Enforcing an Electronic Contract

In one line

An electronic contract is enforced like any other, so the questions are capacity, free consent, unconscionability, the arbitration clause and proof, and each of them behaves slightly differently when the contract was made in four seconds by a person who did not read it.

Capacity

Section 11 of the Indian Contract Act, 1872: a person is competent to contract who is of the age of majority, of sound mind, and not disqualified.

The online problem is that age is asserted, not verified. A tick-box declaring that the user is eighteen proves nothing, and Mohori Bibee v. Dharmodas Ghose holds that an agreement by a minor is void ab initio, not merely voidable, so the platform gets nothing from the declaration.

Three consequences.

The contract is void, and the platform cannot enforce it against the minor.

Restitution is limited. Section 33 of the Specific Relief Act, 1963, allows a court to require a minor who seeks relief to restore benefits, and section 65 of the Contract Act has been held inapplicable to an agreement void because of minority. So a platform that supplied a service to a minor is in a poor position.

And the data protection statute now adds a duty. Section 9 of the Digital Personal Data Protection Act, 2023, requires verifiable consent of a parent or lawful guardian before processing the personal data of a child, and prohibits tracking, behavioural monitoring and targeted advertising directed at children. That is a separate obligation from contractual capacity, it commences on 13 May 2027, and it is what will actually force age assurance. Chapter 1050.

Free consent

Section 14 of the Contract Act: consent is free when not caused by coercion, undue influence, fraud, misrepresentation or mistake.

Undue influence, section 16, is the limb with real work to do. It applies where one party is in a position to dominate the will of the other and uses that position to obtain an unfair advantage, and sub-section (2)(b) includes a relationship where one party's position makes the other's ability to contract on equal terms illusory. A standard form contract with a dominant platform is not automatically within section 16, and no Indian decision has so held, but the argument is available where the terms are unfair and the user has no alternative.

And section 13, consent to the same thing in the same sense, is the provision that bears on browse-wrap: a user who never saw the terms did not consent to them. Chapter 910.

Unconscionable and unfair terms

This is where the marks are, and there are four routes.

The common law route. Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly, decided in 1986, in which the Supreme Court held that a term in a standard form contract between parties of unequal bargaining power, which is unconscionable, unfair and unreasonable, may be struck down under section 23 of the Contract Act as opposed to public policy. The Court expressly contemplated printed contracts of adhesion offered on a take-it-or-leave-it basis.