Is Consumer really a king? ....Almost

The Consumer Protection Bill 2015 that has been introduced in the monsoon session of parliament seeks to replace the existing Consumer Protection Act, 1986. The primary motivation to replace the older law with a new one is to modernize the law with respect to the development of new markets and to further widen the ambit and a scope of the law to deal with consumer matters. incorporate nuances so that the big companies cannot use them as loop holes to exploit the consumers and to further increase the accountability of the said companies.

The new law assumes significant focus as there is growing concern over the safety of consumer products, the reason behind coming up of new Bill was the demand of 80-odd amendments in the 1986 Act. On account of which, the law ministry suggested to bring in the form of a consumer friendly legislation.

With a forward looking approach including protection of consumer’s rights while transacting through e-commerce, this bill has been drafted after extensive consultations with stakeholders. While drafting the Bill, special emphasis has been made to ensure simplicity, speed, access, affordability and timely delivery of justice.

India is spending about 30-50 million US dollars on consumer protection annually and has initiated a number of consumer centric schemes based on the broad fundamentals of consumer awareness, standard and conformity assessment and inexpensive and quick redressal. The recent initiatives for the benefit of consumers include the launch of a portal ‘Grievance Against Misleading Advertisements (GAMA)’ to handle complaints of consumers relating to misleading advertisements, issuance of guidelines on direct selling and online case monitoring system.

Statement of objects and reasons of the Bill

In India, the checks and balances system has been working effectively. However, it has come to notice that some of the Tribunals and Commissions have exclusive provisions where only retired judges of the Supreme Court or the High Courts are being appointed by the executives. This lies absolutely against the spirit of Constitution. The proposed legislation seeks to ensure that the doctrine of checks and balances and right to equality is maintained.

The amendment seeks to remove the provision for appointment of retired judges as the Chairperson and members. Thus, only a sitting judge of the Supreme Court or a High Court, as the case may be, can be appointed for this post if that judge wishes to leave his office of Judge voluntary and assents to join Tribunal or Commission.

The Bill also proposes to insert wherein an advocate with not less than ten years of practice becomes eligible to be appointed as the Chairperson of the Tribunal. The rational of such could be found in our Constitution which provides for appointment of advocates with certain years of practice as Judge of the Supreme Court or a High Court. The same should be applied for consumer forums.

Highlights of the bill

Consumer Dispute Redressal Commissions will be set up at the district, state and national levels for adjudicating consumer complaints.

The key features of the new bill include establishment of an exclusive agency called the Central Consumer Protection Authority (CCPA) to investigate into consumer complaints, issue safety notices for goods and services and protect and enforce the rights of consumers. CCPA has the power to recall products and in extension to that the power to withdraw misleading advertisement.

The Bill classifies six contract terms as ‘unfair’. These cover terms such as

-      Payment of excessive security deposits,

-      Disproportionate penalty for a breach,

-      Unilateral termination without cause; and

-      Any term which puts the consumer at an disadvantage        

The new bill seeks to make manufacturers liable for any injury attributed to the consumer or death of a consumer or property damage and get them sentenced for life.

Key issues and analysis

The Bill empowers the central government to supervise the functioning of, and issue binding directions to the district, state and national consumer redressal commissions.

Commissions-

-      The District Commission, a quasi-judicial body, may be headed by a District Magistrate and the State Commission by a High court Judge, who are a part of the executive. 

-      The National Commission, headed by a judicial member and comprising at least 15 technical or judicial members, will examine complaints on questions of law. 

In order to claim product liability, a claimant must establish four kinds of defects in the product, the injury caused from it, and that it belonged to the manufacturer. The claimant must also establish that the manufacturer had knowledge of such a defect.

Pre-Payment - in order to minimize frivolous litigation there is a mandatory requirement of depositing fifty percent of the total amount that the defendant has been asked to pay in terms of the appealable order in case he intends to prefer an appeal to an appellate Commission.

Penalty for Frivolous Complaint- The penalty for filing a frivolous complaint has also been proposed to be enhanced from INR 10,000/- to INR 50,000/- to discourage frivolous complaints.

Mediation- the Bill introduces the concept of mediation, if it appears to the Commission that there exists possibility of settlement on terms acceptable to both the parties.

