UNIT 4
UNIT 4 E- CONTRACTS (E –TRANSACTION / E-COMMERCE)
INTRODUCTION
The models of ecommerce and e-contracts have introduced revolutionary innovations to businesses, management, interregional and international trade. At this juncture we need to ascertain whether the legal framework in India adequately addresses to the concerns of the stakeholders.
Since the web is not any more secluded for just mere communication or computing and analyzing of information, online contracts are not any w the order of the day and there are no differences between online and offline contracts. Hence, online contracts are still contracts and every one the principles of contracts will still apply.
The online contract formation uses a communication technology which involves numerous intermediaries such as Internet Service Providers (ISPs). Imagine a contract that an Indian exporter and an American importer wish to enter into. One option would be that one party first pulls up two copies of the contract, signs them and couriers them to the other, who successively signs both copies and couriers one copy back. the other option is that the 2 parties meet someplace and sign the contract.
In the electronic age, the entire contract is often completed in seconds, with both parties simply attaching their digital signatures to an electronic copy of the contract. There's no need for delayed couriers and extra travelling costs in such a situation. There was initially a hesitation amongst the legislatures to recognize this modern technology, but now many countries have passed laws to recognize electronic contracts.
DEFINITION:
Under the provisions of the information Technology Act, 2000 particularly Section 10-A, an electronic contract is valid and enforceable. the sole essential requirement to validate an electronic contract is compliance with the required pre-requisites provided under the Indian Contract Act, 1872.
Also, the courts in India give due reference to electronic contracts under the provisions of the Indian Evidence Act, 1872.
The provisions of the information Technology Act, 2000 (IT Act) give legal recognition to an electronic (E -Contract) particularly section 10-A of the IT Act which states:
"Section 10-A: Validity of contracts formed through electronic means. -
Where during a contract formation, the communication of proposals, the acceptance of proposals, the revocation of proposals and acceptances, because the case could also 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 bottom that such electronic form or means was used for that purpose."
The above provision was introduced by the information Technology (Amendment Act), 2008 after recognizing the growing dependence on electronic means to succeed in commercial agreements. this is applicable where contract formation, communication of the proposal and acceptance is administered electronically.
WHAT IS E CONTRACT?
E-contract is any quite contract formed within the course of e-commerce by the interaction of two or more individuals using electronic means, like e-mail, the interaction of a private with an electronic agent, like a computer virus , or the interaction of a minimum of two electronic agents that are programmed to recognize the existence of a contract.
E-contract may be a contract modeled, specified, executed and deployed by a software.
The two main parties to an e-contract are- The Originator and therefore the Addressee.
NATURE OF E-CONTRACT-
1. The parties don’t, in most cases, meet physically.
2. There are not any physical boundaries.
3. No handwritten signature and in most times, no hand writing is required.
4. Since there's no utmost security, risk factor is extremely high.
5. Jurisdictional issues are a serious setback on e-contracts just in case of breach.
6. There's no single authority to watch the entire process especially in shrink wrap contracts.
7. Digital Signatures are used and electronic records are used as evidences in court n when need arises.
8. The three main methods of contracting electronically are e-mail, World Wide Web (www), and Cyber contracts (Click to agree/online contract).
9. The topic matter includes:
(A). Physical goods, where goods are ordered online and paid over internet and physical delivery is formed.
(B). Digitized products like software which may even be ordered for.
(C). Services like electronic banking, sale of shares, financial advice etc.
HOW E - CONTRACTS CAN BE ENTERED INTO:
E-Contracts are often entered into through modes of communication like e-mail, internet and fax. The sole essential requirement to validate an E-Contract is compliance with the required pre- requisites provided under the Indian Contract Act, 1872. Which are:
a) Offer and Unconditional Acceptance - which can be made online or by e-mail communication.
b) Lawful Purpose and Consideration - A contract is enforceable by law only it's made for a lawful purpose and for a few consideration. It must not defeat any provision of law and must not be fraudulent in nature.
c) Capacity of Parties and Free Consent - Parties to a contract are capable of getting into a contract, if they satisfy the wants of Section 11 and 12 of the Indian Contract Act, 1872 (capacity to contract), and consent of the parties must be free as per Section 13 of the Indian Contract Act, 1872.
