Scribd Logo
Upload

Welcome to Scribd!

  • Electronic Commerce

    Uploaded by

    Khushi Thakur
    8 views35 pages

    Original Title

    Electronic commerce

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    8 views35 pages

    Electronic Commerce

    Uploaded by

    Khushi Thakur

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    of 35
    CHAPTER 8 Electronic Commerce ent millennium is going to witness a new cult culture that will bo a driving force in the day ahead and is bound gitterey our way of life. Originally confined to military establishments’ chang! had due to its speed, interactivity and flexibility, tremendous Hoetemet disseminate information beyond, the geographical boundariget*Mtal activities that are at present possible over the Internet might not ‘na Dives ned by its inventors—the process has not yet endeq . beg , Stil] ‘The pres: even envi volving.’ e Gn of the major areas impacted by the Internet has been com The traditional market structure has been transformed. In fact (ys globe has been converted into a market place. Manifold advantane, Hl been unfolded both for the seller as well as the buyer. The seller <°, have reach any part of the globe and the buyer has unlimited choice to aect",¥ seller. Efficiency has been greatly increased, paper work reduced, time, shortened and expenses lessened. lag Enormous flexibility of the Internet has made possible what ; popularly called "e-commerce which has made inroads in the tag’ El For history of Internet See ACLU v. Reno, 929 F. Supp. 824 (E.D.Pa. 1996) See also Leiner et al, A Brief History of the Internet, The Internet Society (availehie www.isoc.org/Internet-history/brief/html. 2 The term Internet is defined as set of computer _networks—possibly dissimilar—joined together by means of gateways that handle data transfer and tt conversion of messages from the sending network to the protocols used by rectving network. See Microsoft Press Computer Dictionary 220 (2d ed. 1994). 8. See Patrick. E. Cole et al, ‘Business—The Internet Economy’, Time, July 20, 1998 at p. 34 (Characterizing the Internet as the real miracle that lets one do things one could not even dream of doing before). See also Alan Greenspan, Statements to the U.S. Congress (June 14, 1999), FED. RESERVE BULL. 556 (Stating that innovations in Information Technology..... have begun to alter the’ manner in which we do business and create value, often in ways that were not readily foreseeable even five years ago). 4. Generally e-commerce is defined as trade which takes place via web site of the seller which he himself owns or host his business details on the web site of the other. This includes business -to business (B2B), business to consumer (B2C) EVasumer to business (C2B) and consumer to consumer (C2C) trade/ See. e-commerse Survey. The Economist, Feb. 26, 2000, p. 6. However, the author of this pape includes, for the purposes of discussion, e-mail and Blectronic Data Intercbanst within the e-commerce expression. ( 210 ) corner - au o of busines! 5 management: All the facets of the busi : af el wusiness tr i 88 Swe ae Se Gt an! ee now be executed jnternet |» 9 _ advertising, onlin. . (othe, pontine” investment,”” auction," and professional serene” gf Many advantages offered by the information technol Q ide Tenges have also been posed to the leg ology, a “ : sal syst chggsues Taised are summarized by Onlleoen tauimer taneous —aineds are employed for measurin ; ; ier iferent ig skactcoilo! comimerts Ecuwth with the estimates are projected. See Matk Albri ojected. right, ‘ reall (Memet Commerce Increasing, Give or Take a few Billion, 12 Apel Section ¢ 880 Times at. 3. Online retailing in the year 1997 ig estimated around $ Bushoion and Prak we year 2001 as $ 220 billion. See Paul Taylor, The io? mes (1997) Internet Seen as Lucrati - ci} mons Research paper provides that tlobal lectronic'commeree worth $12 Fillion took, place it tice aoe and will grow to $ 350 to 500 billion by the year vier and $1 tillion by 2003—05. See the Electronic Communication Bill 99/100 ‘pevember 1999. House of Commons Research Paper, available at Fa a sear an ae auptner estimate y the year 2002, business will buy and sel wor joer illion over the Internet, with the ‘current trend or eatis ‘on the vernot $ Shing every 100 days. See Electronic Commerce, An International Overview, dewrnational Counsellor, available at httpuhrww.Jnt.counselor. com/elect, comm. ‘html. Inuerrrey of March, 1999 shows that e-commerce web sites occupied the top fifteen, A Suites of 1998 in comparison to zéro in 1996. Business to Business (B2B) “eommerce exceeded $ 102 billion in 1998 and could rise to $ 300 billion by 2002 can"g 13 trillion by 2003. See William M Daley, Introductory letter to the Emerging Digital Economy 11," US. Department’ of | Commerce, June 1999, httpyiwww.ecommerce.gov/ ede/ede2.pdf. * Herat survey conducted by National Association for Software and Service Companies {NASSCOMD, e-commerce in India is likely to be around Rs, :450 crore in the year $o00 and expected to reach Rs. 10,000 crore by the year 2002 See Computers Today, Nov. 30, 1999 at p. 17. @. Iris estimated that by 1988 the advertising revenue on the web will reach $ 1.4 Lilien See Joan