The Rights of the Deceased: Moral Rights Incidental to Copyright Law
- Vanshika Agrawal
- 2024-04-25
Contents hide
2 Laws Regulating E-commerce in India
3 Laws Regulating E-contracts in India
4 Analysis of Legal Issues that arise in E-commerce
4.1 1. Jurisdictional disputes:
4.2 2. Issues relating to the validity of E-contracts:
E-commerce is “a method of conducting business through electronic means”,[1] thus, it is a business model where people buy and sell and products and services online.[2] E-commerce Law has ushered in the development of several business models under it such as B2B (business to business), B2C (business to consumer), C2B (consumer to business), C2C (consumer to consumer), B2B2C (an intermediary business that connects the first business to the end consumer.[3] This has facilitated globalisation, economic growth and employment opportunities around the world.
Even though the introduction of e-commerce law has been revolutionary, it is necessary to check and balance the industry via laws thatoffer protection and hold accountable each e-commerce player, including consumers. This is especially true for India due to its vast potential owing to its massive economy. Research suggests that the e-commerce law market in India has exponentially grown and will continue to multiply at a high rate.[4] These facts make it pertinent that the country has strict laws and guidelines in place to ensure that the interests of all parties are protected and that there is no mishandling, most importantly of privacy and data protection. This paper will analyse the laws relating to e-commerce and contracts in India.
There are several legislations governing the e-commerce law industry in India. The Indian government has been proactive in passing these legislations and updating India’s legal system concurrently with the fast-paced technological developments in this industry.[5] This has had a positive impact on the country’s e-commerce market growth rate projections.[6] The Information Technology (IT) Act, 2000, forms the principal legislation that governs the internet in India, supervises online conduct, electronic contracts, intermediary liability, etc.[7]
Apart from this, there are several laws that focus solely on specific areas of e-commerce law. Such as the Payment and Settlement Systems Act, 2007, deals with regulating the payment systems in the e-commerce industry.[8] The Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry of the Government of India, also has issued various guidelines regarding foreign direct investment in the e-commerce space.[9] Even the Reserve Bank of India (RBI) publishes regulations regarding payment instruments including e-wallets, credit and debit cards and gift cards which enable online transactions.[10] Additionally, the RBI consistently revises and updates the legal framework required for e-commerce business.[11]
With the help of the internet and globalisation, forming contracts electronically has become a regular occurrence. All the laws surrounding e-contracts are uniform for all kinds of e-commerce contracts, i.e., B2C and B2B – e-contracts for both business models are governed by the same laws.[12] E-contracts are governed by both, the Indian Contract Act (ICA), 1872, and the IT Act, 2000. For an e-contract to be valid, it has to meet all terms and conditions of a valid contract set out in the ICA, such as free consent, valid consideration, lawful object and competent parties of sound mind.[13]
Even the mere browsing of a website (Browse-wrap contract), or clicking “I accept” on the terms and conditions of a website before making an online transaction (Click-wrap contract), amounts to a valid contract under the ICA.[14] The IT Act complements the ICA to provide legal recognition to an e-contract.[15] There is no such central law that imposes stamp duty on e-contracts the way it requires stamp duty on their inked counterparts.[16] This is because the central legislation for stamp duty has not yet been updated to extend to e-contracts as well.[17] However, certain states including Maharashtra and Gujarat have amended their individual state laws to impose stamp duty on e-contracts.[18]
The established judicial precedents mandate that Indian courts may exercise jurisdiction over e-commerce matters even where the goods and services may have been provided from outside India, if the cause of action of the matter arises wholly or partially within India.[19] Even if the contract’s governing law is decided to be some foreign country’s law, and a foreign court has been given exclusive jurisdiction, even then the Indian courts will have the power to entertain the matter.[20] This is because contractual provisions cannot be allowed to override statutory rights.[21] However, the jurisprudence surrounding jurisdiction and enforcement issues in e-commerce and e-contracts is still emerging in India.[22]
There are not many case laws on the topic as yet.[23] As stated above, only the principal of ‘long arm jurisdiction’ is followed on the matter wherein domestic laws will have extra-territorial application if some harm has been effected within the territory of the country.[24] This principle is codified under section 75 of the IT Act to make it relevant for the e-commerce industry.[25] With the exponential growth of e-commerce, the unclear jurisprudence around jurisdictional laws for the industry can create a problem in the future. India must learn from US courts, which has laid down parameters to assess whether or not e-commerce matters falls within their jurisdiction.[26] This could help India boost the e-commerce sector and try to achieve the level and efficiency of the US in this industry.