The simplicity of the execution of an E-Contract being confounding, many sometimes wonder about its validity, especially in comparison to a standard written contract. the straightforward truth lies within the fact that the Indian Contract Act, 1872 has not specifically laid out any specific way of communicating a suggestion and what constitute its acceptance. an equivalent are often achieved verbally, in writing or maybe through conduct. This shows that even in its simplicity, an E-Contract is as valid as a standard written contract; the sole condition/ requirement being that an E-Contract should possess all the essentials of a legitimate contract as mentioned above.
Unless an inference are often drawn from the facts, that the parties shall be bound only a proper agreement has been executed, the validity of an agreement wouldn't be suffering from its lack of ritual . Hence, once the parties are at consensus-ad-idem, then the formal execution of the contract is secondary. Therefore, once a suggestion is accepted through modes of communication like e-mail, internet and fax then a legitimate contract is made unless otherwise specifically provided by law effective in India; like the Registration Act, 1908, the varied Stamp Acts etc. Also, Section 1(4) of the IT Act lists out the instruments to which the IT Act, doesn't apply, which are as follows:
1. Negotiable Instruments;
2. Powers of Attorney;
3. Trust deeds;
4. Wills;
5. Contracts purchasable or Transfer of Immovable Property.
Evidentiary Value of Electronic Records: The courts in India recognize electronic documents under Section 65-A of Indian Evidence Act, 1872. The procedure for furnishing electronic documents as evidence is provided under Section 65-B of the Indian Evidence Act, 1872.
As per Section 65-B of the Indian Evidence Act, 1872 any information contained in an electronic record produced by a computer in printed, stored or copied form shall be deemed to be a document and it are often admissible as evidence in any proceeding without further proof of the first . But, admissibility of an equivalent is subject to varied conditions prescribed under section 65-B of the said act. it's required that the document or e-mail sought to be produced from a computer, was in regular use by an individual having lawful control over the system at the time of manufacturing it; the document or the e-mail was stored or received during the standard course of activities; the knowledge was fed into the system on a daily basis; the output computer was during a proper operating condition and has not affected the accuracy of the info entered.
CONTRACTS IN INDIA
CONTRACT: The word Contract was derived from a Latin word Contractum. The word contractum means drawn together. consistent with Salmon “A contract is an agreement creating and defining obligations between the parties.”
E CONTRACT: An e-contract may be a contract modeled, executed and enacted by software. It’s a contract “drafted” and “signed” in an electronic form.
FORMATION OF ELECTRONIC CONTRACTS
The subsequent sorts of Electronic Contracts are in vogue in the Indian business scenario.
Click-Wrap Agreements:
In click-wrap agreements115, a party after going through the terms and conditions provided in the website or programme has to, normally, indicate his assent to the same, by way of clicking on an ‘I Agree’ icon or decline the same by clicking ‘I Disagree’. This type o f acceptance is usually done before receiving the merchandise.
These sorts of contracts are extensively used on the internet, whether it be granting of a permission to access a site or downloading of any software or selling something via a website. This may be called the creation of contracts by conduct.
A click-wrap agreement is predominantly found as part of the installation process of software packages. It is also known as ‘click-through’ agreement or ‘click-wrap’ license. Click-wrap agreements are those electronic contracts that are deployed when a product is distributed by means other than disks, such as, when software is downloaded over the internet. Upon installation or first use, a window containing the terms of the license opens for the user to read. The user is offered with a choice of clicking on either ‘I agree’ or ‘I do not agree’. By clicking to any of these choices, the he accepts or declines the terms. If he does not agree, the process is terminated.
Contrasting shrink-wrap agreements, these agreements do not require a court to consider whether the user had adequate notice of the terms, since they are displayed at the very start of the contract formation process.116 Click-wrap agreements can further be of the following kinds:
1. Type and Click: In this case, the user must type ‘I accept’ or other specified words in an on-screen box and then click a ‘Submit’ or similar button. This demonstrates acceptance of the terms of the contract. A user cannot proceed to download or view the target information without observing these steps.
2. Icon Clicking: In this case, the user must click on an ‘OIC or ‘I agree’ button on a dialog box or pop-up window. A user may signify rejection by clicking ‘Cancel’ or closing the window.