E. Rigdon, ‘HIP Advertisers Bypass Madison Avenue. When they Need Cutting Edge Web Sties', WallStJ, Feb, 28, 1996 at Bl. In America B. Parkins, ‘Can TV sports Ad. value to e-commerce companies’? Wall St. J. Nov. 29, Jo09 et 28. A Leading Internet Advertising Association in 1998 reported that Intemet advertising exceeded one billion dollars, Seo Internet Advertising Press Telease available at http//Avww-iab.net/new/ context/billion html. 1, Where a "product" is an information or software that can be electronically delivered. Prtke transactions can be executed over Internet including, payment. For Electronic ceement. See Viviane A. Lawack, ‘Electronic Payment Via the internet in the Netherlands’ The EDI Law Review 6:85-111, 1998. Now publishers of Newsletters, Magazines. handbills information on the web site. See Allan M Gahtan, ot Guide for Legat and Business Professional (Carswel 1998) at p. 17. see eat sPaizcansion on Electronic Banking, See, Surfs up for New—wane Bankers is at p. 77. - Be Oct. 7, 1008 St Kashing in on the Internet, Bullding the Web is Jack, Egan and" ineas’, US News and World Rep. Nov. 18, 1005. Piet Tt is predicted that within five years consumers vill purchase and maintain online mutual illion. os one SEP anctieon ons yet to take off, The Gazette Montreal 8 August 1996, at p18. amone Research paper available at Inttp//wrww/parliament. U.K. and newspapers provide al. Internet Law, Practical J Thomson Professional Publishing a 10, 1, 12. 22 Cber Low in India 1 i i hn, eriean companies can via the Interne, foevindia to the public in England, without comp, thei > regulations. Dutch heal ; insurance companies can tg wieght, at low premiums to a selected population of Theat fer SEQ without regard to Dutch antictiscrimination nytealthy it Pale’ use telemedicine to treat patients in Ug ospiUS doce uate locations and thus avoid liability in the Ug Citas ao oat child pornography can operate without hej, UES. Deale, ttle transactions can take place without any countries youeht. a iy applicable, ownership of information is very hi’, VAT int, Sa illicit re-use of copyright material is comm Place Pte Among the many issues raised by the Cyberspacgis “ questions relating to the formation of contract.!5 The questions mdamentay answers from the Indian perspective, are : » Which What are the issues generated by the Introduction Of the Technology relevant for contract. formation? How far is the Indi. Act, 1872'° flexible enough to bring within its fold thesc issue CORtragt provide for their resolution? How far has the Informatin’® reuse ang 2000" covered the issues left uncovered in the Contract Act? To what Act, have the basic principles of formation of contract been modifies hat exten; Act? ‘To what extent does the IT Act reflect the esseneet UNowe It Model law on Electronic Commerce on which it is model fyUNCMRA, issues still left for the Courts to resolve? are the See, W. Calkoen, “Harmonization of Law and the Internet’, to a ' Ler 928) Api pM. c ternational Business 14. The term’Cyberspace" was coined for the first time by Wiliam Gibson for hie . fiction ‘novel Neuromanser which for him méant a world wheat, © his scien fe the hy ras connected to s' computer network with access ‘to all te information ig distance." See, William 8. Byasee, Jurisdiction of Cyberspace ¢ Erecedent to the Virtual Community, 30 Wake Forest’. Rev 197, 198 (1995), Cyberspace is also defined as : Cyberspace ie globally networked, computer, ‘sed, and computer generated, multidimensional in this world, onto which every computer screen is « Riadow; actual, geographic distance is irrelevant. Objects seca or hecad are neither Physical nor, necessarily, presentations of physical objects, hat are ther—in form, May 4-5, 1990), Jobal Information 15. Seo Tlene Knable Gotts and Allan D Rutenbe: i, ‘Navigating. the Global Informaln Super highway : A Bumpy road lies Ahead’, 8 Harv. JL. and Tech. 275, 317 (1995). The issues involving first amendmer it, ight and contract law have iecuseed. "nt, copyright ig, Hereinafter referred to as the Contract Act. 17. Hereinafter referred to as the IT Act commerce a _ oe FORMATION OF ELECTRONIC CONTRACTS eaking, electronic contracts can bi ified'® adly Spa by Electronic Data Interchange cootianty ection oepr® Bro? xecute’ acts Se" Cyber contracts,” also called lick wrap! or Mouse lick Gna e racks: . Bafa ontracts PY ee Data Interchange mic dal x F is the ele: i at | Bec puter af information using an Spe mies eae ie puter ration.” It is also defined as the electronic interchange of machine “the jeiMgple structured data which has been formatted according to. agreed , ets and which can be transmitted directly between different computer ta festet hs tho aid of telecommunication interface with or without human ention. : em PAIR Bet, tts ty clectronie data'inberchenge ian set = fe their contracts Sectrone data intorchange,% Tt falitates direct to jectronic ct iakoriccee an n between computers in a t ieitter processable format and is generally used by the parties having nt EE awn ‘ionship. These parties, before establishing any T doatractual relationship, generally exchange an agreement called as "trading : saipor agreement” in whieh the details about the warranties, disclaimers, feiities and the relevant rules that will be applicable in case of dispute, ‘entioned. In pursuance to trading partner agreement parties transmit ‘DI, purchase orders, acceptances and invoices.