E Notes L&T Unit 2

Chanderprabhu Jain College of Higher Studies
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School of Law
An ISO 9001:2015 Certified Quality Institute
(Recognized by Govt. of NCT of Delhi, Affiliated to GGS Indraprastha University, Delhi)
E-Notes
Class : B.A.LL.B/ BBA LL.B (VII SEMESTER)
Paper Code : LLB 405
Subject : LAW & EMERGING TECHNOLOGY
Faculty Name : Ms. KIFFI AGGARWAL
UNIT-II
E-COMMERCE
A. MODEL LAW OF E-COMMERCE
In today’s world, a large number of international trade transactions are carried out by electronic
data interchange and other means of communication, commonly known as “electronic
commerce”. It uses alternatives to paper-based methods of communication and storage of
information. The United Nations Commission on International Trade Law (UNCITRAL), by the
means of Model Law on Electronic Commerce (MLEC), sought to provide a set of
internationally acceptable rules with an aim to remove legal obstacles and increase legal
predictability for e-commerce. It has further improved the efficiency in international trade by
providing equal treatment to paper based and electronic information, thus enabling the use of
paperless communication.
The model law is not a comprehensive, code-like articulation of the rules for the electronic
transactions. It does not intend to govern every aspect of electronic contracting. It adopts a
limited framework approach and enables and facilitates e-commerce. It has adopted the
following fundamental principles of the modern electronic-commerce law:
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The principle of non-discrimination – It ensures that any document would not be denied legal
validity, effect, and enforceability solely on the basis that it is in electronic form.
The principle of technological neutrality – It mandates the adoption of such provisions which are
neutral with respect to technology used. This aims at accommodating any future developments
without any further legislative work.
The functional equivalence principle – It sets out the specific requirements that e-communication
ought to meet in order to fulfill the same functions that certain notions, in traditional paper based
system, seek to achieve, for example, “writing”, “original”, “signed”, and “record”.
All the states have given favorable consideration to the model law while enacting or revising
their laws so that uniformity of the law applicable to the alternatives to the paper-based methods
of communication is facilitated. This article deals with a brief history and key provisions of the
Model Law of E-commerce to better understand the objectives of MLEC and how they are
achieved.
Purpose
The Model Law on Electronic Commerce (MLEC) purports to enable and facilitate commerce
conducted using electronic means by providing national legislators with a set of internationally
acceptable rules aimed at removing legal obstacles and increasing legal predictability for
electronic commerce. In particular, it is intended to overcome obstacles arising from statutory
provisions that may not be varied contractually by providing equal treatment to paper-based and
electronic information. Such equal treatment is essential for enabling the use of paperless
communication, thus fostering efficiency in international trade.
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Key Provisions
General Provisions
Article 2 of the Law provides six definitions, the most important one is of “Data message”. It is
defined as information generated, sent, received, or stored by electronic, optical, or similar
means. This definition has been attributed after taking into consideration the future technological
developments as well, which is the reason for inclusion of the term similar means. This wide
definition includes the notion of a record and even revocation and amendment. The sphere of
application that Article 1 talks about, is for the information in the form of data messages, in the
context of commercial activities.
The Model Laws give the interpretational tools (Article 3) which call for a standard of
international origin and uniformity in application of general principles of law. There can be
variation in the communication of data messages by the agreement of the parties (Article 4).
Application of legal requirement to data messages
The principle of non-discrimination has been enforced by the means of Article 5 which specifies
that the information communicated via electronic mode, i.e., in the form of data messages cannot
be denied legal validity and effect. Information by the way of reference has also been given legal
validity (Article 5) and thus, the application of this law has been considerably widened. This is of
utmost importance in the context of international law.
The nations required the documents to be in writing and validation was only given to the hand
written signature as a form of authentication. By the means of provisions in Articles 6 & 7, the
Model has done away with both of the above obstacles. Accessibility of data messages does not
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require the document to be in writing, and recognition of digital signature marks the approval of
the full structure of the contract. This provision is termed relevant for every circumstance
including a relevant agreement.
The notion of originality is defined in Article 8 which provides that data messages can fulfill the
legal requirement of presentation and retention of information in its original form subject to the
assurance of integrity and present ability of data messages. Present ability meaning the ability to
display the information where required. Article 9 specifies that the data messages cannot be
denied admissibility in the court of law solely on the basis that the information is in the form of a
data message. Thus, evidentiary value has been granted to data messages. The requirement of
retention of information is also met by retention of information in the form of data messages
subject to the accessibility, accuracy and originality of format and identity of origin (Article 10).
Communication of data messages
 Offer and acceptance of offer, when communicated in the form of data messages, cannot
be denied legal validity and enforceability solely on the grounds that they are in the form
of data messages. Thus, the formation of a valid contract was made possible through the
means of data messages. (Article 11)
 Acknowledgement in the form of receipt of data messages has also been granted legal
validity. (Article 12)
 The data message is attributed to the originator if it is sent by him or by a person

