15. Formation and Validity.

(a) In the context of the formation of contracts, unless otherwise agreed by the parties involved, an offer and the acceptance of an offer may be expressed by means of electronic records.

(b) Where an electronic record is used in the formation of a contract, that contract shall not be denied validity or enforceability on the sole ground that an electronic record was used for that purpose.

(c) A contract may be formed by the interaction of electronic agents. A contract is formed if the interaction results in the electronic agents’ engaging in operations that confirm or indicate the existence of a contract.

(d) A contract may be formed by the interaction of an electronic agent and an individual. A contract is formed if the individual has reason to know that the individual is dealing with an electronic agent and the individual takes actions or makes a statement that the individual has reason to know will cause the electronic agent to perform the subject of the contract, or instruct a person or electronic agent to do so.

Source: UNCITRAL Model Law, Article 11; UCC Article 2B §2B-204.

Comment: This section adopts the basic rule that offer and acceptance may be accomplished through the use of electronic exchange. There are a number of additional contractual issues that may arise, including acceptance that varies from the terms of an offer, and cases where an offer is made electronically and accepted in writing (or vice versa). The Act adopts a more general approach, simply giving recognition to electronic records as a means of forming a contract. This section also includes provisions governing the formation of contracts through the use of electronic agents, providing that enforceable agreements may be formed through the use of electronic agents.

16. Effectiveness Between Parties. As between the originator and the addressee of an electronic record, a declaration of intent or other statement shall not be denied legal effect, validity or enforceability solely on the ground that it is in the form of an electronic record.

Source: UNCITRAL Model Law, Article 12; Singapore Electronic Transactions Act §12.

Comments: This provision is included in order to establish the principle that in electronic contracts, the use of electronic communication should not be discriminated against. Expressions of will or intent issued in electronic form should be equally valid as written statements of this kind.

17. Attribution.

(a) An electronic record is that of the originator if it was sent by the originator himself.

(b) As between the originator and the addressee, an electronic record is deemed to be that of the originator if it was sent:

(i) by a person who had the authority (pursuant to a document in a non-electronic form) to act on behalf of the originator in respect of that electronic record; or

(ii) by an information system programmed by or on behalf of the originator to operate automatically.

(c) As between the originator and the addressee, an addressee is entitled to regard an electronic record as being that of the originator and to act on that assumption if:

(i) in order to ascertain whether the electronic record was that of the originator, the addressee properly and in good faith applied a procedure previously agreed to by the originator for that purpose; or

(ii) the data message as received by the addressee resulted from the actions of a person whose relationship with the originator or with any agent of the originator enabled that person to gain access to a method used by the originator to identify electronic records as its own.

(d) Section 17(c) shall not apply:

(i) from the time when the addressee has both received notice from the originator that the electronic record is not that of the originator, and had reasonable time to act accordingly;

(ii) at any time when the addressee knew or should have known, had it exercised reasonable care or used any agreed procedure, that the electronic record was not that of the originator; or

(iii) if in all the circumstances of the case, it is unconscionable for the addressee to regard the electronic record as that of the originator or to act on that assumption.

(e) Where an electronic record is that of the originator or is deemed to be that of the originator, or the addressee is entitled to act on that assumption, then, as between the originator and the addressee, the addressee is entitled to regard the electronic record received as being what the originator intended to send, and to act on that assumption. The addressee is not so entitled when the addressee knew or should have known, had the addressee exercised reasonable care or used any agreed procedure, that the transmission resulted in any error in the electronic record as received.

(f) The addressee is entitled to regard each electronic record received as a separate electronic record and to act on that assumption, except to the extent that the addressee duplicates the electronic record or the addressee knew or should have known, had the addressee exercised reasonable care or used any agreed procedure, that an electronic record received from the originator was a duplicate.

(g) Nothing in this section shall affect the law of agency or the law on the formation of contracts.

Source: UNCITRAL Model Law, Article 13; Uniform Electronic Transactions Act §202; Illinois Electronic Commerce Security Act §306.

In general, a person is bound by any electronic record he or she sends or by any transmission sent by an agent on behalf of that person. Additionally, under certain circumstances specified in this section, a recipient may lawfully regard an electronic record as originating from another specific individual, regardless of whether that specific individual actually is the originator, unless doing so would be unreasonable or unconscionable or the recipient knew or should have known that the electronic record did not come from the specified individual. However, an originator can disavow an electronic record once it has been sent, and not be held responsible for any reliance on such a record by the recipient, as of the time that the disavowal is received by the addressee and the recipient has had reasonable time to act accordingly.

18. Acknowledgment of Receipt.

(a) Sections 18(b), (c) and (d) shall apply where, on or before sending an electronic record, or by means of that electronic record, the originator has requested or has agreed with the addressee that receipt of the electronic record be acknowledged.

