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• For a contract to happen there should be a communication of proposal and acceptance.
• A contract comes into existence when the acceptor gives his acceptance. It is only acceptance which gives rise to the cause of action and not just making of the offer.
• The information technology act, 2000 has not amended or substituted the contract act, 1872 in any manner whatsoever. In order to form a valid electronic contract, one needs a promisor and a promisee. The IT Act grants legal recognition to communication process involving computer, computer system and computer network by identifying attribution, acknowledgement and dispatch of electronic records as key statutory provisions in its chapter IV section 11 to 13. The Act identifies three parties to the electronic transmission process:
  • Intermediary – section 2(1)(wz)
  • Addressee – section 2(1)(b)
  • Originator – section 2(1)(za)

“originator” means a person who sends, generates, stores or transmits any electronic message or causes any electronic message to be sent, generated, stored or transmitted to any other person but does not include an intermediary (such as web browser etc.).

“intermediary” with respect to any particular electronic message means any person who on behalf of another person receives, stores or transmits that message or provides any service with respect to that message;

“addressee” means a person who is intended by the originator to receive the electronic record but does not include any intermediary

ATTRIBUTION OF ELECTRONIC RECORDS (SECTION 11)

An electronic records shall be attributed to the originator :-

• If it was sent by the originator himself
• By a person who had the authority to act on behalf of the originator in respect of that electronic record.
• By an information system programmed by or on behalf of the originator to operate automatically.

(With respect to IT At 2000, attribution of electronic records means fixing identity of sender and receiver. Here originator is a person who sends or generates any electronic record. The receiver of electronic record is termed as Addressee)

For example:  If ‘X’ sends an email to ‘Y’, then ‘X’ is a sender or originator and ‘Y’ is receiver or 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 the same.

The electronic record can be sent by the originator himself or by the person who has been authorized by the originator or by an information system that the originator has authenticated.)

            It is obligatory that section 11 of the Act should be understand along with the substitutions in the section 88 A (Presumption as to electronic messages) of Indian Evidence Act, 1872. This provision was introduced by IT Act 2000.

ACKNOWLEDGMENT OF RECEIVING OF ELECTRONIC RECORD (SECTION12)

Rules regarding acknowledgement of receipt:

1. No Agreement Regarding Mode of Acknowledgement: Where the originator has not agreed with the addressee that the acknowledgement of receipt of electronic record be given in a particular form or by a particular method, an acknowledgement may be given by:
   • Any communication by the addressee, automated or otherwise; or
   • Any conduct of the addressee, sufficient to indicate to the originator that the electronic record has been received [Sec. 12(1)].
2. Stipulation by the Originator: Where the originator has stipulated that the electronic record shall be binding only on receipt of an acknowledgement of such electronic record by him,
   • then unless acknowledgement has been so received, the electronic record shall be deemed to have been never sent by the originator [Sec. 12(2)].
3. No Stipulation by the Originator: When the originator has not stipulated that the electronic record shall be binding only on receipt of such acknowledgement, and the acknowledgement has not been received by the originator,
   • Then the originator may give notice to the addressee stating that no acknowledgement has been received by him and
   • Specifying a reasonable time by which the acknowledgement must be received by him
   • If no acknowledgement is received within the aforesaid time limit, he may after giving notice to the addressee, treat the electronic record as though it has never been sent [Sec. 12(3)].

DETERMINATION OF TIME AND PLACE OF DISPATCH AND RECEIPT OF ELECTRONIC RECORD (Sec. 13)

Time of Dispatch of Electronic Record:

Unless otherwise agreed between the originator and the addressee,

• The time of dispatch of an electronic record occurs when it enters a computer resource outside the control of the originator (Sec. 13(1)].

Time of Receipt of Electronic Record:

Unless otherwise agreed between the originator and the addressee, the time of receipt of an electronic record shall be determined as follows namely:

• If the addressee has designated a computer resource for the purpose of receiving electronic records:
  • Receipt occurs at the time when the electronic record enters the designated computer resource; or
  • If the electronic record is sent to a computer resource of the addressee that is not the designated computer resource, receipt occurs at the time when the electronic record is retrieved by the addressee;

• If the addressee has not designated a computer resource along with specified timings, if any, receipt occurs when the electronic record enters the computer resource of the addressee [Sec. 13(2)].
• Unless otherwise agreed to between the originator and the addressee,
  • An electronic record is deemed to be dispatched at the place where the originator has his place of business, and
  • Deemed to be received at the place where the addressee has his place of business [Sec. 13(3)].

• For the purposes of this Section :
  • If the originator or the addressee has more than one place of business, the principal place of business, shall be the place of business;
  • If the originator or the addressee does not have a place of business, his usual place of residence shall be deemed to be the place of business;
  • “Usual place of residence”, in relation to a body corporate, means the place where it is registered [Sec. 13(5)].

Validity of Contracts Formed through Electronic Means [Inserted Vide IT (Amendment) Act, 2008 (Sec. 10A)]:

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. This section provides legally binding character to e-commerce activities.