authorized by him (Article 13).
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 Article 14 provides that the receipt of the data message and its acknowledgement can also
be agreed upon by the parties beforehand. The transaction ensues when the information
goes out of control of the sender.
 The place of dispatch is the place of business and the time is when the acceptance enters
the system of the addressee (Article 15).
Specific provisions
Articles 16 & 17 talk about carriage of goods and transport documents. They enforce the ability
to achieve carriage of goods by the means of data messages and fulfillment of the requirement of
transport documents through the same as well. It is imperative for the objective of furtherance of
international trade. This part has been complemented by other legislative texts such as the
Rotterdam Rules and it may be the object of additional work of UNCITRAL in the future.
Implementation & Judicial Interpretations across the globe
The Model Law of Electronic Commerce was adopted to facilitate the international trade through
electronic modes of communication. It aimed at encouraging national legislators to adopt a set of
internationally acceptable rules regulating e-commerce. Thus, Model Law is accompanied with a
guide which provides background and explanatory information to assist the states in preparing
the necessary legislative provisions.
Different states enacted laws based on the principles of this Model Law. Thus, the courts have
interpreted the provisions of their domestic laws according to the Model Law.
Khoury v. Tomlinson is a landmark case decided by the Texas Court of Appeal. The facts of
this case are such that an agreement was entered via e-mail which was not signed but only the
name of the originator appeared in the ‘from’ section. Referring to the principles in Article 7 of
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the Model Law, the court found sufficient evidence that the name in the ‘from’ section
establishes the identity of the sender.
Chwee Kin Keong and others is a case dealt with by the Singapore High Court. There was the
issue of unilateral mistake in this case as the wrong price was quoted on the seller’s website for a
product. The server of the seller automatically sent a confirmation mail when the buyers placed
an order. All the elements of the contract were established but with a mistake which eliminated
consensus ad idem. Referring to the Singapore Electronic Transactions Act based on Model
Laws, the court found that human errors, system errors, and transmission errors could vitiate a
contract.
Martha Helena Pilonieta v Gabriel Humberto Pulido Casas is a case dealt with by the
Supreme Court of Justice of Columbia. The court found that the electronic message by a spouse
was not relevant on the ground of evidential thresholds.
Thus, the Model Laws became the basis for a number of legislative texts enacted by various
governments across the globe and it gave a uniformity to the laws concerning the information
communicated by the electronic mode of communication.
B. ONLINE CONTRACT
With the advance use of internet and electronic commerce, online contracts have assumed
importance mainly in terms of reach and multiplicity. Online contract or an electronic contract is
an agreement modelled, signed and executed electronically, usually over internet. An Online
contract is conceptually very similar and is drafted in the same manner in which a traditional
paper-based contract is drafted. In case of an online contract, the seller who intends to sell their
products, present their products, prices and terms for buying such products to the prospective
buyers. In turn, the buyers who are interested in buying the products either consider or click on
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the ‘I Agree’ or ‘Click to Agree’ option for indicating the acceptance of the terms presented by
the seller or they can sign electronically. Electronic signatures can be done in different ways like
typing the name of the signer’s in the specific signature space, copying and pasting the scanned
version of the signature or clicking an option meant for that purpose. Once the terms are
accepted and the payment is made, the transaction can be completed. The communication is
basically made between two computers through servers. The online contract is brought to the
scenario to help people in the way of formulating and implementing policies of commercial
contracts within business directed over internet. Online Contract is modelled for the sale,
purchase and supply of products and services to both consumers and business associates.
Online can be categorized into three types mainly i.e. browse or web wrap contracts, shrink wrap
contracts and click wrap contracts. Other kinds of online contracts include employment contract,
contractor agreement, consultant agreement, Sale re-sale and distributor agreements, non-
disclosure agreements, software development and licensing agreements, source code escrow
agreements. Though these online contracts are witnessed in our everyday life, most of us are not
aware of the legal complexities connected to it; the use of online contract faces many technical
and legal challenges.
Types of Online Contract
Online contracts can be of three types mainly i.e. shrink-wrap agreements, click or web-wrap
agreements and browse-wrap agreements. In our everyday life, we usually witness these types of
online contracts. Other types of online contracts include employment contract, contractor
agreement, consultant agreement, Sale re-sale and distributor agreements, non-disclosure
agreements, software development and licensing agreements, source code escrow agreements.
Shrink-wrap agreements are usually the licensed agreement applicable in case of software
products buying. In case of shrink-wrap agreements, with opening of the packaging of the
software product, the terms and conditions to access such software product are enforced upon the
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person who buys it. Shrink-wrap agreements are simply those which are accepted by user at the
time of installation of software from a CD-ROM, for example, Nokia pc-suite. Sometimes
additional terms can be observed only after loading the product on the computer and then if the
buyer does not agree to those additional terms, then he has an option of returning the software
product. As soon as the purchaser tears the packaging or the cover for accessing the software
product, shrink-wrap agreement gives protection by indemnifying the manufacturer of the
product for any copyright or intellectual property rights violation. Though, in India, there is no
stable judicial decision or precedent on the validity of shrink-wrap agreements.
Click- wrap agreements are web based agreements which require the assent or consent of the
user by way of clicking “I Agree’ or “I Accept” or “Ok” button on the dialog box. In click –wrap
agreements, the user basically have to agree to the terms and conditions for usage of the
particular software. Users who disagree to the terms and conditions will not be able to use or buy
the product upon cancellation or rejection. A person witnesses web-wrap agreements almost
regularly. The terms and conditions for usage are exposed to the users prior to acceptance. For
agreement of an online shopping site etc.
An agreement made intended to be binding on two or more parties by the use of website can be
called a browse wrap agreement. In case of browse wrap agreement, a regular user of a particular
website deemed to accept the terms of use and other policies of the website for continuous use.
Though these online contracts have become common in our daily, there are no precise judicial
precedents on the validity and enforceability of shrink-wrap and click-wrap agreements. Other
countries have dealt with these online agreements such as courts in the United States have held
that as far as the general principles of contract are not violated, both shrink-wrap agreements and
click- wrap agreements are enforceable.
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Essential Elements of Online Contract

