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Analyzing legal and security issues in cyber contracts (E - contracts)

The world of the internet has provided convenience in almost all aspects of life. It has seemingly worked in connecting people all around the globe. As a result, people are more comfortable, and everything is just a click away. The very radiant impact of this reflects in the corporate world through the boost of e-commerce across the board. Businesses and legal or formal paperwork have robotized with the help of technological advancement and electronic mediums. Traditional contracts and agreements by pen and paper are getting replaced by online contracts or e-contracts. Hence, we can enunciate that e-contracts are nothing but the digitized version of traditional contracts.

However, essential elements of a contract are not different as e-contracts are also governed under the Indian Contract Act, 1872, along with the provisions followed under Information Technology Act, 2000, Indian Evidence Act, 1872, Payment and Settlement Act, 2007 and Electronic Commerce Act, 1998. As cyber contracts are also governed by the Indian Contract Act, 1872, the essential elements of a valid e-contract are similar to a traditional contract. In addition, Clickwrap agreements, Browsewrap agreements and Shrinkwrap agreements are three general kinds of e-contracts.

These are the essential ingredients of an E-contract: -

  • Involvement of two parties who are compatible under the law to enter an agreement/contract. Note: In cyber contracts, parties to a contract are generally referred to as - Originator and Addressee
  • Use of electronic medium 
  • Free consent 
  • Valid consideration and lawful object 
  • E - acceptance and E - proposal 
  • Intention to create a legal relationship and certainty/possibility of legal performance

The legal and regulatory framework in India for the validity of cyber contracts

  • Indian Contract Act, 1872

The provisions laid down under the Act do not limit electronic contracts or agreements unless they violate the general principles of a valid and legitimate contract enforceable under the law. Under Section 2 (b) of the Act, acceptance of the valid offer and other essentials are considered valid criteria for forming the contract. Linking to the E-Contract is a form of acceptance when we agree by clicking on "I agree" to all the supplier's/ originator's terms and conditions.

  • Section 65-A of the Indian Evidence Act, 1872

In congruence with this section defined by the Indian Evidence Act of 1872, the judicial systems in India acknowledge electronic documents with the effect of special provisions as evidence relating to the contents of electronic records. However, it is also pertinent to section 65-B of the Act and the conditions prescribed therein, fulfilling its admissibility in the court.

  • Section 10A And Section 2 (p) of the Information Technology Act, 2000

By section 10A of the Act, if the contract formation meets all the requisites as per the provisions of the law, then it shall not be deemed unenforceable solely on the ground of its medium. Furthermore, In e-contracts, digital signatures will be required to authenticate communication between the parties, defined under Section 2 (p) of the Information Technology Act, 2000.

  • Electronic Commerce Act, 1998

The Indian legislative system brought the Act to oversee the challenges related to cyber contracts. The Act comprises 15 divisions and lays down essential rules and requirements for genuine e-contracts.

Legal and security issues faced by E Contracts

Judicial issues:

Choice of the applicable law

It gets slightly tricky to determine which law will govern the dispute in case of cyber contracts in the absence of the choice of the law by the parties to an agreement, i.e. originator and addressee. Consequently, several civil laws may be affected in deciding relevant substantive laws in cross-border commercial transactions.

Choice of the court of jurisdiction

Since transactions like cyber contracts are paperless, it becomes relatively difficult to determine the court's jurisdiction in case of a breach or violation of the contract or any terms thereof. However, as per Section 13 (3) of the IT Act, the electronic record is deemed to be dispatched at the business place of the originator, whereas, for the addressee, it is considered to be at the business place where he has received the same. Subsequently, the issue may emerge where the location of the computer source is dissimilar from the principal place of the enterprise or a communicator. Also, when the parties are engaging in e-contract terms from different borders of the world.

Competency and free consent

Section 10 of the Indian Contract Act primarily governs contracts that include e-contracts in India. Consequently, Section 10, 11, and 12 of the Act mandates free consent and competence of the parties to enter a contract which are essential ingredients for a valid contract formation under the law. Since this also applies to cyber contracts, a situation may arise where an incompetent person be it minor or any other, may accidentally or fraudulently get access or either by clicking on ' I agree' to the terms of the contract.

Security Issues:

Security and privacy threat

More often than not, security and privacy issues majorly affect online transactions, irrespective of whether they are commercial or on the applications or a shopping website with buyer and seller agreements. Internet malpractices such as hacking, phishing, and email satirizing are some prominent drawbacks in web-based transactions and contracts.

Signature authentication

The binding parties don't have to sign a contract, as the Indian Contract Act, 1872 recognizes both, i.e. oral and written agreements. However, a digital signature represents the party's intention or consent to enter a contract, which may be subject to suspicion due to cyber fraud in the virtual world.

Loss due to technical error

Loss due to technical error is one of the most prevalent issues affecting transactions and contracts in the virtual environment.

