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Indian Contract Act and Internet Transactions

Nov 18, 2014

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CYBER LAWS NALSAR PROXIMATE EDUCATION NALSAR UNIVERSITY OF LAW, HYDERABAD

I N DI AN C ON TR AC T AC T A N D I TS A PP LI C A BI LI TY OF IN TER N ET TR AN S A C TI ON S -A C R I TI C A L R EV I EW

M ODULE- ISubmitted by

A R U N

TEJA DOPPALAPUDI

CLH15_09

INDIAN CONTRACT ACT AND ITS APPLICABILITY INTERNET TRANSACTIONS

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INTRODUCTION

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TABLE OF CONTENTS

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Introduction Objective Methodology Important concepts under Indian Contract Act 1872

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Overview of the Information Technology Act 2000

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Validity of Authentication and the Digital signatures in the Contracts

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Jurisdiction and place of suing for Breach of Internet contracts Conclusion Bibliography

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The Indian Contract Act came into force on the first day of September, 1872, prior to the enactment, the law relating to contracts as applied in India was wanting in uniformity and certainty. The English Law so far as it was suitable to local circumstances, was introduced into the Presidency towns of Madras, Bombay and Calcutta by the charter granted in 1726 by King George I to the East India Company. In 1781 the Act of settlement passed by the British Parliament provided the questions of inheritance and succession, and matters of contracts and dealing with the parties should be determined in the case of Mohammedans and Hindus by their respective laws, and where only one of the parties should be a Mohammad an or a Hindu .the rule in the presidency Towns. In the moffusil, that is, outside the presidency Towns, there was no law of contracts as such and suits involving questions of contract where to be decided according to justice, equity and good conscience. The Contract Act dealt with .Sale of goods, indemnity and guarantee, Law of bailment, Agency and Partnership Act. To understand the contracts in the internet transactions and the electronic contracts one has to have a basic knowledge of the Indian contracts Act , and also the brief knowledge of the various procedures to enter in to the contracts for the softwares and the internet transactions. The overview of the IT act 2000 is explained in the coming pages and the IT Act 2000 has opened the doors for the people to have transaction in the Internet as faster pace and the punishments for the violations of the contracts and the breach and the restitution for the damages and this can be explained by the and the Indian Penal code also gives some guidelines for the penal actions under the violations of the Contracts under the economic offences

ObjectiveThe objective of this submission is get the insight of various aspects of the

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1) Indian contract Act 1872

2) Internet transactions 3) Information Technology Act 2000 4) Validity of the Digital Signatures in the internet transaction

Methodology

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This Paper is a step towards the understanding of the Indian contract Act 1872 and various aspects of the internet transactions and the relation of the Indian contract Act to the internet transactions Complex legal issues arising in the internet are leading to the development of the Cyber Law. An in India the concepts of the Indian Contract are taken to curb the frauds done in the internet transactions , Internet per se raises various important legal issues, which require specific regulation by countries before the process of e-commerce can really become a success, there have been many countries which have enacted cyber laws for promoting e-commerce, however a majority of the countries still are in the dark in this area and have not started legislating Cyber laws, Countries must provide legal recognition of the electronic format, In addition, there has to be general recognition that wherever any law prevailing in the country requires anything to be in writing or hand written or printed or type written form, then not withstanding anything contained in any such law for the time being in force, such requirement of law shall be deemed to be satisfied if the concerned information or matter is rendered or made available in the electronic format or remains accessible so as to capable of being used for subsequent references. Developing countries need to take lesson from the fact that when they enact a legislation concerning authentication of electronic records, they should not become technology specific but should adopt a technology neutral legislation. It would be prudent for the countries to use the words electronic signature as contrasted with the words digital signature in order to demonstrate technology neutrality. In this project we are going to learn about the internet contracts and its relation to the Indian contract and its remedies relating to the breach of the contracts.

Important concepts under the Indian Contract Act 1872Contract which is enforceable by law Indian Contract Act.1872.

INDIAN CONTRACT ACT AND ITS APPLICABILITY INTERNET TRANSACTIONSThe Indian Contract Act 1872-s 10 states;

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S10.what agreements are contracts; All agreements are contracts if they are made by the free consent of parties competent to the contract, for a lawful consideration and what a lawful object, and are not hereby expressly declared to be void. Nothing herein contained shall affect any law in force in India, and not hereby expressly repealed, by which a contract is to be made in writing or in presence of witnesses, or any law relating to the registration of documents. Let us consider the various aspects of the contract to become the valid contract. 1. Free and conscious consent of the parties to the contract: In other words there should not be any coercion, undue influence, fraud misrepresentation or mistake which will not be considered as free consent and will be considered as free consent and will be considered as void. 2. Persons entering to the contract should be competent: In other words persons who are minors by law, persons with unsound mind are not competent and any contract entered with them is nonenforceable. 3. Lawful consideration: In other words any contract which is violative of any other law or considerations which not legal will not be valid and will be void

4. Lawful Object: The purpose of any such contract has to be lawful in its object or else will berendered as void. From this one can infer that a contract enforceable law is a process, which has a vital significance in any transaction whether it is manufacturing trading or service. The significance of the contract assumes importance in the cyber world where anonymity and speed of transactions are key elements. The Indian Contract Act section1 deals with the proper law of contract to create legally binding contract based on the agreement and such agreement and such agreement and proper law takes its validity on the following: The place of contracting The place of performance The place of residence

INDIAN CONTRACT ACT AND ITS APPLICABILITY INTERNET TRANSACTIONSThe subject matter of Contract An Agreement, Sec 2(h) of ICA enforceable at Law is a Contract. Agreement Every promise and every set of promises forming the consideration of each other. Every contract is an agreement. But not all agreements become contracts For an agreement to become a Contract, the following Conditions must be satisfied. a) There is some consideration for it b) The parties are competent to consent c) Their consent is free. d) Their Object is lawful. e) Parties intend entering into legally binding obligations. The next step for a contract is the

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Proposal or an offer When one person signifies to another his willingness to do anything with a view to obtain the assent of that other to such act or abstinence, he is said to make proposal General Offers:Offers must be to the ascertained persons but on the case of the general offers in the internet or the advertisements given in the public need not be to ascertained persons in one of the case law the offer is merely states that it is acceptance when the product is brought Case law 1 Carlill V.Carbolic Smoke Ball & co Facts of the case 1. The company gave an advertisement in the newspaper that anyone who uses the pills produced by the company will get out of the influenza and other ailments. 2. The defendant also stated that if the product is used by the patients and if they follow the procedure accordingly to the instructions given in the back of the wrap they will definitely get relived from the ailments. 3. The defendant also gave an offer that if the patients use these products according to the instructions and if they dont get relieved by the diseases they will pay the amount 200 pounds as the compensation in order to prove their confidence.

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4. The Applicant A used the medicine for the purpose of preventing the ailments caused to her and strictly followed the instructions given on the wrap 5. But the ailments did not get reduced so she asked for the compensation 6. The Applicant stated that the offer is only to create the confidence in the patients who use it. Judgement The Court gave a judgement in favour of the applicant stating that the offer can be made to any of the unascertained persons, who merely accept the offer by performing the conditions; no matter he did not actually communicate it. And asked the company to pay the amount of offer made by them. The cross offers do not give rise to the contract as they are considered as void, The next important step is:Communication and Acceptance in Contract:Section 2(h) When the person to whom