%* through BI “a The contracts classified here into two groups are together called online contracts and are distinguished from the off-line contracts, However, legal issues raised by these two types of the electronic contracts are different, it’ is for this reason that the present classification has been adopted. Many writers include only electronic Data Interchange in the category of electronic contracts, however, in addition to Blectronie Data interchange, e-mail and web site based contracts have been included here. ; 19, It will be referred throughout this paper as EDI. 20, Cyber contracts derive their name from Cyberspace, see_supra note 14. 21, Click wrap contracts derive their name from shrink-wrap agreements which is now a common mode of selling software, In shrink wrap agreements, the buyer is asked to go through the printed terms and conditions before clicking on the “Accept” button. By clicking on the “Accept” button, buyer becomes party to the agreement. However, buyer is having choice to reject the software by simply clicking "Do Not “Accept” button. In U.S., shrink-wrap software licence agreements have been accepted ‘as enforceable contracts under certain conditions, see Pro CD Inc. v. Zeidenberg, 86 2000 Inc, 105 F. 3rd 1447 (7th Cir. F. ard 1447 (7th Cir. 1996); Hill v. Gateway, 1997); Hotmail Corporation v. Van Money Pie Inc., et. al, C. 98-20064 (N.D. Cal. April 20, 1998). See also Martin H. Samson, ‘Click-wrap Agreement held Enforceable New York Law Journal, 30 June 1998, available at http/hvww.JX.com/Interne/0630 click html. 2. See Thomas J. Smedinghoff (Ed) Online Law. The SPA’s Legal Guide to Doing Business on the Internet (Addison-Wesley Developers Press 1997) at p. 82. 28. See Aaticle 26) of UNCITRAL Model Law on Electronic Commerce available at h/text/electron/mV/ec.htm. 2%, See Eisclen, ‘The Electronic 25, See Graham J. H Smith; Internet London, 1999), at p. 207. 28. Supra note 22 at p. 80. Law and Regulation (2nd ed.) (Sweet and Maxwell. http/Avww.uncitral.org/englis! pulwerw uncitral.crg-/eng Sita Interchange Agreement, 1995 SA Mere. LJ. 1-18. | Cyber Law in 24 Neo toy, ht ; Contracts ee ™ 1.2. Ore enjoys the luxury of a wide variety of communicatig ince technology is continuously changing, new methods of Seas ™eth, Since Iving which make their categorization difficult, The co Unie ae ev 3s. presently possible, are e-mail, listserv, Rewsgroup Unieat! methods, tion and world wide web (www).” At Present the oo wet Corn of communication of business information via the qymonly ym methods @ commercial web sites, The other methods make 2 enanation possible to the public, which make them infeasib| bipartite contracts.” E-mail oe ; interested in communicating business details ee eventtermail addcesa-for-whick he’ Way to register himaeit” may Internet service provider who runs a constantly accessible mai] Sery ms & the registration is complete, by filling up the electronically ea = Once form, an electronic mail box (inbox).along with the addreye™ allocatble the user. The person wishing to send an offer to another "liter f desired contents of the offer on his system with an e-mail’ ay ae 7P® the party to whom he intends to send the offer which is to be mentioned ; address column. The message is then electronically transmitted by prevthe | the "send" button to. the ‘service provider of the sender ary Ming forwarded to the recipient’s provider who puts it in the recipient's m the where it is saved. Placing e-mail in the recipient's mailbox dose on him to know the contents of the message. This will be posdbi only wie® he queries his-mail box from his own system by inserting ID (woe aos and password. Similarly, the sender does not know whether th recipient has received the message. World Wide Web (www) The World Wide Web service” allows a customer to place an order ig goods or services in two ways : (1) The supplier's non-intomi commercial web page popularly known as "digital shopwindow", earyine ie details of the goods or services available, can be retrieved by the octet” After making a choice, he can place an’ order by e-mail, (2) The supmle: maintains a website which along with the business details displays an — online order form. The customer interested in making purchases has to fil up the form. The customer comes automatically in contact with the fabpliers web server and no third party is involved.» There is no store and forward system, however, several servers may be used either for forwarding data or connecting the customer to the Internet.3! 27. See ACLU v. » 919 F, Supp. 824 (E.D. Pa. 1996). 