Are E-contracts valid

Electronic Contracts and Electronic Signatures have transformed the picture of modern business and especially during pandemic and are becoming very popular as per day to day business needs.

Meaning:

E-Contracts means the contracts which are not paper based but in electronic form. In today’s digital era, any transaction or deal can be agreed within seconds with the help and aid of e-contracts.

Basically, an agreement is a contract between 2 parties that is enforceable by law in a written format and signed by both parties. However, there is no such stipulation in Indian Contract Act which mentions that an agreement shall always be in written format or signed by the parties.

Admissibility of E-Contracts:

Section 65 (b) of Indian Evidence Act and Information Technology Act 2000 has made e-contracts admissible as evidence. Various other sections such section 3, 85,88, and 90 deal solely with electronic records.

Section 3 when read with Section 65A and 65 B of Indian Evidence Act explicitly considers the electronic records as admissible evidence.

Section 85A and Section 85B talks about the legal validity of electronic records.

Legal Elements:

• Offer:  An offer by one party to another for the performance of service   
• Acceptance:The offer is accepted by the other party.
• Promise: A promise to perform the action that has been accepted.
• Consideration: Monetary value in lieu of the product or service given.
• Capacity: Whether or not the Parties are capable of understanding the terms of the deal. 
• Legality: Subject matter of the contract is legal.

Judicial Decisions:

In the Landmark case of  Arjun Panditrao Khotkar V. Kailas Kushanrao Gorantyal & Ors. It was held that, Section 65A and Section 65B of Indian Evidence Act ascertains the validity of the document. It mentions proof and enforceability of electronic records.

In the State of Punjab & Ors. V. Amritsar Beverages Ltd. & Ors. Section 63 of Indian Evidence Act has been highlighted which recognises electronic documents as evidence in the same manner as provided under section 65B.

Thus, Indian Laws are not reluctant to new visions of e-contracts and even Indian courts have always upheld the validity of e-contracts provided they satisfy the legal requisites of contract laws.

However, many particular requirements such as signature, stamping remain uncertain in such scenarios. 

It is quite evident that with the new era of digitisation people will take this at ease and our Indian laws have already made the settled laws for the same.

You can contact experts from Lead India for legal advice and ask a free question also to resolve any of your query.