Data forgery and Identity theft

Section 66, read with Section 43 of the Information Technology Act, 2000 explicitly deals with online fraud. Nonetheless, it also incorporates identity theft, which includes imitating the buyer, a person, or an enterprise and dealing in unlawful activities that may involve criminal intent.

Court precedent in India on the online contracts

Trimex International Fze Limited v. Vedanta Aluminium Limited

The offer and acceptance were transmitted by email without signature documents in the given case. The issue pertained to the question of whether the contract is held to be valid in the absence of the formal subsisting agreement. The Hon'ble Supreme Court in the given case pronounced its judgment as once a contract is reached within the electronic system of the parties, it fulfils all the essentials of the said contract under the provisions of the laws to which it is subjected, the mere notion that a formal agreement must be needed has no bearing on its validation.

Above are some of the legal and technical issues which e-contracts face in India and globally. However, these legal and technical limitations can be curbed with the implication of the substantial yet specific laws for the contracts and transactions happening digitally. Nevertheless, with innovations and inventions in technological trends, the growth of the digital wave is quite evident in the world of business, and independent e-contract governance can transform it into a success with better control over the issues.

Conclusion

>The world has moved on and adapted various approaches to tackle the problems associated with business trades. With e-contracts coming into the picture, an arrangement can be made between two parties residing in different corners of the world from their place of business. The e-contract mechanism has reduced the parties' physical presence while signing the agreements but has also increased the fear of falling into online fraud. Many people have gained through this new mechanism but still, a handful of people have been left behind, fearing they might get into trouble. Appropriate safeguards are required to protect the parties' interests by legal justification and clarity of jurisdiction if a party breaches the terms of the e-contract. Depending upon the trade, the traditional way of agreement might vanish in the coming days, and the new e-contract will replace it.

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Discharging and Quashing in Criminal Cases

In criminal cases, it is crucial to consider all available options for the accused, particularly whether to file a petition for Discharge or go before the High Court in a quashing petition. The question of whether the accused should apply for Discharge under Section 227 or Section 239 under the Code of Criminal Procedure, 1973 (Cr.P.C.) to the trial court or apply to the High Court under Section 482 of the Cr.P.C. to have the summoning orders quashed, provided they believe their case has some merit for such relief.

What is Discharge?

The remedy provided to the falsely accused individual under the Criminal Procedure Code of 1973 is known as a Discharge Application. This Code contains the guidelines for submitting a discharge application if the accusations brought against him are untrue. He is entitled to be dismissed if the evidence presented to the court is insufficient to establish the offence and there is no prima facie evidence against him.

Essential elements of Discharge

The following essential components must be present for the Court to assess the Charge sheet and Police Report that were provided to it by the police, in accordance with Section 173:

  • If he sees proper, the Magistrate may question the Accused.
  • Following that, the prosecution and the accused parties' arguments and their stories would be heard.
  • Grounds against the accused should be without merit if no supporting documentation exists. The Court must also be certain that the accused is not the subject of a valid first charge.

The accused is discharged if the aforementioned requirements are met.

When an accused can be discharged in different kinds of cases

Discharge of accused in warrant cases based on a police report: The final charge sheet under Section 173 of the Code is often filed by the police when their investigation is complete. The court in question then starts the accused's trial. However, Sections 239 and 227 of Cr.P.C. have procedures that allow an accused individual to be released before charges are filed against him. These rules, however, may only be invoked by the Accused in warrant cases.

Discharge of accused in warrant cases instituted on a police report before Magistrate: The final charge sheet against the accused is typically filed by the police when their investigation is complete. After then, the court in question presents the accused with the allegations that have been brought against him. The Cr.P.C., however, provides a procedure that allows the accused to be freed before formal accusations are brought against him.

Suppose the Magistrate determines that the charge against the accused is without merit after carefully reviewing the police reports. In that case, all the documents submitted pursuant to Section 173, the examinations of the accused, if any. After hearing the prosecution and accused, he shall discharge the accused and note his justifications.

Discharge of accused in Sessions Trial: According to Section 227 of the Code, if the Judge determines that there are insufficient grounds to proceed against the accused, after hearing the prosecution's and accused's arguments and taking into account the case file and any documents submitted with it, he shall discharge the accused and note the specifics of his decision. An accused person's Discharge cannot be issued before taking into account the accusations in the chargesheet and the pertinent legal precedent.

Important Case law

The Hon'ble Supreme Court ruled in Smt. Rumi Dhar v. State of West Bengal & Anr. (2009) 6 SCC 364 that the learned Judge should examine the specific charges levelled against each accused individual when evaluating an application for Discharge made in accordance with Section 239 of the Code to determine whether or not a case has been made out at all.

What is Quashing?

