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

Meera Textiles of Surat accepts a purchase proposal from a buyer by e-mail, and the buyer later withdraws the proposal also by e-mail. Under Section 10A of the Information Technology Act, 2000, what is the legal position of a contract formed through such electronic communications?

A contract formed through electronic communications is not unenforceable merely because electronic form or means was used. Section 10A covers proposals, acceptances and their revocations. It does not require a paper copy, approval by a Certifying Authority, or any monetary limit for enforceability.

  1. AIt is unenforceable unless a written paper copy is signed later
  2. BIt is enforceable only if a Certifying Authority approves the e-mails
  3. CIt is not unenforceable solely because electronic form or means was usedCorrect
  4. DIt is valid only if the value of the contract is below a prescribed limit

Explanation

Section 10A says that where proposals, acceptances and their revocations are expressed in electronic form or by electronic records, the contract shall not be deemed unenforceable solely because electronic means was used. No paper copy, Certifying Authority approval or value limit is required by this provision. The other options add conditions not found in it.

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