CYBER LAW AND E-COMMERCE

CYBER SPACE
◦ With time there has been drastic change in technological advancement and its utilization in day- to- day life.
◦ Today Human beings are highly dependent over ICT – Urban sphere – from buying, payment of bills, ticketing,
etc.,
◦ Access the resources on Internet – blink of eye – via internet.
◦ Cyber space culture highlights the complex issues and vulnerability regarding cyber crimes.
◦ Cyber – prefix – person, thing or idea as a part of the Information and Computer age.
◦ Virtual World of Internet- context of Cyberspace
◦ Law – governs – Cyber law – Universal Jurisdiction ( Use of Inter- networked information technology)
◦ Growth of E-commerce- propelled- need for vibrant and effective regulatory mechanisms – strengthen legal
infrastructure.
◦ CL is important – touches almost all aspects of transactions and activities – involving internet, cyberspace,
WWW.
 APPLICATION - ICT

◦ Science and Engineering

◦ Medical
◦ Entertainment IS THIS LIST
◦ E-governance EXHAUSTIVE ?

◦ Commercial transactions
◦ Judiciary
 CONCEPT OF CYBER SPACE

◦"Cyberspace is the ‘place’ where a telephone conversation

appears to occur. Not inside your actual phone, the plastic
device on your desk. Not inside the other person's phone,
in some other city. The place between the phones. The
indefinite place out there, where the two of you, human
beings, actually meet and communicate."
 CONCEPT OF CYBER SPACE
◦ William Gibson first used the phrase 'cyber space,' which he later defined as "an evocative and essentially meaningless"
buzzword that could act as a code for all of his thoughts of cybernetic (transforming a text to hide its meaning).
◦ The evolution of IT gives rise to the "cyber space" in which internet provides all people with equal opportunities to access
information , analysis, data storage, etc. by using high technology
◦ Social networking sites have been very popular right from the beginning of the new millennium.
◦ These sites provided space for many to relax, connect with old friends and also get new also. But the cyber-criminal
organizations have sadly misused these sites to serve their criminal acts.
◦ In the past couple of years, people started spending more time on these networks as the populations are gradually
dependent on them. In the digital era, information technology growth influences the lives of people all over the world.
◦ Day after day, modern inventions and discoveries have broadened the science spectrum and created new problems for the
legal community
◦ These type of attacks – not on physical body but on virtual body, either personal or corporate.
 Cyber Space – An overview
◦ Technology has the communities, businesses and individual‘s life over the last two decades altering the
way people study, work and interacts with each other.
◦ People in different parts of the world can connect on a range of devices, such as computers, cell phones
or tablets in real time.
◦ A text message, photo, video, or email exchanged by a single person can be seen by hundreds of user in a
couple of seconds, and can go viral.
◦ The IT has now become a modern tool for harassing, doing misconduct or bullying, manipulating and
harming others.
◦ E-security: The security of the end-users has always been a matter of grave concern globally since the
internet has netted two ends of the globe now it is easier for a person(hacker) to sit in his remote physical
location and cause the data or financial breach of the Victims globally.
 Cyber space – An overview
◦ Through a socio-cultural viewpoint, there is a negative distinction between the
limitations of machine criminal activity of environmental (computer
availability) and societal (norms, legislation) which is a direct consequence of
technology globalization.
◦ Cyberspace, the modern frontier, is mankind's shared heritage, but sadly certain
people exploit the common heritage and thus cyberspace is indeed a new
frontier with various forms of crime. Now it's used to explain anything related
to computers, IT, the internet and the complex culture of the internet.
◦ The people participating in cyberspace are recognized as Netizens by the
fusion of two terms 'Net' and 'citizen.'
 Meaning of cyber space
◦ Cyberspace, it is the electronic structure of computer, bulletin board,
interlinked networks that is considered to be a boundless world providing
access to information, digital networking, and a type of virtual reality in
science fiction.
◦ Cyberspace means that ―the notional environment in which electronic
communication occurs or virtual reality.
 CYBER SPACE
◦ 'Cyber Space' is the cyber environment in which all information technology driven
contact and actions take place – can’t be placed spatially.