3. Shrink-Wrap Agreements : The sale of software in stores, by mail and over the internet has resulted in quite a few specialized forms of licensing agreements. For instance, software sold in stores is commonly packaged in a box or other container, and then wrapped in clear plastic wrap. Through the clear plastic wrap on the box, the purchaser can see the warning that states the use of the software is subject to the terms of a license agreement contained inside, an agreement that cannot be read before purchase of the software.
The license agreement generally explains that if the buyer does not wish to enter into a contract by purchasing the software, he must return the product prior to opening the sealed package containing the CD on which the software resides. If the software is returned with the sealed package unopened, a refund will be obtained. Opening the sealed package containing the CD, however, signifies acceptance of the terms of the license and will, by and large, prevent the purchaser from obtaining a refund. These licenses have come to be known to as ‘shrink wrap licenses’.
Shrink-Wrap Agreements117 have derived their name from the ‘shrink-wrap’ packaging that usually contains the goods (such as CD Rom of software). The terms
However, the user may have to scroll down the window to read all of the terms See, David G Post & Dawn C, Nunziato, ‘Shrink-wrap Licenses and the licensing on the Internet’, Technology Licensing and Litigation (1997), at 519. and conditions o f accessing the particular software are printed on the shrink-wrap cover of the CD and the vendee after going through the same tears the cover to access the CD Rom, At times, supplementary terms are also imposed in such licenses which appear on the screen only when the CD is loaded to the computer.
The packaging contains a notice that by tearing open the shrink-wrap, the user assents to the software terms enclosed within. The user always has the option of returning the software if the new terms are not to his liking for a lull refund. In the context of software applications, a usual shrink-wrap agreement is a software license that dictates a seller’s terms to a buyer, and includes a conspicuous notice of agreement, title retention in the seller, restrictions on transfer and modification, prohibition of reverse engineering, and limited copying provisions.
Browse-wrap/ Web-wrap Contracts-
In browse-wrap contracts, the internet users, if they bother to look, will find a ‘terms or conditions’ hyperlink somewhere on web pages that proposes to sell goods and services. According to these terms and conditions, using the site for buying the goods or services offered (or just visiting the site) constitutes acceptance o f the conditions contained therein. On account of the internet’s capacity to replace conventional commerce, these kinds of contracts (mainly web-browse and click-wrap) are very common. Some critics contend that browse-wrap terms are not enforceable because they do not satisfy the basic elements of contract formation, however one may argue that the browse-wrap terms satisfy the elements of an implied contract by the consumer’s actions.
LEGAL VALIDITY OF E -CONTRACTS IN INDIA
The validity of e contract is to be received considering the provisions of The Indian contract Act, 1872, The Information Technology, 2000 and Indian Evidence Act, 187 Fig 2 E-Contracts – The legal framework
a) INDIAN CONTRACT ACT, 1872
The law concerning contracts is governed by the Indian Contract Act, 1872. The Indian Contract Act 1872 has defined in Section 2(h) that “An Agreement enforceable by Law may be a Contract”. The Act provides a basic contractual rule that a contract is valid if it's made by competent parties out of their free consent for a lawful object and consideration. there's no specific way of communicating offer and acceptance; it can be done verbally, in writing or maybe by conduct. it's the acceptance of offer and intimation of that acceptance which ends up in a contract. This intimation must be by some external manifestation which the law regards as sufficient. Thus Electronic contracts are as valid as written contracts; the sole condition is that they should possess all the essentials of a legitimate contract.
b) THE INFORMATION TECHNOLOGY ACT, 2000
The provisions of the Information Technology Act, 2000 give legal recognition to an Electronic Contract. this will be inferred from Section 10-A of the Act which states “Where during a contract form Where during a contract formation, the communication of proposals, the acceptance of proposals, the revocation of proposals and acceptances, because 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 bottom that such electronic form or means was used for that purpose."