28. Supra note 25 218. It 28. General impression is that world wide web is a network which in fact is See | is only a service. Seo Lars Davis, Contract Formation On the Internet, See Rent Myths in Lilian Edwards and CharLotte Waelde (ed) Law and the Intern Regulating Cyberspace (Oxford, 1997) at Pp. 103, Contracts’ 80. See Glatt, ‘Comparative Issues in the Formation of Electronic Communication Law. Vol. 6, 1998 at P. 34, Actual Time 51. See Jan Malte Niemann, ‘Gyber Contracts, Comparative view on the of Contract Formation’, Communication Law, Vol’ 6 2000 at P. 99- as idity of Electronic Contracts ve objectives of the original IT Act spelt in the statement of EG a is to legalize e-commerce, Thig objective is reiterated in nd T° P'the IT (Amendment) Act, 2008 also. Surprisingly, there was «clive vision in the o ny or att validating contracts executed. #6 P'this lapse was in spite of the fact that there was an express re si fect in the Model Law® which forms the hasta of the IT in 10 Ty its statement of objects and Teasons, jaime“ amendment) Act now Provides that where in ‘a contract rm ision makes a_plai, ve provisi id weer, Statement to the effect that e oracts are legally valid without further spelling out attendant ic Cf contract formation which raise many question than the nes vided by this amendment. Are electronic ‘contracts now fyswFS 17 dealt under the IT Act? Are Common Law principles, followed by wsivan courts to interpret provisions of the Indian Contract Act, India to the electronic contracts also? Has the IT Act in any way ble. modified peice. resitialtie ielativg ie tee contract (i) Theory of Attribution As stated above, ic Transactions Act, cle 11 of the UNCITRAL Model Law provides ‘pressly lectronic means are valid. Similarly, of the Uniform Commercial Code contains an exprose Rroxision for legal validity of the electronic contracts, 93. Section 10-A. F16 a Cyber Law in, India 6 OW on 5 - ’s computer, for instance f . jon. The customer's ‘ es + 80 Fina an intervention. n its own place an order to ign UNding 4 bao the Fg ordor after finding communiention juPPlion Stock computer will acce} i : n Mh d stock sufficient to sntisty ty decors’ hong the already agreed fornia water fixed cupboards, By Pressing orders ont re also displayed on cor displayed and by inserting mengybttton, yo of the desired product wil come out. This is good for one av", the detticg product will automatically 9 be even trading partner agreement each ed ian unlike EDI Se ligenos: computers can work autonomously. EY Virgat of this artifici ml exercises and have an inbuilt capacity to mo, caine least thrush tw instructions which enable them to make Gecisiong 4° oven devise new Modified and self created instructions.2 Thus, te ba rneee seucither supplier or customer or both of them will be ane situation Sscuted by the two systems end in second situation, sure Contract aco of the contract executed by the computer fixed in Plier esi See tlon arises, is this contract valid within the Parametons eet e " , ee erthe essentials of a valid contract is mutual consent, ss ad idem, which of course, must be that of the offer and acts ad uses (a) and (b) of Section’ 2 of the Contract Act provide teres, Supelsuscs offeree must be two persons. The word "person" inetd is Satural as well as: legal persen*®-but compuaterc ae not fit in iene’ bath two categories.” Thus, any contract executed by tics autonomous « En cot ke eavered by the Contract Act. In order to give legal rene pies ee ont options were available to legislature before t+ elther to, clothe ‘comiutara with legal personality so as ties IT Act : either > clot c a ir old the as parties in their own right or to treat them as the agent of the party. 3 court precedents support the option of treating computers asin? agent of the party.* nid # ‘The IT Act has adopted the principle of attrib an electronic record? shall be attributed to the ori Passing th. ution which provides iginator“ if it was gt i z as sent the originator himself or anyone authorized by him or by a informatic, system programmed by or on .behalf of the criginator to operate 34. See ZA Zainol, ‘Electronic Data’ Interchan; Malaysian : Perspective’ (1998) : ‘Technology at p. 257, 85. See Tom Allen and Robin Widdison, ‘Can Cor 38. 8%. Supra note 42 at 30. The ge (EDD) and Formation of Contract International Journal of Law and Informit : computers are clearly not natural ner English Contract Law at present deem them to 88. See State Fai 89. Section 26) says » soft : 40. Originator menrme® ‘are and databases, any electroni, ted, stored, oF transmitted to any other peserm®, Message to be sent, genera , 27 commerce 4. ‘Thus, any communication made by a computer shall be at of the originator on the principles of agency. The human agents have been replaced by the electronic ly: atical soted 10 be a aeeonly kno cot these electronic agents are computer systems which were sine® py the originator, by applying the principle of attribution, the ned Pye held responsible for its operation. mmed. fgotor Wi otomy of Offer and Invitation ‘to Treat 4. pich ‘Common Law Courts have maintained a distinction between offer 2¢ ‘jon to treat*® which arose first in law of auctions.*® However, it is a invitat distinguish between offer and invitation to treat.’ The difficulty ot 005) ' oa by the fact that the wording of the statement is not f compouns x’ statement may actually be an invitation to treat although it conclusive: , word offer; while a statement may be an offer, although it is cootain® { as an acceptance” or although it requests the person to whom it expre’ to make an offer. J adirestt ending this difficulty, there is a commercial expediency to No ‘this dichotomy. Otherwise, the shopkeeper might be exposed by sinter’ ions for damages if more customers purported to accept than his many ®1d satisfy. This is perhaps the reason that the Courts in India are stock "to maintain this distinction. Se above issues are relevant in case of a website carrying a statement f the business details of the supplier. Is this statement an offer or simply oft pformation for the prospective customers (invitation to treat) who may wea Sation TI of the IT Act. This provision has made significant departure from ‘4 iit 13(2(b) of the UNCITRAL Model Law and thus made originator strictly liable ‘éven in those situations where he may not be negligent or careless. This issue has been discussed under the heading of. the Application of doctrine of mistake in this 4, See CC. Nicoll, ‘Singapore : “The Intelligent Land", The EDI Law Review 6 :123-141 1999 at p. 135. 4s. Andrew Phang and Daniel Seng ‘The Singapore Electronic ‘Transactions Act, 1998 ‘and the Proposed ‘Art. 2B of the Commercial Code’ : (1998) 7 International Journal of Law and Information Technology, at p. 111. RT. Nimmer; ‘Article 2 B : An Introduction’ 1997 (15) John Marshall Journal of Computer and Information Law at p. 211. 45, Harvey v. Facei, (1893) AC 652; Pharmaceutical Society of Great Britain v. Boots Cash Chemists Ltd., (1953) 1 All E.R. 482 (C.A). 48. Cheshire, Fifoot and Furmosten’s, Law of Contract 12th ed. (Butterworths 1991) at p. 21, 7 47. Sutton and Shannon on Contracts 6th ed. (Sweet and Maxwell London, 1963) at p. 37, ‘ 48. Chitty on Contracts (General principles) 27th ed. (Sweet and Maxwell London, 1994) at p. 94. 49. Spencer v. Harding, 1870 LR. S.C. p. 661, 50, Bigg v. Boyd Gibbins Ltd., (1971) 1 WLR. 913, 51. Harvela Investments Ltd. v. Royal Trust Co. of Canada,” (Cl) Ltd., (1986) A.C.°207. For criticism to this and other grounds justifying the rationale of maintaining the dichotomy and offer and invitation to treat, see GH. Treital, The Law of Contract Bad ed. (Sweet and Maxwell on 1996) at p. 10. See for instance, MC Pherson v. Appana, ALR. 1951 S.C. 184 Badri Pra State of M.P., ALR 1970 S.C. 706; Mattan Helis Bros. v. Mahabir Ind; AUR GONy Pat. 91. Cyber Lew tn India tay, © ty 218 tionale behind maintaining thj. " . ce an order? The rat : this qj, Teer ond, locfitation to treat may not hold true in the ease of wobriotemy offe! ting commercial transactions because commercial Websites uyot for executing com; a way that once acceptances received are sites i Cy constructed in eoffer can be automatically withdrawn, ed’al ts S goods JP gn angument that the seller may not Like to gett ji’ i atl certain jurisdictions or to certain a ats a bereons. ‘ The Precigg®®%a ih seretiae whether a statement is an offer or an invitation ty gee, te intention of the Parties ere ctaof the inbuile Meee apy)? the uniformly to all situations. By virtue eis dab flexibility, <¢PPlicay® websites serve both “shop displays and "shop sellers"—they merge websivaing and the selling" which makes application of 2, ‘use adveplo, in all situations, infeasible. Each statoment has to pe’), Sent Pav language used and usage of trade. A statement on a websig'téed treated as an offer where the person making it intends to be boung May be as the offeree accepts its torms but where it can be read from the jc! ten, Used in the statement that the seller is simply making known to oii°@tayu terms on which he is willing to negotiate, he cannot be said to hat! the ‘an offer but only invitation to treat. mut 4, Application of Mirror Image Rule ‘The Common law principle that a contract comes into existen, when acceptance is a mirror image of offeror’s: offer" has been statutory recognition in the Contract Act. The rule is that a proposaf'”® ripen into a promise only when acceptance is absolute and unqualisci ‘Thus, an acceptance: with variation is not an acceptance, but a court: proposal which must be accepted by the original promisor before a cont? is made. “An important qualification to this rule is that Where acceptance of a proposal is not absolute, the proposer may still be bound, by his subsequent conduct, it is shown that he has accepted additions) conditions incorporated by the acceptor in his acceptance. When a counter proposal is accepted, a contract comes into existence ‘Ba. Toralf Needing, Distance Selling in a Digital Age, Communication Law Vol. 3 Ne 3 1998. 55. Assafa Endeshaw, ‘The Proper Law for Electronic Commer of Law and Information Technology at p. 11. 56. However, there may be a statutory rule, in order to avoid unnecessary litigation, providing that the business information available on the website be treated as invitation to treat. The rule may be on the lines of Art. 14(2) of the ‘Vienna Convention On Contracts For the International Sale of Goods" which provides that a proposal other than the one addressed to one or more specific persons is to be considered merely as an invitation to make offer, unless the contrary is clearly indicated by the person making the proposal. Consumer Association Policy paper, Consumer Transaction on Internet, issued in England in 1997 considers web based information as invitation to treat. 57. Supra note 61. 