Contract is consist of two things that it should fulfil the conditions of agreement [S. 2(E)] and should be enforceable by law [S. 10]. In today's world the Technology has had a huge impact on society. We've been seeing a lot of new tech developments that have changed our lives and will continue to do so. The snail-paced communication systems of the past have been replaced by new communication systems, particularly digital technology.

One of the segment in Contracts also deals with technological Advances known as E- Contracts. E-contracts have played a major role in this technological world. Electronic contracts are the perfect solution for businesses that want to get their work done quickly, easily, and efficiently. Two such types of E-Contracts that have gained prominence in the software industry are "Shrink Wrap Contracts" and "Click-Wrap Contracts." The law already allows for contract-making using fax, telex, and other similar technologies.

Research Questions

• What are E-Contracts? Define their importance and prominent E-contracts named click-wrap contract and shrink-wrap contract?
• To check the enforceability and exceptions of Click-wrap contracts and shrink-wrap contracts.
   

E-Contracts

Basically, e-contracts are contracts that are made electronically. It's the latest electronic way to make it easier for businesses to trade with each other. Basically, it's a contract that's fully or partially made online. In theory, it's a lot like a paper contract. For example:

• A vendor presents their product/service, price, and terms to potential buyers.
• The buyer considers their options, negotiates prices and terms.
• Orders are placed and payments are made.
• The vendor delivers the product/service to the buyer (either right away or later).

According to the name, it's an electronic contract that's made completely or partially online. Electronic contracts are both fully and partially enforceable. For instance:

• 'X' makes an offer (writes it on his computer) and sends it to 'Y', who then sends it back (with an electronic signature) indicating acceptance of the offer.
• These email exchanges give rise to an electronic contract.
• An e-contract may also take the form of a 'click to agree' contract, commonly used when downloading software.
   

What Is Click-Wrap Contract?

Click-wrap contracts refer to the process of accepting contract terms when accessing an online service or software. A Click-Wrap agreement is an electronic contract in which a party agrees to terms and conditions after going through a website or programme. Usually, the party signs the agreement by:

• Clicking on an 'I Agree' icon or declining the agreement by clicking 'I Disagree'.
• The agreement is usually signed before the goods are received.

This type of contract is widely used online for:

• Granting a license to access a website.
• Downloading software.
• Selling something through a website.

As seen in the case of Hotmail Corporation vs. Van $ Money Pie Inc, the court determined that terms of service contracts in click-wrap format could be legally enforced. This was a landmark case establishing the validity of click-wrap contracts.

Types of Click-Wrap Agreements:

• Type and Click: You need to type 'I accept' or other specified words into the on-screen box, then click a 'Submit' button to confirm acceptance.
• Icon Clicking: You cannot proceed without clicking an 'OK' or 'I agree' button on a dialog box or pop-up window. Rejection can be signified by clicking 'Cancel' or closing the window/application.

Enforceability of Click-Wrap Agreements:

The first issue to be addressed is whether the content of a web page or e-mail constitutes an online offer. It is important to note that the offer must be:

• Created with the intent of making a legally binding agreement.
• Definite and complete.
• A clear indication of the offeror's intentions.

Exceptions of click-wrap contract
Click-wrap Contract Exemptions under Indian Contract Act are:

• Minors and Persons with Limited Capacity: Contracts concluded with a minor or a person who is unable to contract (such as a mentally disabled person) are usually void at the discretion of the child or the person.
• Illegality: If the terms of the click-wrap contract involve illegal activities or violate any laws, they may not be upheld in court.

What Is Shrink-Wrap Contract?
Shrink wrap contracts derive their name from the practice of software vendors packaging their products in shrink wrap. If you're buying software in a store, by mail, or online, you're probably familiar with shrink-wrap contracts.

For example, software is usually packed in a box or container and then wrapped in plastic. On the box, you'll see a warning that says the license agreement is inside. If you don't want to sign a contract by buying the software, you'll need to return it before opening the sealed package with the CD on it. If you return the software with the box unopened, you'll get a refund. But if you open the box with the CD inside, you're agreeing to the terms of the deal and won't be able to get a refund.

However, If you can't print the full license terms on the outside of the box, like in the manual or on the screen every time you run the program, then a shrink license is only valid if you have the right to return it (and get a refund) if the terms are too bad for you. But you have to do it within a certain amount of time.

That's why these licenses are called shrink wrap licenses. They come from the shrink-wrapped packaging that usually holds the software, like a CD Rom. The license terms are printed on the cover of the CD, and you have to go through the same process to open the CD Rom.

In some cases, additional terms are also included in such licenses. These terms are only shown on the screen when you open the CD on your computer. In the packaging, it is stated that by opening the shrink-wrapped package, you accept the software terms included in the package. You always have the option to return the software if you don't like the new terms for a complete refund. In software application contexts, a typical shrink-wrapped software license is a contract between a seller and a buyer in which the seller dictates the terms of the software license to the buyer.

The terms of the license include: A clear notice of agreement Title retention by the seller Restricted transfer and modification.

• As seen in the case of CompuServe Inc vs. Patterson:
  • Whether the home state of an internet service provider can exercise jurisdiction over an out-of-state software author who subscribes to the internet service provider and receives a commission for software sold through the internet service provider.
  • The court ruled that a state can have jurisdiction over a software author who sells his software via an internet service provider based in the forum state.
     
• Enforceability of shrink-wrap agreement:
  • The shrink-wrap terms and conditions printed on the packaging represent an offer from the copyright proprietor of the computer program to a potential purchaser.
  • In a Canadian incident, a computer program had been sold in shrink-wrapped packaging, however, no copyright notices or licence agreements were visible upon opening the package.
     
• Exceptions of click-wrap contract:
  • Without a conscience: The Indian Contract Act states that shrink-wrap contracts that have terms that are "grossly unfair, unilateral, or oppressive" are considered "unconscionable" and can't be enforced.
  • Notice of Terms: If the terms aren't clearly stated on the product packaging or made available to the purchaser prior to purchase, it can cause problems in terms of contract enforcement.

Conclusion
As we see in analysis, in this technological world how much E-contracts are essential for our day today life. An e-contract can be legally enforceable if the parties communicate their agreement via electronic means, such as email or electronic signatures. These contracts can be fully or partially conducted online. Click-wrap contracts are electronic agreements where a party agrees to terms and conditions while accessing an online service or software. Shrink wrap agreements are contractual arrangements commonly used to sell software products. The term originates from the practice of package software in shrink wrap.

References:

• R.K. Singh, Law Relating to Electronic Contracts, at 132 (LexisNexis 2014).
• Hotmail, https://cyber.harvard.edu/ilaw/Contract/hotmail.html (last visited Dec. 16, 2024).
• ISSN 1021-7061, 81 HeinOnline, https://heinonline.org/HOL (last visited Dec. 16, 2024).
• 133 R.K. Singh, Law Relating to Electronic Contracts, LexisNexis 2014, cited in St. Louis L.J., https://heinonline.org/HOL/LandingPage?handle=hein.journals/stlulj41&div=56&id=&page= (last visited Dec. 16, 2024).
• Indian Contract Act, 1872, Bare Act, at 87 (LexisNexis 2023).