Feelium E-contracts

We have already understood what an e-contract means. In simple terms, E-contracts are the electronic or digital version of traditional paper contracts. Now, let us see what elements are required for the creation and execution of an e-contract.

Essential Elements of an E-Contract

A contract or agreement between the parties is legally valid when it fulfills the requirements of the law regarding its formation. Elements form the base of a contract. Therefore, it is important to know what are the essential elements that a contract should have.

Following are the essential elements required for a contract:

1.Offer requirements to be made

Whether it is an online contract or a traditional one, the offer may not be made directly one-on-one. The consumer/user searches for the available products and services displayed on the website of the seller. Then the consumer selects what he would like to buy. The website showing the goods for sale does not make the offer. This is actually an invitation to make the offer and so can be changed at any time till the time of acceptance. The offer is initiated by the customer on the availability of products in the shopping cart for payment.

2.Offer needs to be acknowledged

The acceptance is generally taken by the business once the offer has been initiated by the consumer in reference to the invitation to offer. The offer is changeable at any time until the acceptance is made.

Processes for forming electronic contracts are as follows:

I. E-mail: The offers and acceptances between the parties can be exchanged by e-mail. It can be collected with faxes, paper documents, telephonic discussions etc.

II. Web Site Forms: Through the website, the seller can offer products or services. For example, software, clothes, tickets etc. The customer selects from the availability and places an order by completing the order form provided on the website. The products or services may be delivered later like clothes etc. or may be delivered electronically like e-tickets etc.

III. Online Agreements: Consumers/Users need to make an agreement online to be able to avail of the products/services. For e.g. by clicking on the “I accept” button when connecting software or by clicking on the “I agree” button when signing up for an email account.

3.Legal consideration

For any contract to be lawfully effective it must have legal consideration, it means when both the parties give and receive something in return. Hence, when a website makes a contract between two parties where a Legal Issue arises like a person provides a pornographic movie as consideration for purchasing an mp3 player, then such a contract is void.

4.Intention to create lawful relations

If the parties have no intention to create lawful relationships, then there is no possibility of contract between them. Generally, agreements that have a domestic or social nature are not considered contracts and therefore, are not enforceable. For example, a website that provides general data and instructions on health.

5.Parties must be able to contract

Contracts by minors etc. are void. The contracting parties must be lawfully competent to enter into the contract. Both natural and legal persons are capable of entering into a contract. Computers are not capable of becoming a party to the contracts. Both the buyer and the seller should be natural persons so, they are capable enough of being parties to the contract.

6.Free and Unaffected Consent

There must not be any confusion and disturbance of the will of any party to the contract to enter a contract. Usually, in online contracts, when there is no actual real-time communication between the parties involving the contract, then click-through the process ensures genuine and free consent. For example, consent between a website and the customer who buys through the website.

Essentials of an E-contract

7.Object needs to be lawful

A valid contract expects a lawful object. So, a contract for selling pornography or narcotic drugs is void. It is important to keep a record of the agreed contract. This may not be easy if there have been several email exchanges to add or exclude a part of the terms of the contract. It can also include negotiations and counteroffers between the contracting parties. So, it may be difficult in such a situation to determine who is the offeror and who has accepted the final offer. This makes difficult to define which party’s terms and conditions is to be applied. Hence, it is important to ensure that the parties are clear on the content of the final contractual terms.

8.Conviction and possibility of performance

A contract, to be effective, must not be unclear and there must be a possibility of performance. A contract, which is impossible to perform, cannot come into effect. For example, when a website promises to sell land on the moon.

So, these are the essential elements that are required to make a contract successful. The elements are important to make a contract come into effect and action in the eyes of law.