58. This is commonly called mirror image rule. See Fransworth on Contract 9.21 (1990). 59. See Section 7 of the Indian Contract Act, 1872. 60. Haji Mohammad Haji Jiva v. E. Spinner and others, (1900) 24 Bom. 510 at P 523; see also Nihal Chand v. Amar Nath, AIR. 1926 Lah. 645. 61. Bhagwandas v. Shri Dial, 1913 Punj. Rec. No. 92 p. 325; see also Hargope! ¥- Peoples Bank of North India, ALR. 1935 Lah. 691; Jawahar Lal Burman v. Union of India, ALR. 1962 S.C. 378. 2 only International Journal commerce 219 wn , to of the contract are the terms of the counter proposal. This is a Websit ity Y a 5 terme shot doctrine which means that where conflicting communications ed are ites ‘CU ied last ged, each is a counter offer, so that if a contract results at all, it cechortttne terms of the final document in the series lending to. he wit be oor the contract. #qc105iOn the unrestricted nature of electronic contracts, there is a ‘Pitty that an acceptance may not be mirror image of the offer® This "68 however, unlikely to arise i > is rms" a 0 ly arise in case of web based ibility, 2PPticgthe || Mle of Lreraty web page carries predetorsined 5s yee Web. based they mente entrees. and the customer will have little scope to vary, modify or add any OF any use gl || Sltion* Ph.ig choice. E-mail, on the other hand, allows partice to append * £0 be juggeaenn® |] ndltior “terms and conditions. The customer may e-mail purchase order Websijg eq ¢ heir ies ‘standard terms of purchase and supplier may use the same method © Boung ay (|| i . Whether that addressee is not ing the time of solation but has ment of receipt. on 12 has been to between the NOITRAL Mode! a5 mentioned in section 12 of the IT Act? On close examination of Sections should not 103. Section 12(2) of the IT Act. 3 aystem 104. Section 12(9) of the IT Act. 105. Section 12(1) of the IT Act. 106. Supra note 109. ber L Cyber Law in indig law on 226 te it becomes clear that the test of know} 12 and 13 of the IT Act, it bee Section 4 of the Contract Actas on ty, ications. It is quite possible that the plestronic record 1 eectton communicatyource of the addressee without his knowledge beeag,cnter computer retnat the receipt of the electronic record occurs 19 provides that 1h br resource designated by the addres it enters ‘he ouree has been designated then to the compar cop item. It is only where a computer resource has been aeeressce but the electronic record is sent to a comput Bd drone iesignated one, it can be said that the addressee Caan ne ewe ecord because Section 13 Provides that in thay ledge ot te si of the electronic record occurs at the time, in such situation Sth pee by the addressee. The second alternative ig ti treet it is ammunication of an electronically made offer as complete when ¢he2t the See e ayaa ledgment of the receipt of the offer. One may ar, Offero,.. receives acknowledgment t sent by the offeree implies knowleq Bue that acknowledgment of receip Merce | nowlesnet® the however it may not be always so for two reasons: (2) Section 38 Pavtides that where the originator Pea not agreed with the addres 12 Fe econladeneet be sent in a particular form or method, te that caironese inter alia, may use an automated process for senget® acknowledgment which means, ina given situation, the addresses ae be aware of the ‘electronic record of which acknowledgment receipt pot beon sent (b) receipt of the electronic record may occur at the (ry, hen the the message at the time “ction ved or, Whey hen desi soUFee of ft esignateg by the er Tesource on? has Knowle. ther message enters the computer resource, irrespective of whether is intelligible to or usable by the addressee. The above discussion leads to the conclusi clement necessary for determining the time foi postal communications is irrelevant in case o: ‘The communication of offer is, however, is received by the offeree, notwithstanding the fact that the a ion that’ the © communication f electronic comm Knowledge of offer ir gal position provided in Sectio: has not been changed by the IT Act. inapplicable by implication in case when ce is ‘unicated electronically and it cam new be said that the communication of acceptance is complete at ‘the time when its acknowledgment is received by the acceptor in the sense as Provided in Section 12 of the IT Act and, time when communication \essage at the lication of owledge e communi e acknowledges a enowledgment attributed to the "attribution. The the Contract Act fferor will be free of acceptance is he Contract Act ‘ communication n in case where e said that the me when its as provided in communication | situation, but j 2 Fn 27 .