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

Mehta Traders in Surat emails an offer to sell 200 bags of rice to Kapoor Foods at an agreed rate. Kapoor Foods emails an unconditional acceptance. Which statement is correct?

A contract may arise. An unconditional electronic acceptance of a definite offer is effective, because Section 10A of the IT Act says a contract is not unenforceable solely because the proposal or acceptance was in electronic form. No printed or signed copy is needed.

  1. ANo contract arises because acceptance by email is not recognised
  2. BA contract may arise, since electronic acceptance cannot be denied enforceability solely for being electronicCorrect
  3. CA contract arises only after the emails are printed and signed
  4. DThe email acceptance is a mere invitation to offer

Explanation

Section 10A says communication of proposals and acceptances in electronic form does not make the contract unenforceable solely on that ground. The other Contract Act elements, such as consideration and free consent, must still be present, which is why the contract may arise. Printing and signing is not required by the section.

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