Click-wrap contract and Browse-contracts could be illegitimate in certain cases. For an e-contract to be valid it has to have all the qualifications of a valid contract under the ICA which includes free consent and competent parties.[27] However, click-wrap contracts and browse contracts cannot qualify as valid contracts under the ICA. The argument is that for a valid contract, the parties must be of sound mind which includes that they must be of majority age.
The internet is a commodity used by all age groups including minors, who tend to be very tech savvy and also participate in transactions such as online shopping. When these minors are accepting the terms and conditions of a website and browsing or engaging in transactions, the click-wrap or browse contracts they may have entered into cannot be held valid as they are not competent parties. Thus, this creates a legal lacuna that must be rectified so that neither the minor nor the website owner suffer from the gap in the law.
3. There is a need for uniform laws regarding the e-commerce sector.[28] Some are different compliance regulations in place in different states in India, which can cause confusion and also help businesses evade necessary regulations because of differing laws in states.[29] There have been prohibitions on sales of certain commodities in individual states, which have been later revers and/or caused backlash in the industry.[30] Having to comply to different state-specific laws creates uncertainties for the e-commerce market and can hamper development – thus, this issue needs to be rectified urgently to promote the ease of doing business in this sector.[31]
E-commerce has provided unprecedented convenience in commercial transactions.[32] It has led to major economic growth for countries around the world and is a massive market in India. This makes it necessary for India to facilitate the ease of doing business for firms that are e-commerce players in its market.[33] The government has been publishing positive regulations to guide the information technology sector and has been quick to update these regulations with new developments.[34] However, it is observed that the enforcement of these laws has been inconsistent,[35] there are gaps in the laws, and there is not much jurisprudence around these laws for them to develop either. Therefore, it is necessary that the present laws governing e-commerce and contracts in India are made
more effective and consistent so that they contribute to the country’s economic development.
[1] E-Commerce in India – Legal, Tax and RegulatoryAnalysis, Nishith Desai Associates (Jan 06, 1:00 PM), http://www.nishithdesai.com/fileadmin/user_upload/pdfs/Research%20Papers/E-Commerce_in_India.pdf.
[2] E-Commerce in India, S.S. Rana & Co. (Jan 06, 3:20 PM),https://ssrana.in/corporate-laws/information-technology-law-india/ecommerce/.
[3]Supra note 1.
[4]Id.
[5] AZB & Partners, E-Commerce in India, Lexology (Jan 07, 5:30 PM), https://www.lexology.com/library/detail.aspx?g=f45d85e6-6618-4b80-a434-61c206a7ac11.
[6]Supra note 1.
[7] The Information Technology Act, 2000, No. 21, Acts of Parliament, 2000 (India).
[8] The Payment and Settlement Systems Act, 2007, No. 51, Acts of Parliament, 2007 (India).
[9]Supra note 2.
[10]Supra note 5.
[11]Id.
[12]Id.
[13] TheIndian Contract Act, 1872, No. 9, Acts of Parliament, 1872 (India).
[14] Aijaj Ahmed Raj&Wazida Rahman, E-commerce Laws and Regulations in India: Issues and Challenges,Research Gate (Jan 07, 7:40 PM), https://www.researchgate.net/publication/330845555_E-commerce_Laws_and_Regulations_in_India_Issues_and_Challenges.
[15]Supra note 7.
[16]Supra note 5.
[17]Id.
[18]id.
[19]Id.
[20]Id.
[21]Id.
[22]Supranote 14.
[23]Id.
[24]Id.
[25]Supra note 7.
[26]Supra note 14.
[27]Supra note 13.
[28]Imminent need for uniform laws for ecommerce in India, Economic Times (Jan. 07, 6:05 PM), https://economictimes.indiatimes.com/industry/services/retail/imminent-need-for-uniform-laws-for-ecommerce-in-india/articleshow/73692139.cms?from=mdr.
[29]Id.
[30]Id.
[31]Id.
[32]Supra note 14.
[33]Id.
[34]Supra note 5.
[35]Id.
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