- resource of the addressee. There will bo no time lag, in these per ween dispatch and receipt of the acceptance. Both dispatch and ss, Pe be ‘simultaneous and a complete contract arises when se?! Ggment enters in the computer resource as stated above. This f3oo"at there will be no scope for revocation of acceptance in these ett ts, Section 5 of the Contract Act which provides provision for n of acceptance will be inapplicable in these situations. °° ferent rules will, however, apply where acknowledgment has been toa computer resource which is not the same as that designated by the sett isgee. In this case, communication of acceptance is complete as against sddreferor when the acceptor has dispatched the acknowledgment as the jded in Section 12 of the IT Act and as against the acceptor when, it is proteved by the offeror. This interpretation is possible because dispatch and rcipt is not simultaneous as is the case in the above two situations. Thus fore is a scope for revocation of acceptance which is possible at any time More acknowledgment is retrieved by the offeror and Section 5 of the Contract Act will be applicable. In this situation, it is quite possible that an Skeptance message could be retrieved at the same time as a message fevoking that acceptance where acceptor chooses the same method for wunicating revocation which was used for communicating acceptance. But unlike Section 4 of the Contract Act, complete contract will come into existence only when acceptance is retrieved and not when the acceptance is dispatched.” This interpretation is based on the rationale on which Section 13 of the IT Act rests. Section 5 of the Contract Act will also be applicable in those situations where acknowledgment for one reason or the other has not yet entered into the computer resource. This includes the possibility where dispatch of the acknowledgment has taken place within the meaning of Section 12 of the IT ‘Act, ie. acknowledgment of acceptance has entered into the computer resource outside the control of the acceptor but is still on the system of the intermediary and is yet to enter the designated computer resource or the addressee’s computer resource where no computer resource has been designated. Another possibility will be where acceptance does not enter into the computer resource in the sense as understood in Section 14 of the IT Act due to the malfunctioning of the computer resource. 5 7. Incorporation of Terms by Reference Standard form contracts have been recognised by the courts as a valid means of executing contractual relationship. Various rules have been evolved with the passage of time to mitigate the rigour of terms which were considered either harsh to the opposite party or of which the opposite party’ could not be supposed to have had reasonable notice. Exemption clauses which either limit or exclude liability of the party using the form or impose ‘onerous conditions on the opposite party’ have been regarded as a part of 107 Ta case of postal Cominunications. a complete contract arises when the letter of acceptance is posted and not when it Is received, See supra note 19. 108, Some of them are: reasonable notice, notice contemporaneous with contract, theory of fundamental. breach, unreasonable terms, strict construction, ‘Seo F. Kesntler, Contracts of Adhesion-Some thoughts about Freedom of Contract”, 43 Columbia TR 639 (1943), wee. Cyber Law in 228 "a Dow en if they are not actually Mentioned ; ctr ey satisfy certain tests evolved by the courts, the mae contract prevent a scenario which can be equated te Some exten, Web git contracts presen! tandard form contracts at their early at with, ste by the s' . 1; challenges ree ceincorporation by raferenica ig used ag q »Sttes, | the e exp i ent, 5 ‘ONcig, of describing the situation where aa “than Sen Te ALY to prot = detailed elsewhere, i ‘cing them © iong which are Smmunications are structured in such » way that jo fut Electronic vere exthanped, with each message containing brief 22 Dumb, of message: more frequently than paper document, an ene rarseible. elsewhere. The ‘question ig: °° A emrated by reference a part of the main contract ana if", ert ‘ ces? Shertho IY Act. aves not contain any ‘express provision aff; * tus to terms which are not in the main message but are only y, eh, lepay ie that medeage. ‘There waa no froviaidn in’ tre original UNCTT RS Ted ty Pag also desling with this Situation. However, the Unite i Mods ommission on ‘Trade Law, while realizing thet by virtue aed, Nationg Commission iS iled i d hyper] arties quite frequently provide detaile information not in the =a contents but some where else, made an oxprere Provision in the Model 732 by incorporating Art. 5 bis.™1 ‘A provision like Art, 8 bis of the Model Law is missing ia the TT Ag which is to be provided by way of amendment, The courts in India can take help of the rules establisheq for determining the validity of the exemption clauses in’ statis tec However, it is to be borne in mind that due to the significa difference in the modes of operation between traditional and electronic commerce, the traditional tests evolved by the courts in paper based’ stanme’® form contracts might be ineffective when applied to corresponding electronic commerce terms. That the terms and conditions which will govern a contract must be brought to the notice of the opposite party is a long estshitne, rule, parever, when it comes to contracts made electronically, views diffe or the post may of achieving this. Thanks to the technology, the option wnt io Dring terms incorporated by reference into the notice of the sopeaite party the any and varied. It is now possible to design a web tere requiring the user to scroll through the terms and conditions incorporated by the main at all times, pitpYiwerw ncitral org/english/test/electron/mlechins 110. Ibid. z . ion, in June 1998 111. Article § bis was