Time to dispose- the new Bill requires the Commissions to dispose of the complaint within three months from the date of receipt of notice by the opposite party and within five months where the commodity requires any testing/analysis. The Commissions are required to ordinarily decide the complaint on the basis of affidavits and documentary evidence filed before it and an oral hearing is only allowed when a special cause is shown to exist and the reasons for allowing such request are to be recorded in writing.

Product Liability- the Bill has introduced a much needed concept of affixing liability on a manufacturer or producer and even a product seller in certain specified circumstances for any personal injury, death or property damage caused to a consumer resulting from defects in manufacture, construction, design, formula, preparation, assembly, testing, service, warning, instruction, marketing, packaging, or labeling of any product.

With regard to Jurisdiction for filing a Complaint there is a change with regard to the filing of the consumer complaint in case of more than one opposite parties, the complainant can file the complaint in any of the Commissions where either of the opposite party resides or before the Commission where the complainant himself resides or personally works for gain.

The Bill requires the electronic intermediary to furnish an address for service of the notice(s) on the electronic platform from where it provides services and also to designate a grievance officer authorizing him to access and process such notice(s) and furnish such information, documents or records as may be required under the notice.

Assistance of an Expert- Considering the increasing technological complexities, the National Commission/State Commission can direct any individual/organization or an expert to assist it in the ongoing matters.

Enforceability of the Order- the Bill makes any and every order passed by the District Commission, State Commission and National Commission enforceable as if it were a decree passed by a court in a suit pending before it.

The District Commission and the State Commission are given power to review their orders in case there is an error apparent on the face of it.

Higher Pecuniary Jurisdiction- Pecuniary jurisdiction of the District, State as well as National Commission has been proposed to be enhanced to INR Fifty Lacs or up to thrice the limit of such value as may be prescribed, for state INR Ten Crores or up to thrice the limit of such value as may be prescribed and for national commission INR Ten Crore and or up to thrice the limit of such value as may be prescribed.

Conclusion

Consumer protection laws in India are a form of government regulations that aim to protect the rights of consumers. The influencing businesses are supporting consumer needs to get a better response, however not every business is consumer focused. To give effect to the better enforcement of consumer rights inviting the new legislation with filling the pit falls of the 1986 Act was essential. The new bill is designed to protect the consumers from the businesses that engage in fraud or specified unfair practices along with the above mentioned concepts introduced, thus the proposed legislation seeks to provide a comprehensive framework to protect consumer interest.

Note: the draft Bill is pending with the Standing Committee of Food and Consumer Affairs.

Waves of change- introducing new admiralty law

India is the leading maritime nation and maritime transportation caters to about 95% of its merchandise trade volume. After Independence there has been no change in laws regulating this sector. The Union Cabinet under the Chairmanship of Prime Minister Shri Narendra Modi has given its approval to the proposal of Ministry of Shipping to enact Admiralty (Jurisdiction and Settlement of Maritime Claims) Bill 2016 and to repeal five archaic admiralty statutes.

The Admiralty(Jurisdiction and Settlement of Maritime Claims) Bill, 2016 was introduced in Lok Sabha on November 21, 2016 by the Minister of State for Shipping, Mr. Mansukh Mandaviya. It seeks to consolidate the existing laws on civil matters of admiralty jurisdiction of courts, admiralty proceedings on maritime claims, and arrest of ships. Admiralty laws deal with cases of accidents in navigable waters or involve contracts related to commerce on such waters. 

The earlier legislations came into force during the colonial era when India had only three major ports, Bombay, Calcutta and Madras. Therefore, at present, matters related to admiralty can be decided only by the High Courts of Bombay, Calcutta and Madras, even though there are 12 major ports and 205 minor ports in India.

 This Bill seeks to repeal five British statues on admiralty jurisdiction in civil matters, namely, (a) the Admiralty Court Act, 1840 (b) the Admiralty Court Act, 1861, (c) Colonial Courts of Admiralty Act, 1890, (d) Colonial Courts of Admiralty (India) Act, 1891, and (e) the provisions of the Letters Patent, 1865 applicable to the admiralty jurisdiction of the Bombay, Calcutta and Madras High Courts.

Shipping industry is growing rapidly and investments to the tune of Rs 8 lakh crore are needed in the coming years to generate employment and boost India's shipping industry.

