The advent of the digital age has revolutionized the way individuals and organizations conduct business. Among the most significant changes is the emergence of electronic contracts or e-contracts. An e-contract is a legally binding agreement created and signed electronically without the need for physical documentation. With the growth of e-commerce, e-contracts have become indispensable in facilitating transactions across borders, industries, and platforms. However, the increasing reliance on e-contracts has also raised legal and regulatory challenges that require robust frameworks to ensure fairness, security, and enforceability.
 

Definition And Types Of E-Contracts

The Indian Contract Act, 1872 defines contract as an agreement between two or more parties which is enforceble by law. (1) The essentials to a valid contract are also some of the essentials to an e-contract which are:

• An offer and acceptance has to be made.
• There should be a lawful consideration.
• There should be a free consent between the parties to a contract.
• The object of the agreement should be lawful.
• Parties must be competent enough to contract.
• The contract must be enforceable by law.

An e-contract is an agreement made using electronic means, such as emails, online forms, or electronic signatures. According to Sir William Anson definition of E-contracts is; "A contract is a legally binding agreement executed between two parties or more than two parties by which rights are acquired by one or more acts of forbearances on the part of the other party or parties." The common types of e-contracts include:

1. Clickwrap Agreements: Clickwrap agreements require users to explicitly click a button (e.g., "I Agree" or "Accept") to confirm their acceptance of terms and conditions. Commonly used for software installations, online services, mobile apps, and website terms of service, these agreements are also called Click-Through Agreements. Courts generally uphold their validity as long as the terms are clear and users had a reasonable opportunity to review them.
   
   In Rudder v. Microsoft Corporation (2), the Ontario Superior Court had determined that the "click-wrap" agreement was enforceable, by ruling that scrolling across multiple pages was to be presumed to be the same as turning through multiple pages of a written contract in the paper. Thus, digital contracts were given a dignified position through this decades-old case.
    
2. Browsewrap Agreements: Browsewrap agreements are embedded in websites and do not require explicit consent from users. Instead, they are typically linked at the bottom of webpages (e.g., "By using this site, you agree to our Terms of Service"). Users often do not read the terms before using the website. Courts are less favorable toward browsewrap agreements due to the lack of clear affirmative consent, and enforceability depends on whether users had actual or constructive knowledge of the terms.
    
3. Shrinkwrap Agreements: Shrinkwrap agreements involve terms packaged with a product, which users accept by opening the packaging or using the product. Common in the software industry, these agreements often appear in End User License Agreements (EULAs). Courts generally enforce shrinkwrap agreements, particularly for software licenses, unless users were unaware of the terms before purchasing or using the product.
    
4. E-Mail Contracts: E-mail contracts are formed through exchanges between parties via electronic mail, often used in business transactions and informal agreements. They are legally binding if they meet the requirements of offer, acceptance, and consideration. In India, such contracts fall under the Indian Contract Act, 1872, and the Information Technology Act, 2000. Courts uphold these contracts when there is clear intent and mutual agreement.
    
5. Scroll Wrap Agreements: Scroll wrap agreements require users to scroll through the entire agreement before accessing a service. Scrolling is considered as consent, but users retain the option to reject the terms after reading them. This type ensures users have reviewed the terms before accepting them.
    
6. Web-Based Contracts: Web-based contracts are created and executed on website platforms, often as part of user registration or purchase processes. These contracts are generally enforceable if users affirmatively agree to the terms (e.g., clicking a checkbox or button). Courts assess their validity based on clarity of presentation and whether users had a fair opportunity to review the terms.

Recognition Of E-Contracts

Globally, the United Nations' UNCITRAL Model Law on Electronic Commerce (1996) and the Electronic Communications Convention (2005) provide a foundation for harmonizing laws related to e-contracts. The E-SIGN Act (2000) in the U.S. and the Electronic Identification and Trust Services (eIDAS) regulation in the EU are significant regional frameworks.
 
