Posted November 10, 2013 by advocateguru in Learning Centre

Online Contracting



Introduction : Contracts have become so common in daily life that most of the time we don’t even realize that we have entered into one. Right from hiring taxi to buying airline tickets online, innumerable things in our daily lives are governed by contracts.

The Indian Contract Act, 1872 governs the manner in which contracts are made and executed in India. It governs the way in which the provisions in a contract are implemented and codifies the effect of a breach of contractual provisions.



Electronic Contracts : (Contracts that are not paper based but rather in electronic form) are born out for speed, convenience and efficiency.


Essentials of an Electronic Contract


As in every other contract, an electronic contact also requires the following necessary ingredients:

  1. An offer needs to be made – In many transactions the offer is not made directly one to one. The consumer browses the available goods and services displayed on the merchants websites and then chooses what he would like to purchase.


The offer is not made by website displaying the items for sale at a particular price. This is actually an invitation to offer and hence is revocable at any time of acceptance. The offer is made by the customer on placing the products in the vital ‘basket’ or ‘shopping cart’ for payment.


  1. The offer need to be accepted: As stated earlier, the acceptance is usually undertaken by the business after the offer has been made by the consumer in relation with thw invitation to offer. An offer is revocable at any time until the acceptance is made.
  2. There has to be a lawful consideration: Any contract to be enforceable by law must have lawful consideration i.e, when both parties give and receive something in return. Therefore, if an auction site facilitates between two parties one person provides a pornographic movie as consideration for purchasing an mp3 player, then such a contact is void.
  3. There has to be intention to create legal relations: If there is no intention on the part of the parties to create legal relationships, then no contract is possible between them. Usually, agreements of a domestic or social nature are not contracts and therefore are not enforceable, e.g a website providing health related information and tips.
  4. The parties must be competent to contract: Contacts by minors , lunatics are void. All the parties to the contract must be legally competent to enter into the contract.
  5. There must be free and genuine consent: Consent is said to be free when there is absence of coercion, misrepresentation, undue influence, or fraud. In other words, there must not be any subversion of the will of any party to the contract to enter such contract.
  6. The object of the contact must be lawful
  7. There must be certainty and possibility of performance.