowledgement as in section 12 of the IT Act?

4
The Indian contract Act 1882.

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It is clear that a message can enter into a person’s mailbox without him seeing it, thus, the
element necessary for determining communication of offer in case of posts cannot be the same in
electronic communication. The communication of offer is complete when it comes to the
knowledge of the offeree and acknowledgement is received by him.

The offeror is able to revoke the offer any time before the communication of acceptance is
complete as provided in section 5 of Indian Contract Act and has not been altered by IT Act.

B. Acceptance

One difficult task about entering electronic contract is to know when an agreement has been
reached. Once an offer is accepted, a contract is concluded except the postal acceptance rule
applies. The postal acceptance rule is an exception to the general rule that acceptance of a
contract must be communicated to the offeror before a contract can be in existence. Under the
rule, acceptance of a contract is said to occur at the time the acceptance is posted. Hence, the
communication of acceptance is complete against the proposer when it is put in the course of
transmission to him and as against the acceptor when it comes to the knowledge of the proposer,
that is, when the acknowledgement enters into the into the designated computer resource. There
is no disparity between Indian and Common law in this regard as seen in Lalman Shukla v.
Gaurie Datta Sharma5 where in spite of the fact that he found the boy whose uncle had promised
Rs. 501 to anyone who finds was denied the reward seeing that he came to know only after
finding the boy.

Both offer and acceptance can be generally done through email, website forms, and online
agreements.

Revocation of Offer and Acceptance

The Information Technology Act of 2000 is not a complete one and as a result, the Indian
Contract Act of 1882 is still in use even for electronic contracts. However, the both Acts still
complement each other.

5
(1913) M.L.J. 489.

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Section 5 which speaks of revocation will not be applicable as there will be no much time or time
lag in case of electronic contracts, the dispatch and receipt of mail happens within split of
minutes and simultaneously.

Minor Image Rule

This is a common law principle that denotes that the acceptance must be a mirror image of the
offeror’s offer. This implies that an acceptance which varies in terms as against the original offer
is not an acceptance but a counter proposal which will now have to be accepted by the original
offeror before the contract can be said to be concluded. 6 The terms of the contract will now
become the terms of the counter proposal and it is called Last Shot doctrine which implies that
the terms of the final document in the series leading to the conclusion forms the contract.7

C. Lawful Consideration

The Indian Contract Act of 1872 reads that

In the present scenario, once an item has been supplied and the price has been paid, the
consideration is executed and the requirement is satisfied. Problems may arise at a time when the
consideration is merely executory. This arises when the seller's computer has done no more than
"promise" to supply that item. A key intention that lies behind such promises is, of course, the
intention to be bound by that promise in other words, the intention to create legal relations. The
Contract law cannot entirely apply in e-contracts as in sometimes when an autonomous computer
is used.

D. Lawful Object

The purpose of such contract must be a lawful one. Courts will not enforce contracts that are
illegal or violate public policy. Such contracts are considered void. An agreement which calls for
the commission of a crime is illegal and therefore void. For example, a person could not enforce

6
Haji Mohammad Haji Jiva v.E. Spinner and others, (1900) 24 Bom. 510 p.523. Nihal Chand v. Amar Nath, A.I.R.
1926 Lah. 645.
7
Simbia Steel and Building Supplies v. James Clerk and Eaton Ltd., (1986) 2 Lloyd’s Rep. 225.

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an agreement with another party to burn a house down. Also, an agreement that calls for the
commission of a civil wrong (such as a tort) is illegal and void.

E. Competent Parties to Contract

It is generally accepted that both natural persons and legal persons are capable of entering
contracts, Computers are clearly not natural persons ,and neither American nor English contract
law, at present, deem them to be legal persons. Computers, therefore, are not capable of being
parties to contracts. In our scenario, both the buyer and the seller are natural persons, and
consequently, are capable of being parties to the transaction. The autonomous computer,
however, clearly cannot be a contractual party as the law now stands.8

F. Free Consent

The consent of the both parties must be free from any deceit, mistake, fraud etc. E contracts can
be broadly categorized into:

- Shrink Wrap Agreements

- Click Wrap Agreements

Shrink Wrap agreements are those which can only be read and accepted by the consumer after
the opening of a particular product. The term is described after the shrink wrap plastic wrapping
that is used to cover software or other boxes. Installing software from a CD into your PC is an
example of a shrink wrap agreement.