• Digital signature: A signature may be a schematic script related with an individual . A signature on a document may be a sign that the person accepts the purposes recorded in the document. Section 3 of the Act delivers for the verification of Electronic Records by affixing Digital Signature. Verification of electronic record by electronic signature or electronic authentication technique shall be considered reliable. Thus an electronic contract are often created by digital signatures and is recognized by the laws in India
c) INDIAN EVIDENCE ACT, 1872
The courts in India recognize electronic documents under Section 65-A of Indian Evidence Act, 1872. The procedure for furnishing electronic documents as evidence is provided under Section 65-B of the Indian Evidence Act, 1872. The latter section provides that, any information contained in an electronic record produced by a computer in printed, stored or copied form shall be deemed to be a document and it are often admissible as evidence in any proceeding without further proof of the original. But, admissibility of the same is subject to varied conditions prescribed under section 65-B of the said act. it's required that the document or e-mail sought to be produced from a computer, was in regular use by an individual having lawful control over the system at the time of manufacturing it; the document or the e-mail was stored or received during the ordinary course of activities; the information was fed into the system on a daily basis; the output computer was during a proper operating condition and has not affected the accuracy of the data entered. An e- contract is basically a communication between two parties in respect of the transfer of goods or services. Thus, any e- mail communication and other communication made electronically is recognized as valid evidence during a Court of law.
RECOGNITION E-CONTRACTS
1. Offer:
The law already recognizes contracts formed using facsimile, telex and other similar technology. An agreement between parties is legally valid if it satisfies the wants of the law regarding its formation, i.e. that the parties intended to make a contract primarily. This intention is evidenced by their compliance with 3 classical cornerstones i.e. offer, acceptance and consideration. one among the first steps in the formation of a contract lies in arriving at an agreement between the contracting parties by means of a suggestion and acceptance. Advertisement on website may or might not constitute an offer as offer and invitation to treat are two distinct concepts. Being an offer to unspecified person, it's probably asking to treat, unless a contrary intention is clearly expressed. The test is of intention whether by supplying the information, the person intends to be legally bound or not. When consumers respond through an e-mail or by filling in a web form, built into the online page, they make an offer. the vendor can accept this offer either by express confirmation or by conduct.
2. Acceptance:
Unequivocal unconditional communication of acceptance is required to be made in terms of the offer, to make a legitimate e-contract. The critical issue is when acceptance takes effect, to work out where and when the contract comes into existence. the overall receipt rule is that acceptance is effective when received. For contracting no conclusive rule is settled. The applicable rule of communication depends upon reasonable certainty of the message being received. When parties connect directly, without a server, they're going to remember of failure or partial receipt of a message. Such party realizing the fault must request re-transmission, as acceptance is merely effective when received. When there's a standard server, the particular point of receipt of the acceptance is crucial choose the jurisdiction during which the e-contract is concluded. If the server is trusted, the postal rule may apply, if however, the server isn't trusted or there's uncertainty concerning the e-mail’s route, it's best to not apply the postal rule. When arrival at the server is presumed insufficient, the ‘receipt at the mail box’ rule is preferred.
3. Consideration and Performance:
Contracts result only one promise is formed in exchange for something reciprocally . This something reciprocally is named ‘consideration’. this rules of consideration apply to e-contracts. There’s concern among consumers regarding Transitional Security over the web . The e-directive on Distance Selling tries to get confidence by minimizing abuse by purchasers and suppliers. It specifies---
A list of key points must be supplied to the consumer in ‘a clear and comprehensible manner.’
a) Written confirmation, or confirmation in another durable medium available and accessible to the consumer, of the principle points.
b) The right of withdrawal enabling consumers to avoid deals entered into inadvertently or without sufficient knowledge, providing for seven-day cooling-off period free from penalty or reason to return the products or reimburse the value of services.
c) Performance should be delivered within thirty days of order unless otherwise expressly agreed.
d) Reimbursement of sums lost to fraudulent use of credit cards. It places the danger of fraud on the MasterCard Company, requiring them to require steps to guard their position.
e) On the opposite hand, there's also got to protect sellers from rogue purchasers. For this, the supply of ‘charge-back clauses’ and encouragement of pre-payment by buyers is usually recommended.
Thus, this Directive adequately protects rights of consumers against unknown sellers and sellers against unknown buyers.
4. Liability and Damages:
A party that commits breach of an agreement may face various sorts of liability under jurisprudence. thanks to the character of the systems and therefore the networks that business employ to conduct e-commerce, parties may find themselves responsible for contracts which technically originated with them but, thanks to software error , employee mistake or deliberate misconduct were executed, released without the particular intent or authority of the party. Sound policies dictate that parties receiving messages be ready to believe the legal expressions of the authority from the sender’s computer and this legally be ready to attribute these messages to the sender.
