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However,in this matter,we will be discussing matter regarding the applicability of Contracts
Act 1950 to electronic contracts.Which means how far the Contracts Act 1950 can be used in
contract like electronic contracts.
Frequently parties to a contract do not always clearly address all of the contract terms. Terms
may be missing or unclear, or the parties may have exchanged conflicting documents. In these
cases, how are the terms of the contract determined?
The general rules of contract law follow a hierarchy of evidence when determining the terms
of a vague or incomplete contract, as follows:
a)The terms stated in the discussions and writings exchanged by the parties that are not in
conflict;
b)Terms implied by the current and past conduct of the parties;
c)Terms implied by industry custom and practice; and
d)Terms implied by law, i.e., damages for breach, liability for negligence, jurisdiction and
venue, etc.
If a planner and supplier exchange promises by e-mail the law will interpret this agreement
the same way it would interpret a more traditional contract written on paper. Parties to an
electronic contract should be just a careful in articulating the terms as they would be in
traditional contracts.
For those who want to engage in on-line contracting, two major issues arise:
(1) How can you be sure that the person with whom you are communicating is the person he
or she claims to be?
(2) Can an impersonator bind you to an electronic contract?
Since electronic communications does not involve business cards, letterhead or corporate
seals it is impossible for one party to determine the other party's authority to book a meeting
or sign a contract. Just because someone has a corporate e-mail address and says they are the
executive director, vice-president of special events or director of meeting planning does not
make it so. Parties to an on-line contract must still exercise due diligence to ascertain who
they are dealing with on the other side. The development of digital signatures (discussed
below) is helping to solve this problem.
Everyone is (or should be) concerned with someone else impersonating them and fraudulently
signing their name to contracts. The key issue of course is who, if anyone, is bound to these
contracts. Under current law a forged signature will only bind the forger, not the party being
impersonated. The other party to the transaction, however, may be left holding an empty bag
if the impostor can't be caught or identified or if the impostor is in no position to perform on
the fraudulent contract. The exception to this is if the real party ratifies the signature or was
somehow negligent and contributed to the forgery. This is just as true in on-line contracts as it
is in traditional paper contracts. Again, digital signatures (discussed below) are solving some
of these problems however new laws are being proposed that would hold business people
liable for not providing an adequate level of security for their digital signatures.
These issues are not unique to on-line communications. Impostors and persons without
authority operate in paper transactions as well. The difference is that in on-line
communications there is greater anonymity and greater ease in perpetrating fraud without a
great deal of financial investment. Technology companies and lawmakers are dealing with
these issues daily and the result is new techniques to combat the potential for fraud in on-line
communications. As mentioned above, one of these new techniques is the creation of digital
signatures (discussed below). A digital signature can provide assurance that the
communication was sent by a known party and not an impostor.
LEGAL REQUIREMENTS FOR ELECTRONIC CONTRACTS:
For the business world in general, and the meetings industry specifically, to embrace
electronic contracts the exchange and storage of these records must satisfy certain legal
requirements. These requirements generally include the following:
a) Authenticity
b) Integrity
c) Nonrepudiation
d) Writing and signature
e) Confidentiality
These requirements are not always present in every situation but they are applicable to most.
AUTHENTICITY
Authenticity is concerned with the source or origin of a communication. Who is the message
from? Is it genuine or a forgery? Every party to an electronic contract must have confidence
in the authenticity of the messages it receives. A party who fails to verify the other party's
identity in any transaction may have no recourse if a fraud is perpetrated. Communications
that cannot be authenticated in a tangible form may not be used as evidence in a court room.
INTEGRITY
Integrity is concerned with the accuracy and completeness of the communication. Both
senders and receivers of electronic communications must be able to tell: is the message sent
identical to the message received?, is the message complete or has something been lost in
transmission?, has the message been altered in any way either in transmission or in storage?
Messages sent over the Internet pass through many routing stations and packet-switching
nodes. Hence, there are many opportunities for messages to be altered along the way to their
final destination.For example, a meeting sponsor needs to know that a supplier's reply to a
request for proposal is accurate and can be relied on.
NONREPUDIATION
Nonrepudiation is concerned with holding the sender to the communication he or she sent.
The sender should not be able to deny having sent the communication if he or she did, in fact,
send it, or to claim that the contents of the communication as received are not the same as
what the sender sent if, in fact, they are what was sent. When a contract is in dispute, the party
relying on it must be able to prove that the other side actually agreed to the deal.
WRITING AND SIGNATURE
As a general rule, contracts do not have to be in writing or even signed by either party to be
enforceable. Contracts may be formed by conduct of the parties and may be oral.
The definition of a writing is not limited to ink on paper. Rather, the essence of the
requirement is that the communication be reduced to a tangible form. Electronic transmissions
recorded in a tangible form should meet the writing requirement. To ensure this result it is
probably necessary to preserve electronic communications, such as e-mails, in printed form or
in a computer log.In many cases, the law requires that an agreement be both in writing and
signed by the person who is sought to be held bound in order for that agreement to be
enforceable. If two parties are entering into a contract on-line, these writing and signature
requirements may apply.Generally, a signature is "any symbol executed or adopted by a party
with present intention to authenticate a writing.Therefore, a signature need not be ink on
paper -- rather, the issue is the intent of the signer. A symbol or code on an electronic record,
intended as a signature by the signer, should meet the requirement. Digital signatures should
certainly do so.
CONFIDENTIALITY
Hence,in the making of electronic contracts.there are some requirements that must be
mebraced.Particularly,there no side or add on elements that may distinguish a common
contract and electronic contracts as both applies almost same rules and procedures (most
likely)