Click Wrap agreements are mostly found in the software installation process. The user has to
click either ‘Accept’ or ‘Decline’ to accept or reject the agreement respectively. These
agreements lack a certain amount of bargain power. Choosing to make payments online or
choosing to reject it is an example of using a click wrap agreement.9

Either ways, the consent to such must be free. This is quite difficult to determine because
sometimes the margin used to determine the strict rule of free consent gets narrower.

8
https://www.grin.com/document/427203.
9
https://www.indianbarassociation.org/e-contracts/.

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G. Certainty of Terms

Keeping a record of the contract as agreed is vital. This can be difficult if there have been several
email exchanges (perhaps each attaching documents intended to form part of the terms of the
contract) including counter offers and negotiations between the contracting parties. As noted
above, it may be difficult in such a scenario to determine who is the offeror and who has
accepted the final offer, which may determine which party’s terms and conditions apply. In any
event, it is important to ensure that the parties are clear on the content of the final contractual
terms.10

TYPES OF E - CONTRACT

Online contracts can be of three types as underneath:

1.    Shrink-wrap agreements

Shrink wrap contracts are usually a licensing agreement for software purchases. In the case of
shrink-wrap agreements, the terms and conditions for access to such software products shall be
enforced by the person buying it, with the initiation of the packaging of the software product.
Tightening-up agreements are simply the agreements that are accepted by users, for instance,
Nokia pc-suite, at time of installing the software on a CD-ROM. Sometimes, after loading the
product onto your computer, additional conditions may only be observed and then, if the buyer
disagrees, he has an opportunity to return the software product. The shrink-wrap Agreement
provides protection by exonerating the product manufacturer of any violation of copyright or
intellectual property rights as soon as the purchaser tears the product or the coverage for
accessing the product. However, the validity of shrink-wrap agreements does not exist in India
with a stable judgment or precedent.

10
E contract model & enactment-P Radhkrisna-2010.

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2.    Click or web-wrap agreements

Click-wrap contracts are web-based contracts that require the user’s consent or consent through
the “I Accept,” or “OK” button. The user must accept the terms of use of the particular software
with the clickwrap agreements. Users who disagree with the terms and conditions cannot use or
purchase the product after cancellation or refusal. Someone almost regularly observes web-wrap
agreements. The terms of use shall be set down before acceptance by the users. For instance,
online shopping agreement, etc.

3.    Browse-wrap agreements

A browsing wrap agreement can be called an agreement which is to be binding on two or more
parties through the use of the website. In case of an agreement on browsing, an ordinary user of a
given Website is to accept the terms and conditions of use and other website policies for
continuous use. We usually witness such kinds of online contracts in our daily lives. Although
this online agreement is becoming common in all of our businesses, there is no precise judicial
precedent regarding its validity and enforceability. Other countries, such as courts in the USA,
have dealt with those online agreements and held that both Shrink-wrap Agreements and Click-
Wrap Agreements are enforceable as far as the general principles of the contract are not
violated.11

Other types of online agreements include contracts for employment, contractors, contracts for
consultants, sales and resale agreements, distributors, non-disclosure agreements, software
developer and licensing agreements and contracts for source-code escrow.12

STATUTES APPLICABLE TO E-CONTRACTS

Given the nature of E-Contracts, there are certain statutes that have some specific provisions for
governing E-Contracts. All such statutes have to be read together with the provisions of ICA and
not in isolation thereof.

11
https://blog.ipleaders.in/all-that-you-should-know-about-e-contracts/.
12
Computer Internet & new technology Laws-Karnika Seth,Justice Altam Kabir-edn-2013.