The essential elements of online contract are discussed below:
Offer – Just like paper made or conventional contract, one of the most essential elements of
online contract is the requirement of an offer to be made. There must be a lawful proposal or
offer made by one party known as the proposer and it is the starting point of a contract. By
browsing and choosing the goods and services available on the website of the seller, the
consumer makes an offer to purchase such in relation with the invitation to offer made by the
seller. A proposal must be distinguished from the invitation to offer or treat and must be made
with an intention to create legal relationship. An offer or proposal is revocable and can be
withdrawn at any time before it is accepted because once it is accepted by the other party, it
becomes a promise.
Acceptance – When a proposal or offer is made is accepted by the person to whom the offer is
made, it becomes a promise. The acceptance of the proposal must be unconditional and absolute
and must be communicated to the proposer or the offeror. In case of an online contract, offer and
acceptance can be made through e-mails or by filing requisite form provided in the website. They
may also need to take an online agreement by clicking on ‘I Agree’ or ‘I Accept’ for availing the
services offered.
Intention to create legal relationship – If there is no intention of creating legal relationship on
the part of the parties to contract, there is no contract between them. It is an essential element of
valid contract that parties to the contract must have intention to create legal relationships. The
intention of the parties is to be considered by the Court in each case and must be ascertained
from the terms of the agreement and surrounding consequences. Agreement of social or domestic
nature do not create legal relationship, hence they are not contracts and are not enforceable by
law. In the case of arrangements regulating social relations, it follows as a matter of course that
parties do not intend legal consequences to follow. For example, an invitation for marriage to a
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friend or family through e- mails or fax or through any means of telecommunication is not a
contract.
There must be a lawful object – Parties to the agreement must contract for a legal object. A
contract is only enforceable by law only when it is made for a lawful purpose. It must not defeat
any provision of law and must not be fraudulent in nature. Thus a contract on a website designed
for the purpose of selling illegal substances online is a void contract. If an agreement is made to
cause injury to any person or his property, such agreement is not lawful and therefore to be
considered as void. If any competent Court regards any agreement as opposed to public policy, it
is a void contract.
There must be a legal or lawful consideration – Consideration is one of most important
element of a contract. The basic rule is that when a party to a contract promises to perform his
promise he must get something in return for the performance of his promise. Consideration is
something of some value in the eyes of law. It may be of some benefit, right, interest or profit
given to the party as inducement of promise. An act constituting consideration must be moved at
the desire of the promisor and must be legal, real and not imaginary. Promises that are physically
impossible to perform cannot have real consideration. For e.g. an online site that offers purchase
of land in moon.
Capacity of parties – Parties to a contract must be capable of entering into a contract. He must
attain the age of majority and must be of sound mind. He must not be disqualified from
contracting by any law for the time being in force. In our country an agreement where either
party is a minor has no significance. It is considered as void ab-initio. As per Section 12 of the
Indian Contract Act, 1872, any person who is in a position to judge and safeguard his own
interest is of sound mind and capable enough to enter into a contract. When a person is declared
insolvent by any competent Court, he cannot enter into a contract relating to his property. In the
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old age foundation case of Mohori Bibee vs. Dharmodas Ghose, it was held by the Privy
Council that an agreement by a minor is void.
There must be free and unaffected consent – Consent which is defined under Section 13 of the
Indian Contract Act, 1872 is an essential requirement of a contract. It is basically the meeting of
minds of the parties. When both agree upon the same thing in the same manner, they are said to
consent. In case consent is caused by coercion, it is voidable at the option of the party whose