◦ It's made of intangible objects like the website, forum, social networks, personal
information, reputation and email addresses.
◦ Cyber space can be called an online global community with quick connectivity and
no territorial barriers
◦ Cyber space is the interactive system of computer networks where online
communication takes place between the people and where people can
communicate, exchange ideas, transfer knowledge, provide social support, perform
business, create artistic media, direct actions, participate in political dialogue, etc.,
 Encryption and Cryptography
◦ Encryption is the method by which information is converted into secret code that hides the
information’s true meaning – accessed by authorized parties only – algorithm to encrypt the data
and a secret key to decrypt it.
◦ The science of encrypting and decrypting information is called Cryptography – securing
information by transforming into a secured format for transmission across insecure networks-
provides methods of protecting data through encryption and related processes.
◦ Phishing – Attempting to mimic an official email from a trusted organization to lure individuals
into revealing login information or other personal information.
◦ Asymmetric Crypto System – Section 2 (1) (f) of ITA means a system of a secure key pair
consisting of a private key for creating a digital signatures and a public key to verify the Digital
signatures.
◦ Symmetric Encryption - Algorithm relies on a single key for encryption and decryption of
information. Both the sender and receiver of the message need to have a pre-shared secret key
that they will use to convert the plaintext into ciphertext and vice versa
 CYBER SECURITY
◦ Cyber security is strategy against unauthorized access or threats to computers, programs, networks,
personal data, etc.,
◦ Cyber security is basically a technical approach to safeguarding systems from such attacks. All threats to
computer system or network and all vulnerability by good cyber security recognize. It identifies the cause
and fixes, as well as ensuring system security. Strong cyber security systems are focused on a blend of
human and technical elements
◦ Section 2 (1) (nb) means protecting information, equipment, devices, computer, computer resource,
communication device and information stored therein from unauthorized access, use, disclosure,
disruption, modification or destruction – CYBER SECURITY
◦ "Cyber cafe" means any facility from where access to the Internet is offered by any person in the
ordinary course of business to the members of the public. Sec.2(1)(na) of IT Act, 2000)
 DEFINITION CLAUSE
◦ Digital Signature means authentication of any electronic record by a subscriber by means of an
electronic method or procedure in accordance with the provisions of section 3. Sec.2(1)(p) of IT Act,
2000
◦ Information includes data, message, text, images, sound, voice, codes, computer programmes, software
and databases or micro film or computer generated micro fiche. Sec.2(1)(v) of IT Act, 2000
◦ Electronic signature means authentication of any electronic record by a subscriber by means of the
electronic technique specified in the second schedule and includes digital signature. Sec.2(1)(ta) of IT
Act, 2000
◦ Electronic Record means data, record or data generated, image or sound stored, received or sent in an
electronic form or micro film or computer generated micro fiche. Sec.2(1)(t) of IT Act, 2000
• Private Key means the key of a key pair used to create a digital signature. Sec.2(1)(zc) of IT Act, 2000
• Public Key means the key of a key pair used to verify a digital signature and listed in the Digital
Signature Certificate. Sec.2(1)(zd) of IT Act, 2000
 CL – contd.
◦ Cyber law encompasses laws relating to – Cyber crimes, Electronic and digital signatures, IP
and Data protection and privacy.
◦ The terms Internet and WWW – distinct from each other
◦ Internet is the global data communications system. It’s a hardware and software infrastructure
that provides connectivity between computers.
◦ Web is one of the service communicated via Internet – connected by Hyperlinks and URLs
◦ Use of inter – networked information technology.
◦ Technological revolution has ushered in new platforms and methods for variety of crimes in
and through cyber space.
 Categorization of cyber crimes
◦ Criminal activity that uses computers as tools to commit an offence ( phishing, identity theft,
cyber stalking etc.)
◦ Criminal activity that targets computers; for example, virtues or malware attacks targeting
networks or devices.
◦ Cyber crimes has been one of the greatest threats to mankind with the incidence of cyber
crimes increasing enormously during the covid 19 pandemic.
◦ Features of Internet like borderless transactions, anonymity, ease of access, speed, work from
anywhere, facility and lack of knowledge about cyber laws are some of the reasons for an
unprecedented growth in crimes related to the computer.