Object of the Bill

This Bill is introduced to consolidate the laws relating to admiralty jurisdiction, legal proceedings in connection with vessels, their arrest, detention, sale and other matters connected therewith or incidental thereto. It also aims to replace archaic laws which are hindering efficient governance. The Bill confers admiralty jurisdiction on High Courts located in coastal states of India and this jurisdiction extends upto territorial waters (i.e. 12 nautical miles).

Highlights of the Bill

-       Admiralty jurisdiction: The jurisdiction with respect to maritime claims under the Bill shall be with the respective High Courts and will extend up to the territorial waters of their respective jurisdictions. The Bill exceeds the current jurisdiction of the High Court of Bombay, Calcutta and Madras extending now to the High Courts of Karnataka, Gujarat, Orissa, Kerala, Hyderabad, and any other High Court notified by the central government. 

High Courts of all the coastal states shall exercise admiralty jurisdiction over maritime claims which include several aspects not limited to goods imported and chattel as earlier, but also other claims such as payment of wages of seamen, loss of life, salvages, mortgage, loss or damage, services and repairs, insurance, ownership and lien, threat of damage to environment etc.

-       Maritime claims: The High Courts may exercise jurisdiction on maritime claims arising out of conditions including: (i) disputes regarding ownership of a vessel, (ii) disputes between co-owners of a vessel regarding employment or earnings of the vessel, (iii) mortgage on a vessel, (iv) construction, repair, or conversion of the vessel, (v) disputes arising out of the sale of a vessel, (vi) environmental damage caused by the vessel, etc. 

-       Priority of maritime claims: the bill provides for prioritization of Maritime Claims and maritime liens while providing protection to owners, operators, charterers, crew members and seafarers at the same time.  The highest priority will be given to maritime claims, followed by mortgages on the vessel, and all other claims. Within maritime claims, the highest priority will be given to claims for wages due with regard to employment on the vessel and to payment of wages of the seafarers. The claims will have the same effect even when there is change of ownership of the vessel.

-       Jurisdiction over a person: Courts may exercise admiralty jurisdiction against a person with regard to maritime claims. However, the courts will not entertain complaints against a person in certain cases. These include: (i) damage, or loss of life, or personal injury arising out of collision between vessels that was caused in India, or (ii) non-compliance with the collision regulations of the Merchant Shipping Act, 1958 by a person who does not reside or carry out business in India. Further, Courts will not entertain action against a person until any case against them with regard to the same incident in any court outside India has ended. 

-       Arrest of vessel: The courts may order for the arrest of any vessel within their jurisdiction for providing security against a maritime claim which is the subject of a proceeding. They may do so under various reasons such as: (i) owner of the vessel is liable for the claim, (ii) the claim is based on mortgage of the vessel, and (iii) the claim relates to ownership of the vessel, etc. 

The Bill also provides for protection against wrongful and unjustified arrest and has provision for transfer of cases from one High Court to other High Court

-       Appeals: Any judgments made by a single Judge of the High Court can be appealed against to a Division Bench of the High Court. Further, the Supreme Court may, on application by any party, transfer an admiralty proceeding at any stage from one High Court to any other High Court. The latter High Court will proceed with the matter from the stage where it stood at the time of the transfer.

-       Assessors: The central government will appoint a list of assessors qualified and experienced in admiralty and maritime matters. The central government will also determine the duties of assessors, and their fee they will assist the judges in determining rates and claims in admiralty proceedings. 

Conclusion

This bill will serve the long awaited enactment and regularize this branch of law i.e. laws relating to carriage of goods by sea, marine insurance, laws of ownership and registration of ships, ship sale and ship building contracts, ship financing, etc. the international characters of Maritime law, although heavily indebted to general principles of international law, is subject to local laws and thus it is vital for that the local laws to be more clear.  By passing this bill, India is heading towards the potential direction of making maritime law regularized.

Housing for all by 2022, because every soul craves for a home to come back”

The government's efforts to boost affordable housing in order to reach the objective of “Housing for All by 2022” have roared the best possible results. All indicators including the much-needed supply, pick-up in housing loans and sales in this category are heading towards the targeted direction. The burden of price rise has occurred enormously due to this maintaining & enhancing affordability is essential.