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Applicability of Information Technology Act, 2000 E-Contracts as well as electronic
signatures (E-Signature) are recognised under Indian law and are governed by the Information
Technology Act, 2000 (IT Act). Section 4 of the IT Act provides that the requirement for any
information or matter to be in writing or in typewritten or printed form under any law shall be
deemed to have been satisfied if such information or matter is in an electronic form and is
accessible so as to be usable for a subsequent future reference. Section 4 of the IT Act reads as
under:

"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."

Further, Section 10A of the IT Act provides that in a contract formation, the communication,
acceptance and revocation of proposals and acceptances may be expressed in electronic form or
by means of electronic records. Section 10A of the IT Act reads as under:

"Section 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."

In view of the aforesaid provisions of the IT Act, the courts in India also have from time to time
confirmed the validity of contracts executed in an electronic form.

In the case of Trimex International FZE Ltd. Dubai vs. Vedanta Aluminium Ltd.13, wherein the
offer and acceptance had been conveyed by the parties through email in the absence of signed
13
2010 (2) AWC 1170 (SC ).

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documents, the hon'ble Supreme Court of India had observed that once a contract is concluded
orally or in writing, the mere fact that a formal contract has to be prepared and initiated by the
parties would not affect either the acceptance or implementation of such contract. In another
case, Tamil Nadu Organic Private Ltd .& Ors. v. State Bank of India 14 the High Court of
Madras had applied the provisions of the IT Act to an e-auction and observed that contractual
liabilities could arise by way of electronic means and that such contracts could be enforced under
law. Section 10A of the IT Act validates contracts formed through electronic means and the IT
Act enables the use of electronic records and electronic means for the conclusion of contracts
provided that the contract complies with the provisions of the Indian Contract Act, 1872.

Further, as far as the signing of the contracts is concerned, electronic signatures are treated as
equivalent to traditional wet signatures and are also legally recognised under Section 5 of the IT
Act. Section 5 of the IT Act reads as under:

"Section 5 - Legal recognition of electronic signatures – 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.

Explanation.–For the purposes of this section, "signed", with its grammatical variations and
cognate expressions, shall, with reference to a person, mean affixing of his hand written
signature or any mark on any document and the expression "signature" shall be construed
accordingly."

CHALLENGES OF E CONTRACTING IN CYBERSPACE

Researcher observed some issues indicate it will be challenges in forming e contracting in

cyberspace like Discoveries, Inventions and spread of new Information Technologies brought
about by computers, internet and cyberspace widen the scientific horizon but pose new
challenges and created problems for the legal world in all aspects of law. The challenges that we
14
 AIR 2014 Mad. 103.

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facing today are not just confined to any single traditional legal system but in almost all major
categories of law such as contract law, criminal law, Law of torts etc.

In India, The information Technology Act, 2000 (ITA) and amendment in several existing laws
through ITA does enforce and control a level of cyber related problems. However, it has shown
inadequacy of law while dealing with information technology itself. The ITA in many ways falls
short of International standards. Therefore, in the era of information technology such loopholes
in legal framework cannot be ignored and can lead to some impairment for individual as well as
nation. New provisions added through Information Technology (Amendment) Act, 2008 could
be a way out from all these challenges but several changes are still needed for the act to ensure
both functional equivalence and technological neutrality. Hence, there is an urgent need to
redefine the cyber laws in India as per International standards. There are few major areas in
cyberspace in which many challenges have been cropped up on legal front. These areas are
inherent challenges, Legal Challenges, technological challenges, Political and social challenges,
practical challenges etc.15

Inherent Challenges: In many countries the laws related to cyberspace have already been
developed. U.S. and the West drafted their own legislations by either adapting their existing laws
in the context of cyberspace or creating new laws in respect thereof. Determining jurisdiction
and formation of e-contracts are two key issues on which traditional legal principles have been
largely applied by Courts India enacted its first law on IT through the IT Act, 2000 based on the
principles Elicit dated in the UNCITRAL Model law of e-commerce. It extends to whole of India
and also applies to any offence or contravention there under committed outside India by any
person.