◦ https://cybercrime.gov.in is the National Cyber crimes reporting portal.
 Need of Cyber law
◦ Techno-savvy environment, the world is becoming more digitally sophisticated and so are the crimes
associated with it.
◦ Internet was initially developed as a research and information sharing tool – unregulated manner.
◦ As time passed it became more transactional with e-business, e-commerce, e-governance and e-
procurement.
◦ CL and its application has gathered great momentum.
◦ Digitalized world – everyone are affected by Cyber crimes.
◦ While enacting the Information Technology Act, 2000 – the legislative intent has been two fold, one that
the enactment of such a nature should ignore the national or municipal perspectives of information
technology –
◦ That the enactment to have an international perspective as advocated by the said Model Law.
 Technology & Cyber law
◦ Technology per se is never a disputed issue but for whom and at what cost has been the issue in the ambit
of governance.
◦ This Cyber revolution holds the promise of quickly reaching the masses as opposed to the earlier
technologies which had a trickledown effect.
◦ Such a promise and potential can be realized with an appropriate legal regime – based on Socio-economic
matrix.
◦ IT Act, 2000 is based on the resolution of the GA of UN. Regarding the Model law on E-commerce
earlier adopted by the United Nations Commission on International Trade Law (UNCITRAL) in its 29th
session.
 CYBER LAWS IN INDIA
◦ In India cyber laws – IT Act, 2000 – purpose of the Act – provide legal
recognition to E-commerce and to facilitate filing of electronic records with the
government.
◦ Act, Rules and Regulations – comprised are,
◦ Information Technology Act, 2000.
◦ Information Technology ( Certifying Authorities ) Rules, 2000.
◦ Information Technology ( Security Procedure) Rules, 2004.
◦ Information Technology ( Certifying Authority) Regulations, 2001.
◦ Information Technology ( Intermediary Guidelines) Rules, 2011.
 NEED OF CYBER LAW
◦ The arrival of Internet signaled – rise of new and complex legal issues.
◦ Enactments – way back- relevant social, political, economic and cultural scenario
of that time.
◦ The existing laws of India- most benevolent and liberal interpretation- could not be
interpreted in the light of the emerging cyberspace to include all aspects relating to
different activities in cyberspace.
◦ None of the existing laws gave any legal sanction or validity per se to the activities
in cyberspace.
◦ The legal infrastructure can only be given – enactment of relevant cyber laws as
the traditional laws have failed to grant the same.
◦ This was the conducive atmosphere for the need of enacting relevant cyber laws in
India.
 History of IT Act, 2000
◦ IT Act is the outcome of the resolution - General Assembly of UN- Model law
on E-commerce on ITL.
◦ All states give favorable consideration to the said Model law while revising
enacting Cyber law – uniformity .
◦ Mother legislation regulating the use of computers, networks.
◦ Legislation has touched varied aspects pertaining to electronic authentication,
digital signatures, cyber crimes and liability of networks service providers.
◦ Aims at providing legal recognitions for transactions carried out by means of
electronic data interchange and other means of electronic communication-
alternative of paper- based methods.
 SALIENT FEATURES
◦ IT Act, 2000 was developed to promote the IT Industry, regulate E-commerce,
facilitate e-governance and prevent cybercrime.
◦ The Act also sought to foster security practices within India that would serve
the country in a global context.
◦ The term digital signatures- replaced with electronic signature – more
technology neutral
◦ Dedicated interpretation for the term ‘ Communication device’, cyber café,
intermediary.
 SALIENT FEATURES – Contd.
◦ Section 10A has been inserted to the effect that contracts concluded
electronically shall not be deemed to be unenforceable solely on the ground
that electronic form or means was used.
◦ Amendment in Section 69 to curbe the increasing acts of terrorism in the
nation that remains a threat ,
◦ Section 81 – inserted as non-obstante clause – overriding effect – Copyright
Act, 1957.
◦ There are various rules notified under the IT Act, 2000 which is not exhaustive
but prescriptive in nature.