In India, Section 10 A of the Information Technology Act, 2000 (3)  gives legislative authority to E contracts. It says that, "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 record, such contract shall not be deemed to be unenforceable solely on the ground that such electronic form or means was used for that purpose." (4)
 
It is important to note here that Section 2(r) of the Information Technology Act, 2000, contains the definition of 'electronic form'. Electronic form means any information sent, generated, received/ stored in media, computer memory, magnetic, microfilm, optical, computer generated micro fiche, or similar device.
 
In the case of Tamil Nadu Organic Private Ltd v. State Bank of India (5) and Trimex International FZE Ltd., Dubai v. Vedanta Aluminium Ltd. (6), Indian courts enforces the e-Contracts and define them as valid contracts.
  
For any contract to be valid, signatures from both the parties are required. In the case of an e-contract, an electronic signature comes to play. (7) An electronic signature is defined by the Information Technology Act, 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'.

Further, 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. Electronic signature serves the same purpose as a handwritten signature. Section 87 of The Bharatiya Sakshya Adhiniyam, 2023 (7) states that as far as a digital signature is concerned, the courts presume that the information provided in that certificate is true and correct.

E contracts are contracts that are not paper based and are electronic in nature. These contracts are generally made for speedy entering into a contract or for the convenience of the parties. They are best made between parties who live in 2 different parts of the world and have to enter into an agreement. A digital signature is all they need to enter into a contract as a party even though both the parties to the contract are sitting miles away from each other. In this proliferating world, it is the most convenient method to enter into a contract without being physically exhausted. 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. (9) (In the present context, the person who initiates the process of making an e-contract to send it to the other party.)

lAn 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. (10) (In the present context, the party which receives the e-contract made by the other party.)

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 (11) 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.

In the case of Trimex International FZE Ltd., Dubai v. Vedanta Aluminium Ltd. (12), the Supreme Court has held that even without there being the execution of the formal contract, the electronic communications constitute a legally enforceable agreement provided the contract satisfies the requirements of the Indian Contract Act.
 
Conclusion
E-contracts represent a pivotal advancement in the realm of commerce and legal agreements. While they offer unparalleled efficiency and accessibility, their implementation must be complemented by comprehensive legal safeguards to address security, privacy, and jurisdictional issues. As technology evolves, so must the legal frameworks to ensure that e-contracts remain a robust and reliable tool for modern transactions. Encouraging awareness and adoption of these regulations will pave the way for a secure and thriving digital economy.

Footnotes

• The Indian Contract Act, 1872 (Act 9 of 1872), s. 2(h)
• [1999] OJ No 3778 (Sup Ct J)
• The Information Technology Act, 2000 (Act 21 of 2000), s. 10A
• Inserted by Information Technology (Amdt.) Act, 2008 (Act 10 of 2009), w.e.f. 27-10-2009.
• AIR 2014 Mad 103
• 2010 (1) SCALE 574
• Dr. Ishita Chatterjee, Law on Information Technology, 5 - 7, (Central Law Publications, Prayagraj, 3rd edn., 2022)
• The Bharatiya Sakshya Adhiniyam, 2023 (Act 47 of 2023), s. 87
• The Information Technology Act, 2000 (Act 21 of 2000), s. 2(za)
• The Information Technology Act, 2000 (Act 21 of 2000), s. 2(b)
• 2006 (33) PTC 469 (Del)
• 2010 (1) SCALE 574

Bibliography

• Dr. Ishita Chatterjee, Law on Information Technology, 5 - 7, (Central Law Publications, Prayagraj, 3rd edn., 2022)
• The Information Technology Act, 2000 (Act 21 of 2000)
• The Indian Contract Act, 1872 (Act 9 of 1872), s. 2(h)
• The Indian Evidence Act, 1872 (Act 1 of 1872), ss. 65 A, 65 B
• The Bharatiya Sakshya Adhiniyam, 2023 (Act 47 of 2023), s. 87
• E-Contracts in Cyber Law, available at: https://ssrn.com/abstract=4923845 (last visited on January 03, 2025)
• E-Contracts, available at: https://www.indianbarassociation.org/e-contracts/ (last visited on January 03, 2025)
• Information Technology Act 2000, India, available at: https://www.indiacode.nic.in/handle/123456789/1999 (last visited on January 03, 2025)