consent was so caused. Coercion includes physical compulsion, threat, and violence. Consent has
to be free and genuine and not induced by misrepresentation, undue influence i.e. a case where
one person is in a position to dominate the will of another. But in case of online contract there is
a narrow scope of physical communication between the website and the customer availing their
service, they just give consent by clicking the option that ensures free and genuine consent.
Possibility of performance – The terms and conditions of agreement must be certain and not
vague and must also be such as are capable of performance. An agreement to do an act
impossible in itself cannot be enforced as per section 29 of the Indian Contract Act, 1872. It is
the general rule that the promisors of the contract to perform the promise but their other persons
also who may perform under certain circumstances such as an agent if appointed by the promisor
for this purpose, legal representative in case of death of a promisor. The time, place and manner
of the performance of contract are fixed generally at the desire and conveniences of the parties.
Various rules regarding the time and place of contract are laid down under section 46 to 50 and
section 55. When the time is the essence of contract, a promisor is expected to perform his
promise with the stipulated time period and if he fails to do so, the contract becomes voidable at
the option of the promise.
Formation of Online Contract
The Indian Contract Act, 1872 gives a lawful status to the common contractual rule. A valid
contract is formed by free consent of competent parties for a lawful object and consideration.
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This Act does not prescribe any specific provision for communicating offer and acceptance. It
may be made in writing or by word of mouth or inferred from the conduct of the parties and the
circumstances. Express contract is said to be expressed and entered into by words spoken or
written where the offer and acceptance are expressly agreed upon at the time of formation of the
contract. When the contract is inferred from the conduct of the parties, a contract is said to be
implied. Such contract comes into existence on account of conduct or act of the parties.
The Information Technology Act, 2000 has made certain provisions for the validity and the
formation of online contracts but no specific legislation has been incorporated for the validity of
online contracts in India. Even if no specific provision is made for the validity of online
contracts, it cannot be challenged based on technical grounds.
There are few processes available for forming an electronic contract such as e-mail by which
offers and acceptances can be exchanged. An online contract can be formed by completing the
website form provided for availing good or services offered by the seller in the website for
example air tickets. The person who intends to avail the good or services offered in the website
can place an order on the website by filling the concerned form and communicating such. The
goods offered can be delivered directly through electronic means for e.g. e- tickets or may be
later for e.g. clothes. Another process available for the formation of an online contract is through
online agreements by clicking on the button that says ‘I Accept’ while connecting to a software
and by clicking on ‘I Agree’ button while signing up for an e-mail account.
Online contract is formed through new modes of communication such as e-mail, internet, fax and
telephone. The requirement of essential element such as offer and acceptance in online contract
formation is as much essential as it is for the formation of paper based traditional contract.
Contract formation over websites is quite different from the earlier ways of contract formation.
Online contract formation mainly raises issues in relation to the applicability of the offer and
acceptance rule. It is the website which acts as the retailer and responds as per the consumer’s
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action. When a consumer is interested in downloading songs, videos or movies from a retailer
website in lieu of payment, the consumer will have to agree to the standard terms of the retailer’s
website by clicking the particular option button. Once the terms are agreed by the consumer and
the acceptance is expressed, it is the responsibility of the website to deliver the service to the
consumer. And lastly, on making the appropriate payment, the contract is completed between the
consumer and the retailer’s website for the particular transaction.
C. JURISDICTIONAL CHALLENGES IN ONLINE TRANSACTIONS