The population pressure in urban areas is higher than the rural areas, majorly in the cities of Mumbai, Delhi and Kolkata. The object is to develop Tier II cities of Pune, Ahemdabad, Hyderabad, Bangalore, etc. along with rural areas to ensure that the population pressure shifts from overpopulated cities. The government is collaborating with private builders and developers under a public-private partnership (PPP) model to make this dream come true. Many developers have responded positively in this upcoming segment of the real estate sector on account of benefits enjoyed by them over the Pradhan Mantri Awas Yojana (PMAY). The Ministry of Housing and Urban Poverty Alleviation defines affordable housing on the basis of size of a unit, its price and the income of a household.

The government has provided 39 percent higher allocations for affordable housing development in Financial Year of 2017 under the PMAY. Moreover, it has extended the Credit Linked Subsidy Scheme for housing loans of value up to Rs. 12 lakh. And, while the government has traded a number of steps to meet the demand with supply and undertake the affordability issues for the middle- and lower-income stratum, it has accorded infrastructure status to the affordable housing segment in this year’s budget. Developers who build affordable homes are exempted from paying taxes on their profits for five years starting 2016 instead of three years. These are for 300 sq ft homes in the four metro cities and 600 sq ft in non-metro areas.  

On account of the real estate regulations, this field is fixing more credibility, property investors focusing heavily on affordable housing for the intended income groups. Affordable housing is now a highly profitable long-term proposition for real estate investors, and developers also stand seriously for profit creation. However, targeting appropriate cities suffices the trend of nuclear families which is increasing in the metropolitan cities where IT and other major corporate sectors are located. In cities like, Chennai, Thiruvananthapuram, Navi Mumbai, Gurugram, Noida and Pune, young professionals are desirous to own homes as new job opportunities are offered in them. Affordable housing will be a major hit in these cities as it shall benefit both ways i.e. developers and purchasers.

The crux of the scheme will include, Eligibility for the scheme, Size of unit of affordable houses, location of houses i.e. metros vs non-metros, construction and repurchase projects, benefits to women, etc.  

This translates into easy financial credit for builders and makes it a lucrative segment for them to invest in. The affordable housing segment in India is set to grow at a faster pace than the rest of the real estate sector- at over 30 percent in the medium term- and will be the key growth driver for the Indian mortgage finance market.

Bodies for housing development

-       Members of builders body the Confederation of Real Estate Developers Association of India (CREDAI) have announced launching total 375 affordable housing projects across the country with investment commitment of Rs 70,000 crore. It has become the preferred platform with regard to national discourse on Housing and Habitat through strong networking with Government, Policy Makers, Investors, Financial Institutions and Real Estate Developers. Its initiatives have been fruitful in liberalization of FDI and investment regimes, streamlining of approvals and creation of financial instruments culminating in the goal of housing for all by 2022.

Several incentives for affordable housing including the infrastructure tag, extension in timeline for project completion and with regards to size of these houses have been helpful in drawing interest for all the stakeholders including developers, financiers and homebuyers. Ahmedabad was the largest contributor of affordable homes (costing less than Rs 30 lakh), followed by Pune (up to Rs 50 lakh).

-       National Real Estate Development Council (NAREDCO) established under the of Ministry of Housing and Urban Affairs, is the apex national body for the real estate industry and visualized it as a single platform where Government, industry and public would discuss various problems and opportunities face to face which would result in speedy resolution of issues. It is inducing transparency and ethics in real estate business and transforming the Indian real estate sector into a matured and globally competitive business sector.

-       National Housing Bank (NHB), a wholly owned subsidiary of Reserve Bank of India (RBI) is an apex financial institution for housing. It has been established with an objective to operate as a principal agency to promote housing finance institutions both at local and regional levels and to provide financial and other support incidental to such institutions and for matters connected therewith. NHB registers, regulates and supervises Housing Finance Companies, keeps surveillance through On-site & Off-site Mechanisms and co-ordinates with other Regulators.

Share prices of real estate and cement companies have already been moving up on account of this major affordable housing push. According to a recent report published by India Ratings and Research- demand for affordable housing will increase to 25 million homes in the next five years, opening up a market opportunity valued at Rs 6 lakh crore for housing finance companies (HFCs).