 JURISDICTION OF CL
◦ Jurisdiction is the power or authority of the court to hear and determine the cause and adjudicate upon the
matter that are litigated before it
◦ Cyber Jurisprudence is the study of laws which is directly related to cyber crimes per se.
◦ It also describes the principles of legal issue, which exclusively regulates the cyberspace and internet.
◦ Cyber space has no physical ( national ) boundaries.
◦ Its an ever-growing exponential and dynamic space.
◦ Its associated with all the areas of business which have a technological bend.
◦ The area of concern for cyber law are, E-COMMERCE, ONLINE CONTRACTS, BUSINESS SOFTWARE
PATENTING, E-TAXATION, E-GOVERNANCE AND CYBER CRIMES.
◦ BUDAPEST CONVENTION - India declined as signatory- as it was not the part of the drafting-
reconsideration since 2018 due to increasing cyber threats,
 Introduction- IT Act 2000
◦ General Assembly of the UN’s regarding the Model Law on Electronic Commerce earlier adopted by the
UN Commission on International Trade Law ( UNCITRAL).
◦ It recommends that all states to give favourable consideration to the Model Law on E-commerce when
they enact or revise their laws, in view of the need of the uniformity of the law applicable to alternatives
to paper-based methods of communication and storage of information.
◦ Facilitating International trade and as an alternative to paper-based methods of communication and
storage of communication.
◦ Promote efficient delivery of government services by means of reliable electronic records.
◦ The Act further amends the IPC, IEA, The Bankers books evidence Act, and RBI Act, 1934.
 DESCRIPTION – IT ACT
◦ Article 253 – Legislation for giving effect to International Agreements. ( Kashmir)
◦ Any offence or contravention committed outside India by any person – Section 75(1) of IT Act, 2000.
◦ IT Act also unfolds various aspects of IT to promote efficient delivery of government services by means
of reliable electronic records.
◦ Legislative intent while enacting IT Act – two fold – 1. enactment of such nature shouldn’t ignore the
national or municipal technologies of IT – 2. Enactment to have International perspective as advocated by
the said law.
◦ Whole of INDIA and save as provided also to any offence or contravention thereunder committed outside
India by any person – in the true spirit of “One wired world”.
 FIRST SCHEDULE, DOC’S OR
TRANSACTIONS- NON APPLICABILITY

◦ Nothing in this Act shall apply to documents or transactions specified in 1st schedule. – section 1(4).
◦ Negotiable Instrument, Power of Attorney as defined in Act, 1882, Trust as defined in Act, 1882. A will as
defined in clause 2 (h) of the Indian Succession Act, 1925, including any other testamentary disposition by
whatever name called, any contract for the sale of conveyance of immovable property or any interest in such
property.
◦ This is due to conversion of those documents/instruments into their electronic functional equivalent
(electronic records).
 Legislative competence ?
◦ A paradigm shift has taken place in jurisprudence - tangible rights have given way to intangible rights.
◦ New society has emerged from nowhere and is growing exponentially.
◦ With the enactment of IT Act, 2000, law has taken a quantum jump to include even the intangibles under
its purview. – proactive piece of legislation.
◦ To facilitate International Trade and an alternative to Paper based methods of communication and storage
of information.
◦ Grey areas – lack of confidence building measures – consumer protection – draconian power to the police
– silent of IPR, Taxation and this list is not prescriptive.
 Affected by CL.
◦ Almost all transactions in shares are in Demat form. taking away the hassles of paper handling into
electronic documents
◦ Companies depend on computer networks and keep their data in electronic form
◦ Government forms, Use of Credit cards by consumers.
◦ For Communications purposes- mails, SMS.
◦ Non-cyber crimes – important evidence are found in digital devices
◦ Increase of Cyber crimes – online banking frauds, share trading fraud, tax evasion, pornography.
◦ Digital signs and e-contracts are fast in replacing conventional methods
 Digital and Electronic signatures
◦ Digital code which is attached to an electronically transmitted document to verify its contents and
senders identity – Digital signatures .
◦ Usually generated and authenticated by Public Key Encryption.
◦ It’s a kind of an assurance of evidence of origin, identity and status of an electronic documents,
transactions or message.
