Problems Involved in Creation of Electronic Contracts

Question: Discuss about the Problems Involved in Creation of Electronic Contracts. Answer: Introduction: Any and all agreements which are created, executed and signed in electronic form, rather than using the traditional way of using paper or hard copies are essentially what is known as Electronic Contracts. In such cases, the contracts are created and modeled by a software system itself. There are essentially two types of Electronic Contracts which are prevalent in the market at present, they being - a) World Wide Web Contracts and b) E-Mail Contracts. In general terms, such contracts are executed in a very similar way as traditional contracts themselves, where the vendor usually puts up his or her goods for sale, along with the prices of such goods to the prospective buyers in electronic form, the prospective buyer goes through the terms and conditions and if willing, declares his intention to buy them by making the payment for it. Once the payment has been made, the goods are delivered to the buyer by the seller. However, due to the fact that these contracts are generally concluded online, in the absence of hard copies as contracts, certain problems may and does crop up, sometimes. Problems Associated with Electronic Contracts: Some of the problems which are generally associated with execution of Contracts in electronic Forms are: Safety Issues: There is always a looming possibility while using E-Contarcts, that a consumer might provide his signature in an unsecured form, such as scanning an image of his original signature and uploading it online, which might be used by hackers for unethical and fraudulent purposes. Evidentiary Value: In certain situation, to be admissible as evidence, Contracts needs to be signed as well as stamped. However, more often than not, E-Contacts does not have the provisions of being signed and this results in their evidentiary value lowering in the court of law. No Chance of Negotiation: In E-Contracts, there is a very little scope for the willing buyer to negotiate the terms of the contract. Especially in cases of Shrink wrap contracts or click wrap contracts, where a purchaser, gives his assent by clicking on the I Do or the I Agree tab, the buyer has no opportunity to put forth his terms and conditions and generally has to accept whatever the buyer wants to impose on him .Moreover, with regards to section 16 of the Indian Contracts Act 1872, this kind of situation might open up the flood gates for litigations involving the concept of Undue Influence as well. Governing Law or Jurisdiction of the Court: With regards to E-Contract, there is always a possibility of dispute with regards to the jurisdiction of the court for settling such disputes. In the case of R.Transport Agency Vs. Union of India and others (AIR 2006 All 23), the jurisdiction of court in settling a dispute with regards to E Contracts came to the fore. In that case, P.R. Transport Agencys (PRTA) bid for around 4000 metric tonnes of coal was accepted in the bidding process established by Bharat Coking Coal Ltd (BCA). In lieu of such acceptance, an email was sent to the bidding company, initiating them of the acceptance of the bid. Consequently, P.R. Transport Agency, provided a check amounting to Rs.81 lakhs to Bharat Coking Coal ltd, which was accepted and encashed as well. However, on the date of delivery, BCA failed to deliver the required amount of coal to PRTA, and instead mailed them about the sale and bid being cancelled due to certain technical reasons. PRTA, as such decided to bring a claim against BCA and approached the Allahabad High Court for the same. BCA in turn challenged the Allahabad high courts jurisdiction. The Court, while deciding the matter with regards to the jurisdiction of the court in cases of electronic contracts, held that in case of contracts concluded by emails, the data of the email can be dispersed from anywhere in the world, after which it needs to fed in the memory of the server which can be located anywhere in the world, followed by acceptance of such data by the addressee account holder from any part of the world. As such, in these types of cases, there is no fixed point for transmission or acceptance and thus the matter is really problematic. Contracts which only be concluded when they are in Hard Copy: There are certain contracts which can only be concluded in the hard form and their electronic form is not acceptable. Some of these types of contracts are Wills, Adoption Papers, Court Notices etc. Conclusion: The above are the certain problems which are associated with E-Contracts and are needed to be dealt with, before such electronic contracts can fully replace the traditional paper ones. Reference List: Academia.edu. (2016).E Contracts and Issues Involved. [online] Available at: https://www.academia.edu/8719077/E_Contracts_and_Issues_Involved [Accessed 16 Sep. 2016]. Ayres, I., 2012.Studies in Contract Law. Foundation Press. Burton, S.J., 2012. Principles of contract law. Cartwright, J., 2016.Contract law: An introduction to the English law of contract for the civil lawyer. Bloomsbury Publishing. Hunter, H., 2015. Modern Law of Contracts. Jain, S., 2016. Electronic Contracts: Nature, Types and Legal Challenges.Types and Legal Challenges (May 26, 2016). Legalserviceindia.com. (2016).E-contracts and issues involved in its formation. 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