Electronic contracts & the Indian law

December 4, 2010, by | Start Discussion


Chapter IV of the Information Technology Act, 2000 (amendment of 2008) contains Sections 10, 11, 12 and 13 which talks about Legal Recognition to Electronic Contracts, Attribution, Acknowledgment and Dispatch of Electronic Records.

Section 10A of the IT Act, 2000 provides that, a communication or contract shouldn’t be denied or declared void merely because it’s in electronic form. i.e. Every electronic contract has legal recognition same as traditional paper based contract.

 

This Section is based on the United Nation’s Convention on the use of Electronic Communications in International Contracts.

Section 11:-

Attribution of electronic records”,

An electronic record shall be attributed to the originator—

  1. if it was sent by the originator himself;

  2. by a person who had the authority to act on behalf of the originator in respect of that electronic record; or

  3. by an information system programmed by or on behalf of the originator to operate automatically.

 

Here, “Originator” means (Sec. 2(1) (za)):-

“A person who sends, generates, stores or transmits any electronic message or causes any electronic message to be sent, generated, stored or transmitted to any other person”

Originator doesn’t include “Intermediary”.

Example:-

Vivek uses his yahoo account to send an email to Rohit.

Here, Vivek is the originator & Yahoo is the intermediary.

Example:-

Vivek is on vacation. During vacation he has turned his vacation responder on with the following message:-

“Thank you for your email. I am on vacation, will reply your mail as soon I get back”.

Here, though Vivek has programmed an information system to operate automatically on his behalf. Still Vivek is the “originator” in this case.

Section 12:-

Acknowledgement of receipt”

  1. Where the originator has not agreed with the addressee that the acknowledgment of receipt of electronic record be given in a particular form or by a particular method, an acknowledgment may be given by—

  1. any communication by the addressee, automated or otherwise; or

  2. any conduct of the addressee, sufficient to indicate to the originator that the electronic record has been received.

Here, Addressee means (Sec. 2 (1) (b)):-

“A person who is intended by the originator to receive the electronic record but does not include any intermediary”.

Example:-

Vivek uses his yahoo account to send an email to Rohit.

Here, Vivek is originator, Yahoo is intermediary & Rohit is addressee.

Example:-

Rohit sends an email to Pooja asking her that he would like to purchase a car and would like to know the prices of the cars available for sale. Pooja in return sends Rohit a catalogue of prices of the cars available for sale.

Now this action of Pooja is sufficient to indicate to Rohit (the originator) that his email (i.e. the electronic record) has been received by the addressee (i.e. Pooja).

  1. Where the originator has stipulated that the electronic record shall be binding only on receipt of an acknowledgment of such electronic record by him, then unless acknowledgment has been so received, the electronic record shall be deemed to have been never sent by the originator.

  1. Where the originator has not stipulated that the electronic record shall be binding only on receipt of such acknowledgment, and the acknowledgment has not been received by the originator within the specified time or reasonable time, then the originator may give notice to the addressee stating that no acknowledgment has been received by him and specifying a reasonable time by which the acknowledgment must be received by him. Now if no acknowledgment is received within the aforesaid time limit he may after giving notice to the addressee, treat the electronic record as though it has never been sent.

Sec. 13:-

Time and place of dispatch and receipt of electronic record

(1) Save as otherwise agreed to between the originator and the addressee, the dispatch of an electronic record occurs when it enters a computer resource outside the control of the originator.

Example:-

Pooja composes a message for Rohit. At exactly 12.00 noon she presses the “Send” button. When she does that the message leaves her computer and begins its journey across the Internet. It is now no longer in Pooja’s control. The time of dispatch of this message will be 12.00 noon.

(2) Save as otherwise agreed between the originator and the addressee, the time of receipt of an electronic record shall be determined as follows, namely:—

  1. if the addressee has designated a computer resource for the purpose of receiving electronic records,—

(i) receipt occurs at the time when the electronic record enters the designated computer resource; or

(ii) if the electronic record is sent to a computer resource of the addressee that is not the designated computer resource, receipt occurs at the time when the electronic record is retrieved by the addressee;

(b) if the addressee has not designated a computer resource along with the specified timings, if any, receipt occurs when the electronic record enters the computer resource of the addressee.

(3) Save as otherwise agreed to between the originator and the addressee, an electronic record is deemed to be dispatched at the place where the originator has his place of business, and is deemed to be received at the place where the addressee has his place of business.

  1. The provisions of sub-section (2) shall apply notwithstanding that the place where the computer resource is located may be different from the place where the electronic record is deemed to have been received under sub-section (3).

Example:-

Rohit has entered into contract with a US based company. Company has its server in Brazil. Even if the company has its mail server located physically in Brazil, the place of receipt of the order would be the company’s office in USA.

  1. For the purposes of this section,—

(a) if the originator or the addressee has more than one place of business, the principal place of business, shall be the place of business;

(b) if the originator or the addressee does not have a place of business, his usual place of residence shall be deemed to be the place of business;

(c) "usual place of residence", in relation to a body corporate, means the place where it is registered.


Sagar is a Law graduate. He is Head at Asian School of Cyber Laws(Maharashtra). He specializes in Cyber Law, Intellectual Property Law and Corporate Law. He teaches at numerous educational institutions across India.

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