Importance of E-Contracts a.k.a. Terms and Conditions

In today’s era of digitization, we speak of software eating the world, the Internet of Things and we classify “data” by declaring it Big. The market analyses shows that there are over 24 million online stores worldwide and e-commerce is estimated to contribute $4.5 trillion (14.1%) in retail sales by 2021, expected to rise to 22% by the year 2023. As a result, there has been a tech tonic shift from traditional contracts to E-contracts. With the rapid increase of the digital population in India, online businesses and services are redefined every second.

The combination of technology along with a huge amount of data availability has blurred the business boundaries. This has given rise to data privacy and data protection issues. Adding to it, crimes like identity theft, screen scraping, abuse of content, etc. have been on the rise. It is not out of place to mention that business owners operating their websites hesitate (and sometimes do not) pay attention in inculcating business-specific terms of use & privacy policy, thus giving birth to a plethora of legal cases against them. To tackle all such issues, E-contracts has emerged as a new alternative for boosting the digital economy.


E-contracts are contracts that take place through a digital mode of communication like the internet. These contracts intend to reach directly through the consumers without any involvement of middlemen. These are legal documents used to establish a contractual relationship between website operators and their end-users. Similar to physical contracts and are governed by the provisions of the Indian Contract Act, 1872. All the essential elements of the Indian Contract Act provided under Section 10 such as offer and acceptance, lawful consideration, lawful object, consent, competency of parties, and the intention to create a legal relationship need to be fulfilled for an E-Contract to be a valid contract.

Due to the enforceable nature of the terms of use page, it is considered to be the most important page from the website owners’ perspective. This page sets forth the legal landscape of one’s website by providing rules, provisions, exceptions, disclaimers, etc. It acts as a safeguard tool for various online businesses and publications. Though not not mandated by law but its inclusion acts as a binding contract helping business owners avoid legal issues. Undoubtedly, this page puts the website operator in a win-win situation and safeguards the business from being woefully wronged.


1. They act as a legally binding contract between you and your users i.e. people who visit your website. This is the agreement that sets the rules and guidelines that users must agree to and follow in order to use and access your website or mobile app. In this agreement, you can include the necessary sections to inform users of the guidelines of using your website or mobile app, what happens if users are abusing your website or mobile app, and so on.

2. They grant you ownership over your content. You’re the owner of your logo, content (except for user-generated content) the design of the website, and so on. The content you own is protected by copyright laws. This kind of clause is commonly referred as the Intellectual Property clause, and it usually looks like this:

“The Site and its original content, features, and functionality are owned by [Owner of Website] and are protected by international copyright, trademark, patent, trade secret, and other intellectual property or proprietary rights laws.”

3. They limit the owner’s liability in cases where errors are found in the content presented on the website. This clause notifies users that the owner can’t be held responsible for any errors in the content presented, or for the information provided being accurate, complete, or suitable for any purpose.

4. Choice and disclosure of governing law. Usually, the Governing Law clause of a Terms and Conditions agreement refers to the jurisdiction that applies to the terms presented in the agreement. For instance, if your website is operated by a registered business in the state of Delhi in India, then the governing law of your Terms and Conditions would be presented something like this:

These terms and conditions are governed by the laws of the India and the jurisdiction for any dispute will be Delhi.

In summary, Terms and Conditions provide clarity as to what could and should happen in any given situation by providing the necessary clarity to your users by explaining their rights, duties and obligations.

-By Chandan Goswami

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