E-Commerce: An Overview

Author: Ms. Chiraaksha Karla, GGSIPU

People of our generation are enjoying life in unimaginable ways with the recent advancement in the technology pertaining to computer, software, and telecommunications.

Now, the geographical limits don’t exist and information can be shared anywhere with the fastest speed.

And this is where the electronic commerce finds it’s most delightful use in offering a place, time, space, distance, and payment.

The e-commerce I am referring to here is the one which helps in the selling of products or buying of products and also various other services.

So such a business is transacted over the internet.

Enterprise integration is seen to occur through this tool only.

And as the growth of e-commerce has been increasing rapidly, so has been the use of it.

This e-commerce poses various concepts regarding its legal conduct and issues, plus it’s implementation.

E-contracts are though very similar to the traditional or the written form of contract, but they are different in the sense that they are executed online; therefore modeled, specified, executed and deployed by a software system.

Here, vendors present their products with their terms and prices specified. And on the other hand, buyers consider their options, make payments and place orders, plus negotiate the terms and prices wherever possible.

Thus, vendors make the delivery of the purchased product.

Now, we move on to the more legal challenges it brings with it. First of all, let’s talk about the recognition of e-commerce.

The law already recognizes contracts formed using telex etc. & similar other technology.

A contract is legally valid if it satisfies the requirements of laws for formation; there shall be offer, acceptance, consideration and the parties must have intended to create the contract.

One shall take into knowledge the difference that here lies between an offer & invitation to treat. There can a test of intention, and the conductor express confirmation of the buyer will tell the scene.

Then comes the acceptance, where generally drawing the exact line is difficult. The acceptance is only valid, when it is received, hence a failure in the electronic reach to the other side might pose a problem in between.

Now comes the consideration, which is the same as known before. One great challenge here is to maintain extreme security on the route where the payment is being made and the buyer is sharing very confidential information with the sellers.

Here a written confirmation must be sent to the one who has made the payment, and then there shall be an appropriate performance within the specified time and the specified way.

Not just the buyer needs to be protected, but even a seller should also be protected from the rogue purchasers.

Hence, in this way, we shall protect the rights of the consumers against unknown sellers and sellers against unknown buyers.

The 3 forms of online contracts are as follows:

  • Email
  • Websites
  • Online agreements

The two statutes that govern the formation of online contracts are:

  • The Indian Contract Act, 1872
  • The Information Technology Act, 2000

The online contracts are the contracts that are not based on paper, rather than it is based on the electronic form.

The online contract is considered to be a paper-based equivalent of paper-based contracts.

Online contracts are used in e-commerce and e-governance.

They are used due to the following features:

  • Speed
  • Efficiency
  • Convenience

An online contract has to satisfy all the features which are applicable to a valid contract as per the provisions of – The Indian Contract Act, 1872.

The essentials of an electronic contract:

  1. Parties to the contract must be competent to contract.
  2. An offer needs to be made. In many transactions, the offer is not directly made to the offeree.
  3. The consumer comes across with the available goods & services according to his choice. The offer is made by the customer by placing the products in the shopping cart before making the payment, which is actually an invitation to treat.
  4. The offer needs to be accepted. The offer is usually undertaken by the business after the offer has been made by the customer. An offer is revocable until the acceptance is made.
  5. There has to be a lawful consideration. Any contract to be enforceable must have lawful consideration i.e when both the parties give & receive something in return.
  6. There has to be an intention to create legal relations ( intention to contract). If there is no intention to contract, then no contract will be possible between parties.
  7. There must be free and genuine consent. The consent is considered to be free when there is an absence of coercion, undue influence or fraud.
  8. The object must be lawful.
  9. There must be certainty & possibility of performance. A contract to be enforceable must not be vague or uncertain.

The relevant provisions of the – The Information Technology Act governing the online contracts are contained in chapter 4 of the act; which speaks of attribution, acknowledgment & dispatch of an electronic record.

The law provides for authentication of e-record by affixing electronic signature.

The procedure available for forming online contracts:

  1. Email

Offer and acceptance can be exchanged entirely by an email.

  1. Website forms

The seller can offer to sell the products & services by displaying the same on its website.

  1. Online agreements

The users may need to accept an agreement online in order to avail the services by clicking on “I Agree” or “I Accept” button.

Presently in India, e-commerce is developing at a very high speed. Hence, it imposes the need for separate and stringent law, as we see that conventional laws solve the problem.

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