The advancement in technology has brought with it a new wave of advanced communication,
and transactions through virtual mediums have replaced face to face transactions. Today, e-
commerce plays a vital role in nearly every sphere of life- with simply just a click of the mouse
we can pay our electricity/telephone bills, do online shopping, transfer money to persons in
different parts of the globe, conduct business deals etc. An online transaction may be explained
as a way of conducting business by utilizing computer and telecommunication technology to
exchange data or conduct business. However, this boom in internet transactions has brought a
host of issues regarding jurisdiction of such transactions to the forefront. The primary question
that needs to be addressed is “when a transaction takes place online, where is the contract
concluded?” Justice S. Muralidhar has stated that the traditional approach to jurisdiction invites a
court to ask whether it has the territorial, pecuniary, or subject matter jurisdiction to entertain the
case brought before it. With the internet, the question of ‘territorial’ jurisdiction gets complicated
largely on account of the fact that the internet is borderless.
U.S. Courts follow the “minimum contract rule” for determining territorial jurisdiction of online
transactions as laid down in the leading judgment of International Shoe Co v. Washington. It is a
requirement that must be satisfied before a defendant can be sued in a particular state. In order
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for the suit to go forward in the chosen state, the defendant must have some connections with
that state. For example, advertising or having business offices within a state may provide
minimum contacts between a company and the state. This test allows for jurisdiction over a non-
resident when such contract exists between the defendant and the forum state so long as
maintenance of the suit does not offend the traditional; notions of fair play and substantial
justice.
The Indian position theoretically matches with the US rule of minimum contracts. For civil
matters, the Code of Civil Procedure, 1908 governs the jurisdiction aspect. Section 19 of the Act
states that where a suit is instituted for compensation on account of wrong done, if such a wrong
was committed within the local limits of the jurisdiction on one court and the defendant resides
in or carries on business, within the local limits of the jurisdiction of another court, the suit may
be instituted at the option of the plaintiff in either of the courts. Thus, for instance, if Mr. X
residing in Bangalore publishes on his website in Chennai defamatory statements against Mr. Y.
Mr. Y may sue Mr. X either in Bangalore or Chennai.
Section 20 of the CPC further provides that the suit shall be instituted within the local limits of
whose jurisdiction the defendant resides or the cause of action arises. For example, A is a
tradesman in Calcutta. B carries on business in Delhi. B buys goods of an online and requests A
to deliver them to the East Indian Railway Company. A delivers the goods accordingly in
Calcutta. A may sue B for the price of the goods either in Calcutta, where the cause of action has
arisen, or in Delhi, where B carries on business.
Further, Section 13 of CPC provides that a foreign judgment is to be conclusive as to any matter
which has been directly adjudicated upon between the same parties or between parties under
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whom they or any of them claim litigating under the same title except under certain specified
conditions. Talking about the presumption as to foreign judgments the provisions of the Act
states that the Court shall presume upon the production of any document purporting to be a
certified copy of a foreign judgment that such judgment was pronounced by a Court of
competent jurisdiction, unless the contrary appears on the record; but such presumption may be
displaced by proving want of jurisdiction.
For instance: A is a tradesman who maintains his website from USA; B is a resident of India. B
buys goods of A, online and requests A to deliver them to his address in India. A, fails to deliver
the goods on time, B suffers a heavy loss. B sued A in an American Court, court decided in favor
of B orders A to compensate B for the same. B filed a petition in Delhi HC for the enforcement
of the same. The Delhi HC will consider the American Judgment as a conclusive as to any matter
thereby.
In the case of Casio India Co. Ltd. vs Ashita Tele Systems Pvt. Ltd. [2003 (3) RAJ 506] there
was a passing-off action where the Defendant was carrying on business from Bombay. The
Defendant had managed to get a registration of domain name www.casioindia.com and
Defendant no. 2 was the Registrar with whom the domain name had been registered. The
Plaintiff, on the other hand, claimed to be a 100% subsidiary of Casio Computer Ltd., Japan
(Casio Japan) which was the registered owner of the trade mark Casio in India used for a large
number of electronic and other products. He had also obtained the registration of large number of
domain names in India like CasioIndia Company.com, CasioIndia.org, CasioIndia.net as well as
Casio India.info, CasioIndia. Defendant no. 1 had managed to get the registration of these
domain names during the time when it held a distributorship agreement with the Plaintiff. The
H’ble Delhi High Court has observed that once access to the Defendants website could be had
from anywhere else, jurisdiction could not be confined to the territorial limits of the place where
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the Defendant resided and the fact that the Defendants website could be accessed from Delhi was
sufficient to invoke the territorial jurisdiction of a court in Delhi.
Another leading judgment is of (India TV) Independent News vs India Broadcast Live (2007
(35) PTC 177 Del). Here the Delhi High Court differed with its earlier judgment in Casio India.
The Court holds that jurisdiction of the forum court does not get attracted merely on the basis of
interactivity of the website which is accessible in the forum state but yet held that if the
Defendants website is interactive, permitting browsers not only to access the contents thereof but
also to subscribe to the services provided by the owners/operators, then court’s jurisdiction at the
place where the website is accessed from is permissible. The High Court of Delhi ruled that it did
not have jurisdiction over the domain name www.indiatvlive.com, because the defendant was
based in Arizona. The court relied on the US circuit case Compuserve Inc. v. Patterson, which
referred to a three-part test for deciding jurisdiction:
 The defendant must purposefully avail itself of acting in the forum state or causing a
consequence in the forum state
 The cause of action must arise from the defendant’s activities there
 The acts of the defendant or consequences caused by the defendant must have a
substantial enough connection with the forum to make exercise of jurisdiction over the
defendant reasonable.
In Banyan Tree Holding (P) Ltd v. A. Murali Krishna Reddy and Anr, the Delhi High Court
stated that in order to establish the jurisdiction in forum court, even when a long arm statute
exits, the Plaintiff would have to show that the Defendant purposefully availed of the jurisdiction
of the forum state by specifically targeting customers within the forum state. A mere hosting of
an interactive website without any commercial activity being shown as having been conducted
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within the forum state would not enable the forum court to have jurisdiction. The law as laid
down in the case may be summarized as follows:
 Some commercial transaction must have taken place as a result of the site
 The defendant must have specifically targeted the forum state
 Some injury must have resulted to the plaintiff due to the actions of the defendant
 The plaintiff must have a presence in the forum state, and not merely the
possibility of a presence
A mere hosting of a website accessible in the forum state, or a posting of an advertisement or a
passive website that does not result in a commercial transaction with a viewer in the forum state,
cannot give rise to a cause of action and therefore the court does not have jurisdiction.
D. Digital Signature/Electronic Signature