In addition to employing information security mechanisms and other controls, techniques for limiting exposure to liability include:
1. Trading partner and legal technical arguments
2. Compliance with recognized procedures, guidelines and practices
3. Audit and control programmers and reviews
4. Technical competence and accreditation
5. Proper human resource management
6. Insurance
7. Enhance notice and disclosure mechanisms and
8. Legislation and regulation addressing relevant secure electronic commerce issuing.
5. 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.
A digital signature functions for electronic documents sort of a handwritten signature does for printed documents. The signature is an unforgeable piece of information that asserts that a named person wrote or otherwise agreed to the document to which the signature is attached.
A digital signature actually provides a greater degree of security than a handwritten signature. The recipient of a digitally signed message can verify both that the message originated from the person whose signature is attached which the message has not been altered either intentionally and accidentally since it was signed. Furthermore, secure digital signatures can't 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 therefore the integrity of the message. the elemental drawback of online contracts is that if there's no alternate means of identifying an individual on the opposite side than digital signatures or a public key, it's possible to misrepresent one’s identity and check out to pass of as somebody else.
ISSUES AND CHALLENGES:
1. Capacity to Contract:
One must make sure that the persons who are parties to the into an agreement. often it's a nameless individual getting into a contract. electronic “contract” have the legal competence and capacity to enter The service provider has no idea whether the individual who has clicked on “I Agree” text or icon is legally competent to enter into a contract. Capacity of parties is one major requisites of a legitimate Contract as under the Indian Contract Act, 1872. Sections 10, 11 & 12 of the Act provide for the competence of parties. Contracts entered into by individuals, who aren't competent to contract are void. There may arise during a situation, wherein infants who aren't sufficiently old to enter into a contract are getting into a web contract with the service.
2. Free consent: Free consent is an important prerequisite of a legitimate contract. In on line contracts there's no scope for negotiation. this is often an obstacle for the user. But the option “take it or leave it” transaction is always to the user. Within the case of LIC of India Vs Consumer Education and Research Centre, the Supreme Court has held that “In line contracts there would be no occasion for a weaker party to bargain on assume to possess equal bargaining power”. He has either to simply accept or leave the service or goods in terms of the line contract. His option would be either to simply accept the unreasonable or unfair terms or forgo the service forever.” Hence it are often concluded that the user should be prudent while giving his consent to avoid troubles.
3. Decision on the Applicable Law:
The Indian law provides two choices to use personal jurisdiction, i.e., to use the law of the forum, or to use the law of the location of the transaction, or occurrence that gave rise to the litigation within the first place. The courts do have a judicial right to work out the selection of law by identifying the system of law with which the transaction has its closest and most real connection. there's no bar that law of a far off country can't be applied or an Indian party couldn't be subject to foreign jurisdiction. the stress is on to pick proper law.
4. Decisions on the Court Jurisdiction:
E-contracts gives wide scope for explanation for action arising at very many geographical locations. This might cause filing of cases at different places. Defending lawsuits at multiple geographical locations might be both expensive and frustrating. Hence choice of forum clause should be included altogether online contracts. It makes an honest legal sense for the web service providers to limit their exposure to at least one jurisdiction only. Thus the web service provider has no other choice but to subject themselves to just one set of forum and applicable laws only. The user has no other choice, but to simply accept the service provider‟s
INTRODUCTION
A digital signature is a mathematical technique wont to validate the authenticity and integrity of a message, software or digital document. as the digital equivalent of a handwritten signature or stamped seal, a digital signature offers much more inherent security, and it's intended to unravel the matter of tampering and impersonation in digital communications.
Digital signatures can provide the added assurances of evidence of origin, identity and standing of an electronic document, transaction or message and may acknowledge consent by the signer.
In many countries, including the us , digital signatures are considered legally binding in the same way as traditional document signatures.
HOW DIGITAL SIGNATURES WORK?
Digital signatures are supported public key cryptography, also referred to as asymmetric cryptography. Employing a public key algorithm, like RSA, one can generate two keys that are mathematically linked: one private and one public.