◦ Defn. – Section 2 (1) (P) of ITA – Digital Signatures – means authentication of any electronic
record by a subscriber by means of an electronic method or procedure in accordance with the
provisions of section 3
◦ Electronic Signatures – Sec. 2(1) (ta) – authentication of an electronic record by means of an
electronic technique specified in second schedule and includes Digital Signature per se.
◦ Chapter II deals with the concept of Digital and Electronic Signatures.
 PROACTIVE LEGISLATION ?
◦ One Act syndrome – Certain limitations – can’t answer all the queries- contd. Legislative activities is the need of
the hour to accerlate these initiatives better new medium requires new laws – Indian Telegraph Act, 1993 and
Indian Post Office Act of 1888 and Indian Wireless Telegraphy Act, 1993 needs to be amended to bring them at
par with the new technological development. – should we emulate the concept of western legal multiplication ?
◦ Role of Judiciary- IT is different from other branches of law in the sense that it is dynamic rather than static. –
Computer both weapon of offence and victim of crime – always identified as weapon of crime. – Judiciary to
ascertain the intention of legislature behind the Act – Judges lack the Technological temperament to do justices
with nuances and subtleties of IT law is based on a narrow premise.
◦ Indian courts are largely relying on US case laws – Indian Judiciary tempted to use - Indian Case law still in
Infancy – Judiciary not to get swayed by the doctrines propounded by the US courts at the cost of already
established national law principles.
 OTHER FACTORS
◦ Assimilating technology – Case Laws- CIT v. Associated Distributors Ltd. (2008) 7SCC 409 – court had
taken the meaning of bubblegum from Wikipedia
◦ Judges as Technocrats – Judge needs to wear a hat of technocrat as well – lack of appreciation of
technology is a pertinent issue – Kajal sen v. State of Assam AIR 2000 SC 617 – courts should appreciate
the evidence minutely, carefully and to analyse it.
◦ Bridging a Digital Divide – act of this nature would divide the society into digital have’s and digital
haven’t – the country is on its way to become one wired nation – justice delivery system haven’t become
a grinding hart.
◦ Digital core is expanding horizontally and everyday communication connectivity is rising across India.
 GENERALISATION OF ITA
◦ IT Act, 2000 and the IPC each have provisions to penalize cyber crimes and overlap or run parallel to each other.
◦ Section 292 IPC & Section’s 67, 67A, 67B of ITA similarly criminalize publishing or transmitting obscene
content through electronic media.
◦ Section 378 and Section 43 and 66 of the ITA penalizing activities such as hacking, theft of data, contamination
of computer systems and disrupting
◦ Internet requires an enabling and supportive legal infrastructure in tune with the times. This legal infrastructure
can only be given by the enactment of the relevant Cyber laws as the traditional laws have failed to grant the
same.
◦ E-commerce, the biggest future of Internet, can only be possible if necessary legal infrastructure compliments the
same to enable its vibrant growth
 SALIENT FEATURES OF ITA
◦ The term 'digital signature' has been replaced with 'electronic signature' to make the Act more technology
neutral.
◦ A new section has been inserted to define 'communication device' to mean cell phones, personal digital
assistance or combination of both or any other device used to communicate, send or transmit any text
video, audio or image.
◦ A new section has been added to define cyber cafe as any facility from where the access to the internet is
offered by any person in the ordinary course of business to the members of the public.
◦ A new section 10A has been inserted to the effect that contracts concluded electronically shall not be
deemed to be unenforceable solely on the ground that electronic form or means was used.
 Salient features – contd.
◦ The damages of Rs. One Crore prescribed under section 43 of the earlier Act of 2000 for damage to
computer, computer system etc. has been deleted and the relevant parts of the section have been
substituted by the words, 'he shall be liable to pay damages by way of compensation to the person so
affected’.
◦ A new section 43A has been inserted to protect sensitive personal data or information possessed, dealt or
handled by a body corporate in a computer resource which such body corporate owns, controls or
operates. If such body corporate is negligent in implementing and maintaining reasonable security
practices and procedures and thereby causes wrongful loss or wrongful gain to any person, it shall be
liable to pay damages by way of compensation to the person so affected.