Conclusion

The matter of concern to do this include government support in terms of land for this segment for affordable housing which remains a big challenge and we need to see more land being either supporting the developers to acquire the land or providing in some kind of partnership with the developers to make more and more houses available in this segment where the borrowers can actually buy.

The efforts announced by the government for economically weaker sections and low-income groups to boost mass housing in peripheral areas with attractive interest subventions have helped a great deal. These drivers, along with the industry's efforts to create awareness, are helping expand financial inclusion. 

Chase the Sun- International Solar Alliance (ISA)

To revise economic thinking and give full value to our natural resources, let solar energy conquer everything!

India has initiated to actively encourage the use of solar power on a large scale in place of fossil fuels in order to honour its climate change commitments. On the first day of the COP(Conference for parties)-21 summit (Jan 2016), the International Solar Alliance (ISA)- a union of countries with abundant sunlight, having its headquarters in Gwal Pahari, gurugram, was launched by the Indian PM Narendra Modi which was later supported by the French President Francois Hollande. Under this alliance, 121 countries that fall within the tropics, between Tropic of Cancer and Tropic of Capricorn, have been invited to make collaborative efforts to harness solar energy to generate the electricity. Most of these countries fall within Asia, Africa and South America. The ISA is focused on promoting and developing solar energy and solar products.

The chief objectives behind the International Solar Alliance- First is to force down prices of existing energy sources by driving demand for solar energy, secondly to bring standardization in solar technologies and lastly to foster research and development for growth and optimum utilization of the solar energy.

The leading activities covered by the organization will include Campaigning/awareness raising, knowledge dissemination and exchange of the effective technologies.

World Bank- a helping hand

In the visit of the World Bank President to India, the Interim Administrative Cell of the International Solar Alliance (ISA Cell) and the World Bank declared their intention to promote solar energy globally.  

 The Joint Declaration among the ISA cell and the World Bank will help in accelerating mobilization of finance for solar energy, and the Bank will have a major role in mobilizing more than US $1000 billion in investments that will be required by 2030, to meet the common goals of massive deployment of affordable solar energy.

The World Bank Group is helping India to deliver on its plans with more than $1 billion by lending over in FY 2017, this is by far largest-ever support for solar power in any country. The World Bank is also backing the India-led International Solar Alliance which aims to promote solar use globally.

Let the private sector bloom

The ambient objective of this initiative is to create a collaborative platform for increased deployment of solar energy technologies to enhance energy security & sustainable development, improve access to energy and opportunities for better livelihoods in rural/remote areas and to increase their standard of living by way of supplying required energy means.

Leading pinpoints of the ISA include-

• Developing a roadmap to mobilize financing for companies indulged in solar sector,
• Developing financing instruments including credit enhancement, reduce hedging costs/currency risk, bond raising in locally denominated currencies etc. which support solar energy development and deployment,
• Supporting plans for solar energy through technical assistance and knowledge transfer,
• Working on mobilization of concessional financing through existing or, if needed, new trust funds,
• Supporting re-investment events.

The ISA will help sun-rich countries to address their special energy needs and will provide a platform to collaborate on addressing the identified gaps through a common approach. The Solar Alliance seeks to unite countries, situated partly or completely between the Tropic of Cancer and the Tropic of Capricorn, which enjoy more than 300 days of sunshine a year, for the purpose of obtaining solar technology cheaply from the US, Germany and Japan, the leaders in photovoltaic panels. The focus is on solar power utilization & by launching such an alliance in Paris a strong signal is given to global communities about the sincerity of the developing nations towards their common concern about climate change and to switch to a low-carbon growth path.

The Indian government intends to promote extensive private sector involvement in the International Solar Alliance, as ultimately, Human beings are going to be relying on natural resources for a long time.

Soon after the commencement, ISA has increased significantly- two Programs of the ISA namely, Affordable finance at scale and Scaling solar applications for agricultural use, have been launched successfully. In addition to this USA, UK and EU have profound interest in developing additional programs. Further, Interim Administrative Cell of ISA and the United Nations Development Programme have joined hands for promoting its objectives in 121, ISA member countries. Apart from this, establishment of 24x7 knowledge centre is under way with the help of UNDP and National Informatics Centre, Government of India.

