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Validity of Electronic Contracts (E-Contract) in India

"E-contracts are valid and enforceable under the law."

Legality of E-contracts under Information Technology Act 2000

Section 10-A of the Information Technology Act 2000 gives legal recognition to the validity and enforceability of e-contracts. 

It provides 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."

Note: Section 10-A of the Information Technology Act 2000 was inserted by the Information Technology (Amendment) Act, 2008 (10 of 2009) dated 5th February, 2009, which came into effect from 27th October 2009.

Legality of E-contracts UNCITRAL Model Law on Electronic Commerce 1996

Formation and validity of contracts: Article 11 provides that "in the context of contract formation, unless otherwise agreed by the parties, an offer and the acceptance of an offer may be expressed by means of data messages. Where a data message is used in the formation of a contract, that contract shall not be denied validity or enforceability on the sole ground that a data message was used for that purpose."

Definition of Data Message

“Data message” means information generated, sent, received or stored by electronic, optical or similar means including, but not limited to, electronic data interchange (EDI), electronic mail, telegram, telex or telecopy.

“Electronic data interchange (EDI)” means the electronic transfer from computer to computer of information using an agreed standard to structure the information.

Key Points

It is worthwhile to note here that the above provisions not only give legal recognition to the validity of e-contracts but also to the communications in connection with the offers and its acceptance made through electronic means.

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