 SALIENT FEATURES – CONTD.
◦ Sections 66A to 66F has been added to Section 66 prescribing punishment for offences such as obscene
electronic message transmissions, identity theft, cheating by impersonation using computer resource,
violation of privacy and cyber terrorism.
◦ A proviso has been added to Section 81 which states that the provisions of the Act shall have overriding
effect. The proviso states that nothing contained in the Act shall restrict any person from exercising any
right conferred under the Copyright Act, 1957.
◦ In view of the increasing threat of terrorism in the country, the new amendments include an amended
section 69 giving power to the state to issue directions for interception or monitoring of decryption of any
information through any computer resource.
 SALIENT FEATURES – CONTD.
◦ Sections 69A and B, two new sections, grant power to the state to issue directions for blocking for public
access of any information through any computer resource and to authorize to monitor and collect traffic
data or information through any computer resource for cyber security.
 CYBER CRIME
◦ At the Tenth United Nations Congress on the Prevention of Crime and Treatment of Offenders, in a workshop
devoted to the issues of crimes related to computer networks, cybercrime was broken into two categories and
defined thus:
◦ Cybercrime in a narrow sense (computer crime): Any illegal behavior directed by means of electronic
operations that targets the security of computer systems and the data processed by them.
◦ Cybercrime in a broader sense (computer-related crime): Any illegal behavior committed by means of, or in
relation to, a computer system or network, including such crimes as illegal possession [and] offering or
distributing information by means of a computer system or network.
◦ The OECD Recommendations of 1986 included a working definition as a basis for the study: Computer-related
crime is considered as any illegal, unethical or unauthorized behaviour relating to the automatic processing and
the transmission of data
 E-COMMERCE

◦ E-commerce is the businesses transaction of buying and selling of products and

services by & customers solely through electronic or internet medium, which is
happened without using any paper documents.
◦ The ‘Organization for Economic Cooperation and Development’ (OECD)
defines E-commerce as a new way of doing business, qualifying it as business
occurring over networks which uses non-proprietary protocols that are
established through an open standard setting process such as the Internet.
 E-COMMERCE
◦ It’s the commercial transactions of services in the electronic format.
◦ In the online environment- series of contractual obligations form online contracts. ( Offer and Acceptance )
◦ There will be a chain of successive events which lead to the formation of contract.
◦ PATENT – protects process whereas, COPYRIGHT – protects expression.
◦ Computer programs has thousands of instructions – Programs qualify for COPYRIGHT and Algorithms and
Techniques qualify for PATENT.
◦ E – commerce is a tool to enterprise integration.
◦ E-commerce is the businesses transaction of buying and selling of products and services by & customers solely
through electronic or internet medium, which is happened without using any paper documents.
◦ Cultivation of buying and selling goods or products and services through online consumer services on the basis
of internet
 ISSUES IN GLOBAL E- COMMERCE
◦ The e-commerce model legislation has been accepted by the UNCITRAL, but whenever an international
model code is formulated it is accompanied with its own safeguards to the individual state sovereignty
wherein the Municipal Legislation keeping the model laws as standards may deviate in accordance to its
own municipal laws.
◦ Internet is open to the globe and hence the jurisdiction of the cases has been given to all the courts.
◦ E-contracts made in the cyber-world have been given legal recognition and the liabilities are also
enforceable but the same becomes a mammoth task when parties belong to two different nations and have
not made a clause regarding the application of specific law.
◦ Various facets of taxation such as tax collection, collection of sales tax, determination of taxpayer’s
residence, determination of the origin of income, jurisdiction are inherently a difficult task in the plane of
taxation, but on integration with the fact of expansion of the market to the present scale of globe the
calculation of the Taxes becomes additionally difficult, wherein various nations apply various tax
evaluation methods in accordance to their own legislations.
 PROS - E-COMMERCE
◦ Global e-commerce is like an ever-expanding universe of sellers and buyers
and products, it becomes difficult to keep a tap at the copyright violation in
such a huge number to deal with.