Activities to be conducted by ISA:

• Collaborations for joint research, development and demonstration, sharing information and knowledge, capacity building, supporting technology hubs and creating networks.
• Acquisition, diffusion and indigenization and absorption of knowledge, technology and skills by local stakeholders in the member countries.
• Creation of expert groups for development of common standards, test, monitoring and verification protocols.
• Creation of partnerships among country specific technology centres for supporting technology absorption for promoting energy security and energy access.
• Exchange of officials/ technology specialists for participation in the training programmes on different aspects of solar energy in the member countries.
• Encourage companies in the member countries to set up joint ventures.
• Sharing of solar energy development experiences, analysis on short- and longer-term issues in key energy supply, financing practices, business models particularly for decentralized applications and off-grid applications, including creation of local platforms focusing on implementation solutions and grass root participation.
• Establish new financial mechanisms to reduce cost of capital in the renewable energy sector and innovative financing to develop; and
• Collaborate with other multilateral bodies like International Renewable Energy Agency (IRENA), Renewable Energy and Energy Efficiency Partnership (REEEP), International Energy Agency (IEA), Renewable Energy Policy Network for the 21st Century (REN), United Nations bodies; bilateral organizations; Corporates, industry, and other stakeholders can contribute towards the goal of increasing utilization of solar energy in ISA member countries."

Conclusion

Thus, ISA is an important alliance for the future and what is done today is not just an agreement but a new chapter in the future economic history of the world. The delighting factor for effective use of ISA is that wider deployment will indeed reduce production and development costs, facilitating the increased deployment of solar technologies to poor and remote regions. India’s plan to ramp up solar power generation to 100 GW by 2022 is among the largest in the world and it will help to bring about sustainable, clean, climate-friendly electricity to millions of Indians.

We can no longer accept the paradox that countries with the most sun have the least energy. Therefore by placing a big bet on solar energy- climate justice, reduction of costs, regional and global issues of mutual interest will be solved.

Remember: The grass is greener where you water; sun will be useful if we utilize.

IT’S SUPPOSED TO BE AUTOMATIC, BUT ACTUALLY YOU HAVE TO PUSH THE BUTTON.

With the technological advancement, the electronic commerce has gained momentum in a dashing speed. When it comes to business no physical boundaries, no writing, hand signature, etc. are required anymore. It offers the flexibility to business environment in terms of place, time, space, distance, and payment. Furthering to the enhancement of the growth in e-commerce, e-contracts are entered day in & out. E-contract is a contract modeled, framed, specified, executed and deployed by any software system. Conceptually e-contracts are in consonance to that of traditional commercial contracts. However, ignorance of the common man about the fast changing technology does not grease the wheels for optimum utilization of this betterment.

Validity of E-Contracts & its relevance under Indian contract Act

Indian Contract Act, 1872, is applicable to contracts in general. Therefore, an electronic contract also cannot be validly executed unless it satisfies all the essentials of a valid contract.

-       Section 10 of the IT Act, 2008 gives legislative authority to E-contracts. It says that, Where in a contract formation, the communication of proposals, the acceptance of proposals, the revocation of proposals and acceptances, as the case may be, are expressed in electronic form or by means of an electronic record, such contract shall not be deemed to be unenforceable solely on the ground that such electronic form or means was used for that purpose.

-       The two parties to an e-contract are- the originator and the addressee. According to the IT Act, 2008-

o  Originator is a person who sends, generates, stores or transmits any electronic message to be sent, generated, stored or transmitted to any other person and does not include an Intermediary.

o  An Addressee is a person who is intended by the originator to receive the electronic record but does not include any Intermediary.

-       An offer and acceptance has to be made- The law already recognizes contracts formed using facsimile, telex and other similar technology. An agreement between parties is legally valid if it satisfies the requirements of the law regarding its formation, i.e. that the parties intended to create a contract primarily.

o  Example: When consumers respond through an e-mail or by filling in an online form, built into the web page, they make an Offer. The seller can accept this offer either by express confirmation or by conduct.

-       Unequivocal unconditional communication of acceptance is required to be made in terms of the offer, to create a valid e-contract. The critical issue is when acceptance takes effect, to determine where and when the contract comes into existence. The general receipt rule is that acceptance is effective when it comes to the notice of the party making the offer.