Digital signatures work because public key cryptography depends on two mutually authenticating cryptographic keys. The individual who is creating the digital signature uses their own private key to encrypt signature-related data; the sole thanks to decrypt that data is with the signer's public key. this is often how digital signatures are authenticated.
Digital signature technology requires all the parties to trust that the individual creating the signature has been ready to keep their own private key secret. If somebody else has access to the signer's private key, that party could create fraudulent digital signatures within the name of the private key holder.
HOW TO CREATE A DIGITAL SIGNATURE?
To create a digital signature, signing software -- like an email program -- creates a one-way hash of the electronic data to be signed. The private key's then wont to encrypt the hash. The encrypted hash -- along side other information, like the hashing algorithm -- is that the digital signature.
The reason for encrypting the hash rather than the whole message or document is that a hash function can convert an arbitrary input into a hard and fast length value, which is typically much shorter. this protects time as hashing is far faster than signing.
The value of a hash is exclusive to the hashed data. Any change within the data, even a change during a single character, will end in a special value. This attribute enables others to validate the integrity of the info by using the signer's public key to decrypt the hash.
If the decrypted hash matches a second computed hash of an equivalent data, it proves that the info hasn't changed since it had been signed. If the 2 hashes don't match, the info has either been tampered with in how -- integrity -- or the signature was created with a personal key that does not correspond to the general public key presented by the signer authentication.
A digital signature are often used with any quite message -- whether it's encrypted or not just so the receiver are often sure of the sender's identity which the message arrived intact. Digital signatures make it difficult for the signer to deny having signed something assuming their private key has not been compromised -- because the digital signature is exclusive to both the document and therefore the signer and it binds them together. This property is named nonrepudiation.
Digital signatures aren't to be confused with digital certificates. A digital certificate, an electronic document that contains the digital signature of the issuing certificate authority, binds together a public key with an identity and may be wont to verify that a public key belongs to a specific person or entity.
Most modern email programs support the utilization of digital signatures and digital certificates, making it easy to sign any outgoing emails and validate digitally signed incoming messages. Digital signatures also are used extensively to supply proof of authenticity, data integrity and nonrepudiation of communications and transactions conducted over the web .
USES OF DIGITAL SIGNATURES-
Industries use digital signature technology to streamline processes and improve document integrity. Industries that use digital signatures include:
1) Government - The U.S. Government Publishing Office publishes electronic versions of budgets, public and personal laws and congressional bills with digital signatures. Digital signatures are employed by governments worldwide for a spread of uses, including processing tax returns, verifying business-to-government (B2G) transactions, ratifying laws and managing contracts. Most government entities must adhere to strict laws, regulations and standards when using digital signatures.
2) Healthcare - Digital signatures are utilized in the healthcare industry to enhance the efficiency of treatment and administrative processes, to strengthen data security, for e-prescribing and hospital admissions. the utilization of digital signatures in healthcare must suits the insurance Portability and Accountability Act of 1996 (HIPAA).
3) Manufacturing - Manufacturing companies use digital signatures to hurry up processes, including product design, quality assurance (QA), manufacturing enhancements, marketing and sales. the utilization of digital signatures in manufacturing is governed by the world organization for Standardization (ISO) and therefore the National Institute of Standards and Technology (NIST) Digital Manufacturing Certificate (DMC).
4) Financial services - The U.S. financial sector uses digital signatures for contracts, paperless banking, loan processing, insurance documentation, mortgages, and more. This heavily regulated sector uses digital signatures with careful attention to the regulations and guidance put forth by the Electronic Signatures in Global and National Commerce Act (E-Sign Act), state UETA regulations, the buyer Financial Protection Bureau (CFPB) and therefore the Federal Financial Institutions Examination Council (FFIEC).
DIGITAL SIGNATURE VS ELECTRONIC SIGNATURE.
While digital signature may be a technical term, defining the results of a cryptographic process which will be wont to authenticate a sequence of knowledge , the term electronic signature -- or e-signature -- may be a legal term that's defined legislatively.
For example, within the us , the term was defined within the Electronic Signatures in Global and National Commerce Act, passed in 2000, as meaning "an electronic sound, symbol, or process, attached to or logically related to a contract or other record and executed or adopted by an individual with the intent to sign the record."
This means that a digital signature -- which may be expressed digitally in electronic form and related to the representation of a record -- are often a kind of electronic signature. More generally, though, an electronic signature are often as simple because the signer's name being entered on a form on a webpage.