◦ Lowers the Cost of sale
◦ Business platform unaffected by the barrier of time and distance
◦ Cheapest means of doing business
◦ Less delivery time and less labour cost etc.,
◦ Provides solution by decimating cost in price fixation
 CONS OF E-COMMERCE
1. Fewer people using E-commerce: Indian trade depended heavily on the local traders and businessmen who were unorganized to run the
show at the grassroots levels. Average household still prefers the physical market over e-market, there has been a great increase in the
number of internet users but it has yet not attained the preference similar to the level of Local markets.
2. Unable to personally or physically examine the product: the physical examination of the product has always been a must for a
conventional purchase of commodities, giving the purchaser a sense of control over the quality of the goods or services to be consumed,
but in the era of e-commerce these conventional methods are losing their glory.
3. Special and costly hardware and software are required: Although the presence in the digital world requires lesser investments that of
physically purchasing a place but, the spending on the software then increases and so does the spending on the hardware.
4. The website must be maintained and updated regularly: the platform of communication between the consumer and the seller being the
internet, regular maintenance of the same is a must in order to keep up the tempo of the services offers to rise.
5. Skilled people are required to maintain the website: the skilled people are required to not just maintain the level but to constantly
keeping on improving into a better and better platform as it provides the safety to the surfers of the website from the antagonist software or
viruses.
6. Not suitable for perishable commodities: the situations where the money has to be spent on e-commerce items ends up increasing the
investment made by the seller hence reducing his profits. Hence e-commerce is not suitable for Perishable commodities. But the entities
such as that of Big Basket have tapped into this market sector of the consumers already
 ETHICS IN E-COMMERCE
◦ Ethics is always a crucial component of any field.
◦ The ethics in e-commerce is very important as the unethical or oppressive behaviour of a business entity
may ruin the balance of the market.
◦ The Company’s core values and its guiding principles are very crucial for a new business to operate and
forms a part of the Company’s ethics.
◦ The ethical and legal duty of the Company to maintain the secrecy of the data of the customer and invest
upon the encryption of the same to save it from the hackers.
◦ The Ethical duty of the Companies also includes not to make a misleading statement regarding its
products, i.e. they must not promise stars to the consumers just to gain the loyalty of the consumers.
 E- CONTRACTS
◦ The exercise of E-Commerce is based on electronically made contracts known as E-Contracts
◦ E-contracts are conceptually very similar to present form of traditional commercial contracts. Vendors or seller
present their products, prices and terms to their prospective buyers. Buyers observed and consider their options,
negotiate prices and terms (where possible), place orders and make payments through the way as like as online
method. Then, the vendors deliver the purchased products to the buyers.
◦ Under the provisions of the Information Technology Act, 2000 particularly Section 10-A, an electronic contract
is valid and enforceable – only pre-requisite in regard with E- Contracts – it should meet the necessary
requirements as mentioned in Section 10 A of the Information Technology Act,2000 – validity and enforceability
of E- Contracts – was inserted in the Information Technology Amendment Act, 2008

1. Offer and Unconditional Acceptance - Which may be made online or by e-mail communication.
2. Lawful Purpose and Consideration
3. Capacity of Parties and Free Consent - Parties to a contract are capable of entering into a contract, if they
satisfy the requirements 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.
 E-SIGNATURES
◦ An electronic signature is defined by the Information Technology Act, section 2 (1) (p) as the
authentication of any electronic record by a subscriber by means of the electronic technique specified in
the second schedule and it includes a digital signature.
◦ Section 5 of the Information Technology Act says that where any law requires that information or any
other matter be authenticated by affixing a signature or any document signed by or bear the signature of
any person, then such requirement shall be deemed to have been satisfied.
◦ E contracts are contracts that are not paper based and are electronic in nature. These contracts are
generally made for speedy entering into a contract or for the convenience of the parties.
 E-CONTRACTS - TYPES
• Click-wrap- or Web-wrap Agreements are those whereby a party after going through the terms and
conditions provided in the website or program has to typically indicate his assent to the same by way of
clicking on an ‘I Agree’ icon or decline the same by clicking ‘I Disagree’.
• The shrink wrap Agreements- these are the agreements where communications of an offer or
acceptance in the web-click mode is complete when the addressee is in receipt of the electronic record as
defined in 13(2) of the IT Act.