15
http://www.legalservicesindia.com/article/1943/A-study-of-Formation-and-challenges-of-electronic-contract-in-
cyberspace.html.

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FORMATION OF ONLINE CONTRACTS OR ELECTRONIC CONTRACTS

Like an ordinary contract, e-contracts consisting of an offer and acceptance are enforceable. The
conduct of the parties, such as exchanging e-mails or acceptance of a condition or terms or by
downloading can also imply a contract. A variety of procedures are available for forming
electronic/online contracts:

Email: The parties may create a valid contract by exchanging e-mail communications. Offers or
acceptances can be completely exchanged via e-mail, or combined with paper documents, faxes,
and oral debates.

Website Forms: In many cases, an e-commerce website offers for sale goods or services that are
ordered by customers, by filling in and submitting an on-screen order form. The seller will enter
into a contract once the order has been accepted. The products and services can be delivered off-
line physically. A contract would also be valid for the terms of use of a website once the user
accepts the contract by clicking “I Agree.”

EULA: The End User License Agreements also form valid contracts in which end users click “I
Accept” or “I Accept the Terms.”

In summary, an e-contract is very different from a traditional contract: it is paperless and it is

sometimes not possible for the parties to meet face to face. Here we try to analyze and examine
various aspects of a conventional online contract.16

The concept of offer and acceptance is the fundamental concept of effective communication in
contract formation. In relation to this question, e-commerce poses a major problem. The offer
and acceptance should be identified as they determine the exact time and place of the agreement,
and thus which jurisdiction applies.

Often in e-commerce transactions between parties, they never meet. The issue is immediate and
the traditional form of contract is challenged, as it makes it difficult to ensure that the parties act

16
https://blog.pandadoc.com/difference-between-electronic-contracts-and-traditional-contracts/.

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legally and that the transaction itself is legal and has taken the necessary steps to respect the
Contract. With regard to bilateral contracts, an offer is a clear declaration of the terms and
conditions in which a person (the offeror) pledges to be bound; the other party (the offeree)
accepts the offer. It’s difficult to determine, on the internet, whether a website is a deal or an
invitation to treat.

The words used in an online offer can frequently be considered misleading, and different legal
systems can deal with these issues differently. An acceptation is an unqualified final agreement
to the terms and conditions of the offer. Generally, it must be communicated to the offeror and
the parties are free to vary by agreement.  E-mail is a common method of acceptance in an e-
commerce environment. Acceptance of an offer becomes effective at the moment the indication
of assent by the offeree reaches the offeror. E-mail is a common acceptance method in the field
of e-commerce, but it is problematic. The ‘Postal Acceptance Rule’ states that if a Party agreed
to enter into a deal by post the contract shall be deemed to have been concluded when the
Offeror sends the letter of acceptance, whether the Offeree receives it or not. This rule does not
apply to e-commerce.17

Requirement as per The Indian Stamp Act

The Indian Stamp Act and different State legislation mandate that documents in which rights are
established or transferred must be stamped. A document not properly stamped shall not be
permitted as proof in a court of law, or even a competent authority unless it was imposed (a fine
of 10 times the amount of the required stamping duty).However, documents cannot be stamped
for an online contract until this date.

Standard Form Contracts

A majority of online contracts belong to the type ‘Click-Wrap,’ a standard contract form in
which all conditions are stated on the software webpage or installation page and all parties are
required to use a click on the button appropriate for the terms and conditions. In standard form
contracts, there is no scope for negotiation. In some cases, the courts (except India) found certain
17
https://www.searchindialegal.com/traditional-contracts-and-e-contracts/.

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specific contractual terms to be unconscionable and abolished. With regard to India’s position,
Article 15(3) of the Indian Contract Act states that where a party holds a domination position and
enters into a contract with another party, and the transaction appears unreasonable on its face or
on evidence supplied, it must burden a person in the dominant position to demonstrate that that
contract has not been concluded under pressure.