To be considered valid, electronic signature schemes must include three things:
A digital signature can, on its own, fulfill these requirements to function an electronic signature:
The public key of the digital signature is linked to the signing entity's identification; the digital signature can only be affixed by the holder of the general public key's associated private key, which implies the entity intends to use it for the signature; and the digital signature will only authenticate if the signed data -- document or representation of a document -- is unchanged. If a document is altered after being signed, the digital signature will fail to authenticate.
While authenticated digital signatures provide cryptographic proof that a document was signed by the stated entity which the document has not been altered, not all electronic signatures can provide an equivalent guarantees.
DIGITAL SIGNATURE SECURITY FEATURES AND BENEFITS
Security features embedded in digital signatures make sure that a document isn't altered which signatures are legitimate. security measures and methods utilized in digital signatures include:
DIGITAL SIGNATURE CERTIFICATES SEC 35 TO 39
Certifying Authority to issue Digital Signature Certificate
Any person may make an application to the Certifying Authority for the difficulty of a Digital Signature Certificate in such form as could also be prescribed by the Central Government
Every such application shall be amid such fee not exceeding twenty-five thousand rupees as could also be prescribed by the Central Government, to be paid to the Certifying Authority:
Provided that while prescribing fees under sub-section (2) different fees could also be prescribed for various classes of applicants'.
Every such application shall be amid a certification practice statement or where there's no such statement, a press release containing such particulars, as could also be specified by regulations.
On receipt of an application under sub-section (1), the Certifying Authority may, after consideration of the certification practice statement or the opposite statement under sub-section (3) and after making such enquiries because it may deem fit, grant the Digital Signature Certificate or for reasons to be recorded in writing, reject the application:
Provided that no Digital Signature Certificate shall be granted unless the Certifying Authority is satisfied that - the applicant holds the private key like the general public key to be listed within the Digital Signature Certificate. The applicant holds a personal key, which is capable of making a digital signature.
The public key to be listed within the certificate are often wont to verify a digital signature affixed by the private key held by the applicant:
Provided further that no application shall be rejected unless the applicant has been given an inexpensive opportunity of showing cause against the proposed rejection.
Representations upon issuance of Digital Signature Certificate
A Certifying Authority while issuing a Digital Signature Certificate shall certify that--
Suspension of Digital Signature Certificate
Subject to the provisions of sub-section (2), the Certifying Authority which has issued a Digital Signature Certificate may suspend such Digital Signature Certificate -
Revocation of Digital Signature Certificate
A Certifying Authority may revoke a Digital Signature Certificate issued by it -
Subject to the provisions of sub-section (3) and without prejudice to the provisions of sub-section (1), a Certifying Authority may revoke a Digital Signature Certificate which has been issued by it at any time, if it's of opinion that-
Notice of suspension or revocation
Where a Digital Signature Certificate is suspended or revoked under section 37 or section 38, the Certifying Authority shall publish a notice of such suspension or revocation, as the case could also be , within the repository laid out in the Digital Signature Certificate for publication of such notice.
Where one or more repositories are specified, the Certifying Authority shall publish notices of such suspension or revocation, as the case may he. in all such repositories.
Chapter 4 of IT Act, 2000, “Attribution, Acknowledgement & Dispatch of Electronic records
This section mainly deals with the electronic contracts. In physical world organized process is defined to border the contracts but in cyber space there are many ambiguities. Hence provisions are made in order that making electronic contracts can be an easier process.
ATTRIBUTION OF ELECTRONIC RECORDS (SECTION 11)
The word attribution means, “The act of establishing a specific person because the creator of a piece of art. 2. Something, like a quality or characteristic, that's associated with a particular possessor.”
With respect to IT At 2000, attribution of electronic records means fixing identity of sender and receiver. Here originator may be a one that sends or generates any electronic record. The receiver of electronic record is termed as Addressee. for instance if ‘A’ sends an email to ‘B’, then ‘A’ may be a sender or originator and ‘B’ is Addressee. In normal course of communication (postal communication or paper communication), it’s very easy to identify originator and addressee but in electronic communication it’s not an equivalent.
The electronic record can be sent by the originator himself or by the person who has been authorized by the originator or by an data system that the originator has authenticated.