• The Electronic Data Interchange- these contracts are used in trade transactions which enables the
transfer of data from one computer to another in such a way that each transaction in the trading cycle can
be processed with virtually no paperwork
 Requirements of E-Contracts
1. Clear identification of the contracting parties.
2. Clear indication of the subject of the contract.
3. Clear indication of the time period of validity.
4. The contract has to have valid signatures of the involved parties certifying their acceptance of the
liabilities laid down in the contract.
5. The signature should be accompanied by a date indicating the start of the contract validity. Non-
repudiation, i.e. nobody should be able to change the content of the contract after the contract is signed.
 E-Contracts - An Overview
◦ Information Technology (Amendment) Act, 2008 has substituted the term ‘digital signature’ with the term
‘electronic signature.’
◦ A digital signature is the technology specific and is irreversibly unique to both the document and the
signer.
◦ However, an electronic signature is technology unbiased and general in nature. However, there is no
standard for electronic signature
◦ It can be either a typed name or digitized image of a handwritten signature. Indian courts do recognize
contracts executed over email.
 Judicial Interpretations
◦ In the case of Trimex International FZE Limited, Dubai vs. Vendata Aluminum Ltd., 2010 (1) SCALE
574, The Apex Court of India held that the contract between the parties was unconditionally accepted through
e-mails and was a valid contract which satisfied the requirements of the ICAand ITA.
◦ State of Delhi Vs Mohd. Afzal and Others held that," Electronic records are admissible as evidence.“
◦ Internationally in 1998, the United States recommended that UNCITRAL develop an international convention
on electronic contracts based on the pre-existing principles of the Model Law on Electronic Commerce
(MLEC) adopted by UNCITRAL in 1996. These principles include technological neutrality, national source
neutrality, and party autonomy in the choice of applicable contract law and rules.
◦ According to the Indian law on the basis of E-contract which is the part of the E-commerce. E- Commerce and
E-contract in India is a totally different class.
◦ It has all the advantages of profit making and commercial viability but is neither regulated by any dedicated e-
commerce law, although we have IT Act, 2000, which happens to be the first Cyber Law in India. It is based on
UNCITRAL (United Nations Commission on International Trade Law) model law. It provides treatment for
users of electronic communications for business on the basis of e-contract & paper based communication.
 JUDICIAL INTERPRETATIONS
◦ Indian courts have dealt with cases where the parties to a contract had unequal bargaining positions.
◦ Indian Contract Act states that if the consideration or object of the contract as opposed to public policy or
is immoral or is fraudulent or involves injury to the person or property of another person, then the
contract cannot be valid.
◦ Lily White V R Munuswami, AIR 1966 Mad 13, (1965) 1 MLJ 7, The court held that a limitation of
liability clause printed on the back of a bill issued by a laundry, which restricted the liability of the laundry
to 50% of the market price of the goods in case of loss, was against public policy and therefore void.
◦ LIC India v. Consumer Education & Research Center, 1995 AIR 1811; 1995 SCC (5) 482; JT 1995
(4) 366; The Supreme Court declared certain clauses in the policy, which restricted the benefit of the policy
only to the Government employees, as void under article 14 of the Constitution. Hence, it is essential to
have well thought out terms in online contracts, giving adequate opportunity to the customers to familiarize
themselves with the terms of the contract.
 SUMMARY – E-CONTRACTS
◦ E-contracts are well suited to facilitate the re-engineering of business processes occurring at many firms
involving a composite of technologies, processes, and business strategies that aids the instant exchange of
information
◦ - Own merits and demerits - One hand they reduce costs, saves time, fasten customer response and
improve service quality by reducing paper work, thus increasing automation.
◦ E-contracts are the ultimate example of demonstrating how complex law is and how it adjusts itself
according to society's needs.
◦ E-contracts are one of the most desirable fields of law, along with all the difficulties and concerns,
because they satisfy the needs of the masses.
◦ With relevant legislative changes and judicial precedents, India will be productive in the evolution of e-
contracts. There is a need to cover all the aspects of E-contracts in a single, comprehensive and updated
legislation to the protection of consumers and traders in E-commerce and for enforcement of E-contracts.