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CMA Foundation · Fundamentals of Business Laws and Business Communication · E-Contracts and E-Signature - Meanings and Requirements

Kiran Exports emails Zenith Ltd: 'We agree to sell you oil.' Zenith emails back: 'Accepted.' Nothing shows what kind or quantity of oil is meant, and nothing in the trade indicates it. What is the position?

The agreement is void for uncertainty under Section 29 of the Contract Act. Section 10A of the IT Act only stops the electronic medium from being a ground of unenforceability; it does not cure a substantive defect such as meaning that is not certain or capable of being made certain.

  1. AThe agreement is enforceable because Section 10A protects electronic contracts
  2. BThe agreement is voidable at Kiran's option
  3. CThe agreement is valid but only for a reasonable quantity fixed by the court
  4. DThe agreement is void for uncertainty under Section 29 of the Contract Act, despite the electronic formCorrect

Explanation

Section 10A only prevents a contract being treated as unenforceable solely due to the electronic medium. It does not cure other defects. Under Section 29, agreements whose meaning is not certain or capable of being made certain are void, as in the 'hundred tons of oil' illustration.

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