JURISDICTION AND PLACE OF EXECUTION OF A CONTRACT

Jurisdiction is a territory or sphere of activity within which a court or other institution’s legal
authority is extended. In the broader sense, it refers to the country or country whose legislation
applies during the period of interpretation of any contractual terms or in the event of a dispute.
The pace of execution of the contract normally determines this. A traditional contract shall be
concluded when contracting parties meet and execute the contract, usually at a predetermined
place and time, by placing the signatures on the document. This is not the case in e-contracts in
which the parties meet online and can be located at different places. Consequently, a strict
determination of the jurisdiction is lacking in the “place of execution”. The parties may however
voluntarily submit themselves to a particular jurisdiction which might be the location for the
business of one of the contracting parties, or a completely different jurisdiction agreed by all of
the contracting parties.18

SIGNATURE REQUIREMENT

In general, signature means signing a document with one’s own name. The principal function of
signing a document is to confirm the identity of the contracting parties and to give consents to
the contractual terms and to refuse repudiation, i.e. when a person appends his signature, he
cannot subsequently refuse that he was not a contracting party. A signature is not essential in
accordance with the Indian Contract Act, which states that a valid contract may also be an oral
agreement between parties. For it to be valid, therefore, a contract must not be signed physically.
However, certain statutes have specified requirements for signature, for example, a transfer
certificate on an immovable property cannot be valid if the signature and/or thumb impression

18
Cavell Leitch, Electronic Contract-when has an agreement been reached, Cavell leitch law firm, avalaible at
https://cavell.co.nz/articles/2014/electronic-contracts-when-has-an-agreement-been-re, last seen on 12/02/2017.

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has not been attested to by the seller to the same. In another case, the Indian Copyright Act of
1957 calls for the customer to sign. The IT Act is thus a physical signature for electronic
signature. Competent authorities have to sign electronically in accordance with the IT Act, but
electronic signatures have not been notified by the central government.

ENFORCEABILITY OF E-CONTRACTS

However, the enforceability of internet contracts is questionable, if written agreements that were
signed and agreed are considered binding. While the internet is only emerging, the Internet
contracts are usually well governed by the principles laid down in writing.

Often, the user of the commercial website is requested to read and agree to the terms and
conditions of activities before purchasing or receiving the service provided by the site. The
agreements entered into in this way are referred to as the clickwrap agreements, as the user
normally specifies his agreement to the terms and conditions by clicking the button or the
hyperlink marked “I agree”.

Clickwrap agreements are usually implementable and browsewrap agreements are very difficult
to implement subject to traditional contractual principles. There are somewhere between
shrinkwrap agreements, although recent cases support their enforceability.19

Specific Exclusions

In particular, the IT Act 2000 excludes from electronic transactions the following documents:

 Negotiable Instruments
 Power of Attorney
 Trust Deed
 Will
 Sale Deed or Conveyance deed with respect to the immovable property of any
documents relating to any interest in an immovable property.
19
Law relating to computers Internet & E commerce-Nandan Kamath-2nd edn 2000.

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ADMISSIBILITY OF E-CONTRACTS AND E-SIGNATURES AS EVIDENCE

The Indian Evidence Act, 1872 (Evidence Act) was also appropriately amended to bring it in
consonance with the electronic methods of execution of documents introduced by the IT Act.
Under the Evidence Act, electronic records, electronic agreements and electronic contracts are
admissible in evidence. In this regard, the Supreme Court of India, in the case of State of Punjab
and Ors. vs. Amritsar Beverages Ltd. and Ors.20 had observed that Section 63 of the Evidence
Act includes the admissibility of computer outputs in various media like paper, optical or
magnetic forms. Further, the procedure for furnishing electronic documents as evidence is
provided under Section 65-B of the Evidence Act. As per Section 65-B of the Evidence Act, any
information contained in an electronic record produced by a computer in printed, stored or
copied from it shall be deemed to be a document and it can be admissible as evidence in any
proceeding without further proof of the original. But admissibility of the same is subject to
various conditions prescribed under section 65-B of the Evidence Act. Section 73A prescribes
procedures for verification of digital signatures.