adopted by UNCITRAL its thirty first session, in June 195 which reads as: information shall not be denice legal effect, validity or enforceability solely on the grounds that it is not contained in the data message purporting give rise to such legal effect, but is merely referred to in that data pac 112. Heather Rowe,” Internet-Enabled Commerce; International Temas ar Ceca {neal MaRMaesl Peatety Sly: ape Yen a ine BS on 118. Graham J.H. Smith, Intemet Law and. Regulstion vend ed.) (Sweet and Maxwel 229 commerce ke P . tery oo thom. The courts may consider this as a reasonable mode to bring ie thers of the notice of the other party. Mai, iat . b sce yr in Electronic Commerce the ‘ wis principles of law pertaining to mistake vitiating consent of the ‘ ie parties provided in the Contract Act are : iene ott where both the parties are under a mistake as a matter of fact ul, be + “Jesential to an agreement, the agreement is void.""* aber | mistake of fact covers mistake as to law not in force in India but tio stistake as to law in force in India does not make a contract a a. M5 x vyoidable. "ms « where only one of the parties to a contract is under a mistake as hat to a matter of fact, contract is not voidable."* ; ne above principles classify mistake into two types: (a) mutual zal ide and (0) unilateral mistake. The courts have now recognised that it to stake gt to categorise mistake in this way." Furthermore, if the above om iste are applied to electronic commerce, many situations will not be a Sd These rules, if applied rigidly, may also prove sometimes oppressive y ved Carty and windfall for the other. For instance, in UK, Argos : for ome a 21-inch television set carrying a company price £ 299 on its ‘te, but by mistake the price was shown only as £ 2.99. The mistake en. One buyer alone placed an Teroticed only after £ 1m orders were tak order for 1700 sets.7* nde is quite possible that a party may be liable for a breach of contract “quichcan be attributed to him technically but which was concluded without his ‘knowledge or authority. Many of these situations would arise without hs Maegligence or carelessness on the part of the either party, to the contract. The maf blem can be well realized by the fact that rance cover in e is also being considered as one of the options for allocatioy In order to. av e-commerce Directive imposes appropriate ‘means that are ¢ gnable him to identify and. correct handling errors an transaction before the conclusion of the contract.” ‘The IT Act has adopted the theory of appearance by applying principles of attribution. It is provided that an electronic record shall be attributed to the originator if it was sent by : (a) the originator himself, (b) a person having authority of the originator, (c) an information system gnitude of the prol the market plac mn or risk."9 : oid such mistakes to surface, European Commission's a duty on the e-merchant to make available fective and accessible to the purchaser to d accidental Tia. Section 20. 115. Section 21. M6. Section 22. 117, Supra note 22 at p. 89. M8. Mike Mahony, et al, E-contract in e-commerce : A Guide to the Law of Electronic Business ed. Stephen York and Kenneth Chia (Butterworths 1999) at p. 19. 119. The Law Commission of New Zealand is currently considering this proposal. See C.C. Nicoll, ‘Electronic Commerce—A New Zealand Perspective,’ The EDI Law Review 6 :5-20, 1999 at p. 8. : 120, COM (1999) 427 Final. > | Cyber Law in indi 4 r 230 OW on int autom, behalf of the originator to operate : programmed by oF on and is Pely.a, Ou ‘yution incorporated in the IT Act is rigid This role of attribution veoy situations such as : where an Addresgog' tt te cause inconven "now that the message received by him is not that, ey, or had reason ‘ere the originator has sent notice to the Addressee the originator on Ng message, that the message received by him is not of before acting upon ‘ent on the face of the record. This inci cr ‘ple where error is apparey owed from the UNCITRAL Mode © puti been . . L of attribution, hee mitigating factors provided in the Model Law whieh, sere pation principles inapplicable in certain situations have ™ at e ‘ake attributitfed in the IT Act. The Model Law has maintained a pal, ben i i ‘timate interests of both the originator as well as Fee ee unjust enrichment of one at the expense of the qiTSe | sng rporating “deeming and assuming clauses". By virtue of the dest;t? dause, a data message is attributed to the originator in the same ying Soe din the IT Act. The assuming clause entitles a person to assy, as | That a data message is that of the originator where : (a) the addres applied properly authentication procedure previously agreed to 4, ee originator,™ (b) the data message resulted from the actions of a pent i who by virtue of its relationship with the originator had access ty = originator’s authentication procedures.125 However, the addressee ig entitle to-act on this assumption only up to the point it received notice from ty originator that the data message was not that of the originator,12 or yp 4° the point when it knew or should have known, had it exercised reasonati, care or used any agreed procedure, that the data message was not that

    You might also like