Electronic signature and digital signature are often used interchangeably but the truth is that
these two concepts are different. The main difference between the two is that digital signature is
mainly used to secure documents and is authorized by certification authorities while electronic
signature is often associated with a contract where the signer has got the intention to do so. More
details about the difference between the two are provided below.
Key features of Digital Signature
A digital signature is characterized by a unique feature that is in digital form like fingerprint that
is embedded in a document. The signer is required to have a digital certificate so that he or she
can be linked to the document. Digital signature is often authorized by certification authorities
that are responsible for providing digital certificates that can be compared to licenses or
passports. A digital certificate is used to validate the document to ascertain its authenticity if it
has not been forged. This plays a pivotal role in verifying the identity of the original person with
the signature.
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The other key feature of a digital signature is that it is used to secure digital documents. There
are some people who have a tendency of tempering with digital documents obtained online but
with a digital signature, this can be impossible. The document is secured and can only be
accessed by the authorized person for any alterations or amendments.
When a digital signature is applied to a certain document, the digital certificate is bound to the
data being signed into one unique fingerprint. These two components of the digital signature are
unique and this makes it more viable than wet signatures since its origins can be authenticated.
This cryptographic operation helps to perform the following functions:
 Prove the authenticity of the document and its source
 Make sure that the document has not been tempered with
 Personal identity has been verified.
 The other notable aspect about digital signature is that it is comprised of different types
that are supported by mainly two document processing platforms that are adobe and
Microsoft.
Key Features of Electronic signature