-       here should be a lawful consideration- Contracts result only when one promise is made in exchange for something in return. This something in return is called ‘consideration’. The present rules of consideration apply to e-contracts. There is concern among consumers regarding Transitional Security over the Internet.

-       Intention of the parties to enter into the e-contract is a must.

-       There should be a free consent between the parties to enter into the e-contract there is a limited scope of negotiation in as the end user/accepting party has limited options.

-       The object of the agreement should be lawful.

-       Parties must be competent to enter into the contract.

-       And lastly, contract must be enforceable by law.

If an electronic contract has been formed over a series of electronic communications where the essential elements of the contract are captured separately, then proper maintenance of all such electronic records and emails becomes essential to prove the record of the contractual arrangement between the parties.

Types of E-Contracts

E-contracts can be entered into by any software system, however the most common one’s include-

-       Browse wrap agreements- This agreement is considered as a browse wrap agreement which is intended to be binding upon the contracting party by the use of the website. These include the user policies and terms of service of online shopping websites and are in the form of a “terms of use”, a “user agreement” or “terms of service”, which can be used as the links at the corner or bottom of website.

 -       Shrink Wrap agreements are those which can only be read and accepted by the consumer after the opening of a particular product. The usage of the product deems the acceptance of the contract by the consumer. The term is described after the shrink wrap plastic wrapping that is used to cover software or other boxes. Example: downloading a copy of Acrobat from Adobe's Website.

-       Click Wrap agreements which are mostly found in the software installation process, are contracts where the user has to click either ‘Accept’ or ‘Decline’ to take or leave the agreement. They lack bargaining power. Choosing to make payments online or choosing to reject it is an example of using a click wrap agreement.

-       Over mail contracts- Sometimes the contractual understanding is not consolidated in a single document, but can be in the form of a serious of E-mails. This clears that contracts made over emails are legally binding.

-       Counterparts signed contacts- When it is impossible/not permissible for the parties to meet physically due to residence in different locations, then in such cases the agreed version of the contract can be signed and be sent to the other party in the form of scanned copy for reference. In such cases, there can be multiple physical copies of the contract each signed by a party are called as counterparts.

E-Signature

The E-signatures (digital signature) are identified to be legally valid. It functions for electronic documents like a handwritten signature and asserts that the named person agreed to the document to which the signature is attached.

Digital Signatures: Section 2(p) of The Information Technology Act, 2000 defines digital signatures as authentication of any electronic record by a subscriber by means of an electronic method or procedure.

The fundamental drawback of online contracts is that if there is no alternate means of identifying a person on the other side than digital signatures or a public key, it is possible to misrepresent one’s identity and try to pass of as somebody else. Secure digital signatures cannot be repudiated the signer of a document cannot later disown it by claiming the signature was forged. In other words, digital signatures enable "authentication" of digital messages, assuring the recipient of a digital message of both the identity of the sender and the integrity of the message.

Jurisdiction of courts in E-Contracts

Section 13 of the IT Act governs the provisions relating to the time and place of dispatch and receipt of an electronic record, and addresses the issue of deemed jurisdiction in electronic contracts, as under view of the foregoing, the place of contract in an e-contract for the purposes of determining jurisdiction (i.e., the place where the cause of action arose) would be deemed to be where the originator has his place of business and where the addressee has his place of business. However, since Section is subject to the mutual agreement of the contracting parties with respect to the agreed place of contract, it is recommended that all parties in their electronic contracts provide for a specific clause on jurisdiction. The determination of territorial jurisdiction for e-contracts becomes complicated in the absence of geographical or national boundaries for execution and implementation of such contracts.

Conclusion

E-commerce is expected to improve the productivity and competitiveness of participating businesses by providing unprecedented access to an on-line global market place with millions of customers and thousands of products and services.

With the e-commerce boom and the growing trend of commercial transactions being concluded by way of internet, execution of contracts by electronic means has become quite prevalent. The common legislative and judicial intent appears to be clear that any legally valid acts that are ordinarily performed would continue to be valid even if performed electronically or digitally, as long as such electronic/digital performance comprises of all the attributes of legally valid contract.

After all we can’t solve problems with the same kind of thinking!