Sections 85A and 85B of the Evidence Act raise a presumption as regards validity of digital
signatures in electronic contracts, secure status of electronic records and digital signature
certificates and digital signature certificates, unless contrary is proved.

20
AIR 2006 SC 2820.

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 DRAFT OF AN E-CNTRACT

Project Manager Contract

This Employment Contract is entered into on the 12th day of March, 2020, between Rajendra
Prasad Singh (hereinafter known as Employer), whose business is located at Kolar
Road,Bhopal, Madhya Pradesh[462041], and Shakti Sharma (hereinafter known as Project
Manager), who resides at Malviya Nagar, Bhopal, Madhya Pradesh[461421].

The Project Manager is responsible for overseeing an assigned project in its entirety. The Project
Manager agrees to coordinate efforts with internal and external parties to achieve project goals
when necessary. The Project Manager is expected to take ownership of the direction,
implementation, control and execution of the project and to provide overall direction for the
project.

Duties:
The specific duties for each project may include: creating a delivery strategy; assigning tasks to
other project members; coordinating the efforts of project team members; developing a
deliverables schedule; managing the project budget; tracking and monitoring project and team
deliverables; providing status updates to senior management and external stakeholders; defining
and securing needed resources; developing quality standards; and the presentation and evaluation
of final project results.

Performance Expectations:
The Project Manager agrees to faithfully perform all duties to the best of their abilities and
talents, and to adhere to the highest quality of work standards.

Confidentiality:
Certain information may be communicated to the Project Manager, including trade secrets,
proprietary and other confidential information.

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Shakti Sharma agrees to hold all information obtained in the normal course of business and
communicated to the project manager by the company, clients, suppliers or other third parties
confidential. The project manager may not disclose such information to any party inside or
outside of the company without the written permission of the company. The project manager
may not disclose, distribute or disseminate confidential information in any way.

Conflict of Interest:
The Project Manager agrees to give top priority to the interests of the company. The Project
Manager agrees not to engage in any activity that may be considered a conflict of interest,
including but not limited to working for a second employer in the same or like position at the
same time as working for the Employer named in this contract.

Compensation and Benefits:

The employee will be paid Monthly, at the salaried rate of 500₹ per pay period. The employee
understands he/she is salaried exempt and is not entitled to overtime wages.

The project manager will be entitled to a performance bonus in the amount of depending upon
the profit for projects completed ahead of schedule.

The Project Manager is entitled to the following benefits:

Insurance Benefits
Paid Holidays
Vacation
Sick Leave / Personal Days
Bonuses
Retirement Benefits

At Will Employment:
The employment agreement described in this contract is considered “at will.” The employment
arrangement may be terminated by either party, with or without cause, and with or without
notice.

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The Contract needs to be signed digitally.
Date: 12th March, 2020
Between:
Rajendra Prasad Singh (Employer)
Shakti Sharma (Employee – Project Manager)

CONCLUSION

The IT laws of India have gone a long way since the IT Act was introduced in 2000. However,
many aspects of an Online Contract, in particular, the requirements of signature and stamping,
remain uncertain and confused. The current trend of demonetizing and digitalization seems a
necessity, and we sincerely hope that the government would take appropriate action in that
regard, to eradicate all uncertainties in relation to the validity of e-contracts.

The COVID-19 situation has digitalized India to a large extent, including the Indian courts,
taking it to a new paradigm of paperless state of things. E-Contracts and E-Signature enable
people to continue their transactions and other commercial activities while also maintaining the
social distancing norms. However, payment of stamp duty as required under law continues to be
a point of contemplation and steps in this regard are now being actively taken by several state
governments by way of opening online portals for payment of stamp duty.

BIBLIOGRAPHY

1. https://www.manupatrafast.in/
2. www.scconline.com
3. Heinonline
4. Westlaw
5. Lexis Nexis

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