An electronic signature is described as any electronic symbol, process or sound that is associated
with a record or contract where there is intention to sign the document by the party involved. The
major feature of an electronic signature is thus the intention to sign the document or the contract.
The other notable aspect that makes an electronic signature different from a digital signature is
that an electronic signature can be verbal, a simple click of the box or any electronically signed
authorization.
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The main feature of an electronic signature is that it reveals the intent by the signer to sign the
document. This is usually applicable to contracts or other related agreements that are entered into
by two parties. As noted, there are different types of electronic signatures and these are legally
binding once all parties have shown their commitment and intent to enter into a certain contract.
The other aspect about an electronic signature is that it helps to verify the document. If it has
been signed, its authenticity can be verified where the parties involved can be identified.
However, an electronic document can be difficult to verify given that a digital certificate similar
to the one given for digital signature is not provided.
The other notable feature of an electronic signature is that it is used to execute an agreement. For
instance, in a contract, two people usually agree to fulfill certain duties and this agreement can
only become legally binding when it has been signed by both parties. This is when an electronic
signature can be used. On top of that, it can be observed that electronic signatures are commonly
used in contracts by virtue of the fact that they are easy to use.
E. E-PAYMENT
E-commerce sites use electronic payment, where electronic payment refers to paperless monetary
transactions. Electronic payment has revolutionized the business processing by reducing the
paperwork, transaction costs, and labor cost. Being user friendly and less time-consuming than
manual processing, it helps business organization to expand its market reach/expansion. Listed
below are some of the modes of electronic payments −
 Credit Card
 Debit Card
 Smart Card
 E-Money
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Electronic Fund Transfer (EFT)An electronic payment is any kind of non-cash payment that
doesn't involve a paper check. Methods of electronic payments include credit cards, debit cards
and the ACH (Automated Clearing House) network. The ACH system comprises direct deposit,
direct debit and electronic checks (e-checks).
For all these methods of electronic payment, there are three main types of transactions:
A one-time customer-to-vendor payment is commonly used when you shop online at an e-
commerce site, such as Amazon. You click on the shopping cart icon, type in your credit card
information and click on the checkout button. The site processes your credit card information
and sends you an e-mail notifying you that your payment was received. On some Web sites, you
can use an e-check instead of a credit card. To pay by e-check, you type in your account number
and your bank's routing number. The vendor authorizes payment through the customer's bank,
which then either initiates an electronic funds transfer (EFT) or prints a check and mails it to the
vendor.
You make a recurring customer-to-vendor payment when you pay a bill through a regularly
scheduled direct debit from your checking account or an automatic charge to your credit card.
This type of payment plan is commonly offered by car insurance companies, phone companies
and loan management companies. Some long-term contracts (like those at gyms or fitness
centers) require this type of automated payment schedule.
To use automatic bank-to-vendor payment, your bank must offer a service called online bill pay.
You log on to your bank's Web site, enter the vendor's information and authorize your bank to
electronically transfer money from your account to pay your bill. In most cases, you can choose
whether to do this manually for each billing cycle or have your bills automatically paid on the
same day each month.
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F.E-BANKING
E-banking refers to electronic banking. It’s like e-business in the banking industry. Electronic
banking is also known as “Virtual Banking” or “Online Banking”. Electronic banking is based
on banking based on information technology. Under this I.T system, banking services are
delivered through a computer-controlled system. This system involves a direct interface with
customers. Customers do not have to visit the bank’s facilities.
Popular services covered under E-banking include: –
 ATMs,
 Credit cards,
 Debit Cards,
 Smart Cards,
 Electronic Funds Transfer System (EFT)
 Check the truncation payment system,
 Mobile Banking,
 Internet Banking,
 Telephone Banking, etc.
Advantages of E-Banking: –
 The cost of operation per unit of services is lower for banks.
 Offers convenience to customers since they are not required to go to the bank’s facilities.
 There is a very low incidence of errors.
 The customer can obtain funds at any time from ATMs.
 Credit cards and debit cards allow customers to get discounts at points of sale.
 The customer can easily transfer the funds from one place to another place electronically.
Disadvantages: -
 Savings and credit cooperatives, and in particular small local cooperatives, strive to
match the level of convenience (ATMs and branches) that many banks offer them
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customers, although many are part of shared networks that increase channels available to
its members.
 Some Credit Units are limited in their product offerings
 One must qualify for membership
 One must pay a membership fee to join
Page 22 of 22