(b) Where the originator has not agreed with the addressee that the acknowledgment be given in a particular form or by a particular method, an acknowledgment may be given by:

(i) any communication by the addressee, automated or otherwise; or

(ii) any conduct of the addressee, sufficient to indicate to the originator that the electronic record has been received.

(c) Where the originator has stated that the electronic record is conditional on receipt of the acknowledgment, the electronic record is treated as though it had never been sent until the acknowledgment is received.

(d) Where the originator has not stated that the electronic record is conditional on receipt of the acknowledgment, and the acknowledgment has not been received by the originator within the time specified or agreed, or if no time has been specified or agreed within a reasonable time, the originator:

(i) may give notice to the addressee stating that no acknowledgment has been received and specifying a reasonable time by which the acknowledgment must be received; and

(ii) if the acknowledgment is not received within the time specified in Section 18(a), may, upon notice to the addressee, treat the electronic record as though it has never been sent, or exercise any other rights it may have.

(e) Where the originator receives the addressee's acknowledgment of receipt, it is presumed, unless evidence to the contrary is adduced, that the related electronic record was received by the addressee, but that presumption does not imply that the content of the electronic record corresponds to the content of the record received.

(f) Where the received acknowledgment states that the related electronic record met technical requirements, either agreed upon or set forth in applicable standards, it is presumed, unless evidence to the contrary is adduced, that those requirements have been met.

(g) Except as it relates to the sending or receipt of the electronic record, this section is not intended to address the legal consequences that may flow either from that electronic record or from the acknowledgment of its receipt.

Source: UNCITRAL Model Law, Article 14.

In cases where the electronic record was not stated to be conditional on receipt of acknowledgement, an originator may subsequently impose this condition and specify a time frame in which acknowledgement must be received, and if not received in that time frame, treat the original transmission as never having been sent. Of course, if an acknowledgement is received, a presumption can be made that the electronic record was received. Significantly, this section is not intended to address the legal consequences of the transmission or receipt of electronic records. For example, where an originator sends an offer to a recipient, the acknowledgment of receipt simply is evidence of receipt of the offer. Issues related to whether the offer is valid or has been accepted are left to general principles of contract law.

19. Time and Place of Dispatch and Receipt

(a) Unless otherwise agreed to between the originator and the addressee, the dispatch of an electronic record occurs when it enters an information system outside the control of the originator or the person who sent the electronic record on behalf of the originator.

(b) Unless otherwise agreed between the originator and the addressee, the time of receipt of an electronic record is determined as follows:

(i) if the addressee has designated an information system for the purpose of receiving electronic records, receipt occurs:

(A) at the time when the electronic record enters the designated information system; or

(B) if the electronic record is sent to an information system of the addressee that is not the designated information system, at the time when the electronic record is retrieved by the addressee.

(ii) if the addressee has not designated an information system, receipt occurs when the electronic record enters an information system of the addressee.

(c) Section 19(b) shall apply notwithstanding that the place where the information system is located may be different from the place where the electronic record is deemed to be received under Section 19(d).

(d) Unless otherwise agreed between the originator and the addressee, an electronic record is deemed to be dispatched at the place where the originator has its place of business, and is deemed to be received at the place where the addressee has its place of business.

(e) For the purposes of this section:

(i) if the originator or the addressee has more than one place of business, the place of business is that which has the closest relationship to the underlying transaction or, where there is no underlying transaction, the principal place of business;

(ii) if the originator or the addressee does not have a place of business, reference is to be made to the usual place of residence; and

(iii) "usual place of residence" in relation to a body corporate, means the place where it is incorporated or otherwise legally constituted.

(f)This section shall not apply to such circumstances as may be prescribed.

Source: UNCITRAL Model Law, Article 15.

20 .Applicable Law. Where a contract to which this Act applies is a transnational contract, and a dispute arises out of or in connection with, such contract, the following provisions shall apply:

(a) The dispute shall be decided in accordance with the rule of law designated by the parties as applicable to the substance of the dispute;

(b) Any designation by the parties of the law or legal system of a given country shall be construed, unless otherwise expressed, as directly referring to substantive law of that country and not to its conflict of laws rules;

(c) Failing any such designation of the law under subsection (a) by the parties the court or arbitral tribunal shall apply the rules of law which it considers to be appropriate given all the circumstances surrounding the dispute;

(d) In all cases the court of tribunal shall decide in accordance with the terms of the contract and shall take into account the usage of the trade applicable to the transaction;

Explanation: In this section "transnational contract" means a contract in which at least one of the parties is (i) an individual who is a national of or habitually resident in any country other than India; (ii) a body corporate which is incorporated in any country other than India; (iii) a company or an association or a body of individuals whose central management and control is situated in any country other than India; or (iv) the Government of a foreign country.