It is determined that Section 482 Cr.P.C. is within the ambit of the High Court's inherent powers and is relatively unusual in criminal law. It appears to be the most potent instrument given to the High Court under the Indian Constitution's procedural provisions. It indicates that the High Courts of a specific state are the only ones who may employ this stipulated clause, and the Superior authorities may never revoke the High Courts' inherent power. However, only the courts have the right to use these authorities to provide complete and acceptable justice to the parties in front of them and to prevent misuse of the legal system. In accordance with section 482 CrPC of the new Code, this is done with an inherent capacity to uphold justice, right wrongs, and prevent abuse of the legal system. It is important to note that the high court's inherent powers should only be employed in limited circumstances. The Code of Criminal Procedure (Amendment) Act of 1923 added this section because it was determined that the high courts were unable to provide complete justice when it was determined that the given case demonstrated ex-facie or occasionally prima facie illegality that was frequently observable and obvious.

Essential elements of Quashing

However, it is argued here that this provision includes three scenarios in which such inherent jurisdictional rights may be used. These are as follows:

  • To avoid misuse of the court's procedures.
  • To fulfil the purposes of justice.
  • To put into effect a Cr.P.C. order.

The following points can be used to conclude what is coherent with the goals of 482 Cr.PC: The inherent authority of the High Court is the most potent tool under Section 482 of the Code of Criminal Procedure, and it undoubtedly acts in a particular manner in criminal law. This process is primarily employed to purge the realm of criminal proceedings of all corrupting and malevolent influences.

Important Case Law

In Som Mittal v. Govt. of Karnataka, the Supreme Court ruled that the authority granted by Section 482 Cr.P.C. must only be used in the rarest of circumstances. The use of inherent power, as described in Section 482 of the Code of Criminal Procedure, is an exception rather than the rule. The exception is only used when it is brought to the Court's attention that a serious injustice would have been done if the trial had continued and the accused would have been subjected to needless harassment. At first glance, it would seem to the Court that the trial would likely result in an acquittal.

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Frequently Asked Questions

LegatoApp is a legal tech company that creates technology developments to make the legal industry easy for lawyers. One of the products of LegatoApp is to create an aggregation platform that hosts legal professionals on an interactive online platform that connects its Clients to the legal professionals from pan India in order to provide the Client with adequate legal services with the help of tech and non-tech features.

You are required to fill a form on the dashboard,and the support executive will get back in order to complete the formalities.

No, we are not a Law firm.

There is no registration fee for the initial basic Sign Up, but there are curated paid packages for lawyers that entails a list of services provided by LegatoApp.

In the current pandemic situation, it is vital to have a recognized digital presence that allows you to interact and build your clientele at your home's ease.

LegatoApp will helpprovide you with visibility, increase your recognition, and provide a better reach to build your clientele.

We are not a marketing platform; we do not levy any advertising fee. We cannot guarantee any amount of work, as the work you get depends on the level of experience and on the selection of a lawyer by theClient, based on the consultation taken up by the Client.

  • Call Consultation
  • Video Consultation
  • Face to Face Consultation

It entirely depends on you; you can offer a free consultation or charge a fee for it.

It depends on the matter of the Client. Generally, consultations range between 30 minutes to 45 minutes.

The algorithm of LegatoApp tries to geographically categorize the clients in order for better visibility and access.

You are required to have 2+ years of experience, and you should currently be in practice.

Law firm – multiple partners can register on individual capacity

Yes, the partner of the lawfirm can register with LegatoApp in an individual capacity.

In case there are multiple partners, all the partners can register on an individual basis.

  • You should provide LegatoApp with accurate details which will assist in speedy authentication of your profile,
  • Make sure your profile is descriptive in order to achieve an edge over other profiles,
  • You should update your profile on a regular basis.

You are required to mention six categories in order to receive a broader client reach.

Considering it is a digital platform, you may receive a clientele outside of your geographical boundaries based on the Client's requirement.

You are the sole decision taker of the fee to be levied to the clients. You are required to mention LegatoApp of these charges at the time of client handover.

No, we do not charge any fee for showcasing your profile. LegatoApp is not a marketing/advertising platform; we simply try to meet with the client requirements in order to provide them with a lawyer based on these requirements.

There is no minimum time; you can opt-out of the services at any time. You can contact us at Support@legatoApp.com.

Yes, lawyers can Sign Up on LegatoApp as well. There may be certain times that you as a lawyer, would be required to transfer a case/ matter to another lawyer.

In case a lawyer is unable to work on a particular case, we will assign that work/case/matter to another lawyer. However, any work that is delegated to a lawyer should be done through and by LegatoApp only.

You can consult a Senior Counsel through LegatoApp for an added remuneration to be paid for the Senior Counsel's services.

We have a certain reach in the legal industry for the research papers and article we post, and you can post such research papers and articles for an additional cost on our platform.

This is a required step for the authentication of the lawyer.

You can email us at Support@legaotapp.com or call us at 7738071611 or WhatsApp us on 8692051611