E Notes L&T Unit 2

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Chanderprabhu Jain College of Higher Studies

Class : B.A.LL.B/ BBA LL.B (VII SEMESTER)

Paper Code : LLB 405

Subject : LAW & EMERGING TECHNOLOGY

Faculty Name : Ms. KIFFI AGGARWAL

A. MODEL LAW OF E-COMMERCE

Application of legal requirement to data messages

Communication of data messages

 The data message is attributed to the originator if it is sent by him or by a person

Implementation & Judicial Interpretations across the globe

Essential Elements of Online Contract

C. JURISDICTIONAL CHALLENGES IN ONLINE TRANSACTIONS

D. Digital Signature/Electronic Signature

Key Features of Electronic signature

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E Notes L&amp;T Unit 2

Uploaded by

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Copyright

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Share this document

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Did you find this document useful?

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E Notes L&amp;T Unit 2

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Copyright:

Available Formats

Chanderprabhu Jain College of Higher Studies

Class : B.A.LL.B/ BBA LL.B (VII SEMESTER)

Paper Code : LLB 405

Subject : LAW & EMERGING TECHNOLOGY

Faculty Name : Ms. KIFFI AGGARWAL

A. MODEL LAW OF E-COMMERCE

Application of legal requirement to data messages

Communication of data messages

 The data message is attributed to the originator if it is sent by him or by a person

Implementation & Judicial Interpretations across the globe

Essential Elements of Online Contract

C. JURISDICTIONAL CHALLENGES IN ONLINE TRANSACTIONS

D. Digital Signature/Electronic Signature

Key Features of Electronic signature

You might also like

E Notes L&T Unit 2

E Notes L&T Unit 2