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

Which of the following best describes an e-contract in the sense used in the IT Act and the Contract Act?

An e-contract is one in which the proposals, acceptances or revocations are communicated in electronic form or by electronic records. It is not exempt from the essentials of a valid contract, and it is not restricted to companies or to online payment alone.

  1. AA contract in which only the payment is made online, while offer and acceptance are oral
  2. BA contract where proposals, acceptances or revocations are expressed through electronic records or electronic meansCorrect
  3. CA contract that is exempt from the essential elements of a valid contract
  4. DA contract that can be made only between companies registered in India

Explanation

Section 10A refers to contracts where communication of proposals, acceptances, and revocations is in electronic form or by electronic records. Online payment alone does not make the formation electronic. An e-contract still needs the essentials of a valid contract, and it is not limited to companies.

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