Acknowledgment of receiving of electronic record (Section12)
If the originator has not specified any specific mode of acknowledgement (an act by the addressee that he/she has received the electronic record), the acknowledgement are often given by a return mail by the addressee or an automatic response by the addressee or an act by addressee that shows the acknowledgement.
For example when a person receives an email by an estate agent, for land properties, the person can send a thank u mail or can send an automatic reply or can show interest within the offer given by the agent by visiting him. All the three option show an acknowledgement.
If the originator has specified a format and period of time for sending the acknowledgement, then the addressee must send the acknowledgement therein format and within the given period of time otherwise the originator can send a notice to the addressee stating that no acknowledgement was received.
Dispatch of Electronic Record(Section 13)
This section states that when an individual sends an electronic record from his computer then that specific time becomes the time of dispatch. for instance if Mr. A composes an email at 3.30 am and presses the “Send” button at 4.30 am then time of dispatch are going to be 4.30 am.Because after pressing send button the sender cannot make any changes to the record.
With the advanced and increased use of online media, online business is becoming a fast emerging trend. Every five in eight companies are operating online, conducting e-commerce business. But being functional online doesn’t mean you can escape legal matters.
There are various legal issues associated with E Commerce businesses as well. And if these issues are not taken care of in time, they can lead to serious problems for your business.
Described below are some of the common legal issues an e-commerce business faces.
Incorporation Problem-
If you are a company operated merely via a website, not being incorporated is a crucial problem. Any purchase and selling activity related to your products will be considered illegal and you can’t claim your right in case of any fraud and corruption. Without incorporation, your business has no shelter.
Trademark Security Problem-
Not getting your trademark protected is one of the main legal issues in the field of e-commerce. Since trademark is your company’s logo and symbol, the representation of your business all over the web, it must be protected. If you don’t secure it, it won’t take long before you’ll realize your trademark is being infringed upon. This is very common legal issue and can become a deadly threat to your e-business.
With the hackers on loose and cybercrime so common, trademark infringement of your business or by your business can be a serious legal matter and may hinder your business’s progress.
Copyright Protection Issue-
While publishing content for your e-commerce website, using content of any other company can be a severe legal problem. This might mark an end to your e-business. There are many sites online which are royalty free and allow you to access their content and images. You may use those sites for creating web content for your business site.
Even if you unintentionally used copyrighted content, the other party can easily sue your business.
Transaction Issues-
The Australian Consumer Law (ACL) governs all e-commerce transactions in Australia. Therefore, if you do not abide by the rules, you can get into serious law violation problems.
If your business fails to provide clear and complete description of the product, cost and purchase details, information about delivery i.e. when the customer will receive products and other information related to exchange and refunds, the ACL can impose penalties on your business.
Privacy Issues-
When it comes to online businesses, privacy is the major issue that can create problems both for the business and customers. Consumers share information with businesses online and they expect the sellers to keep their information confidential. By just one minor mistake and leakage of valuable information of a customer, you’ll not only lose your potential customer but your image and reputation will become a question mark. Moreover, you’ll be subjected to serious legal problems according to Australian privacy laws.
If e-commerce businesses lead to exposure and advantages for businesses online, then it certainly has given rise to some legal issues too that can be avoided by keeping in mind the rules and laws framed by Australian Government.
CONCLUSION:
The legislation in India addresses all avenues of e-contract. However the advancement of technologies will bring in new challenges for the law makers and therefore the government departments. Law needs to be updated and upgraded from time to time it to stay up with the evolving technologies
E-contracts are compatible to facilitate the re-engineering of business processes occurring at many firms involving a composite of technologies, processes, and business strategies that aids the moment exchange of data . The e-contracts have their own merits and demerits. On the one hand they reduce costs, saves time, fasten customer response and improve service quality by reducing paper work, thus increasing automation. With this, E-commerce is predicted to enhance the productivity and competitiveness of participating businesses by providing unprecedented access to an on-line global market place with many customers and thousands of products and services. On the opposite hand, since in electronic contract, the proposal focuses not on humans who make decisions on specific transactions, but on how risk should be structured in an automatic environment. Therefore the thing is to make default rules for attributing a message to a celebration so on avoid any fraud and discrepancy within the contract.
