INTRODUCTION
Technology contract or E-Contracts are nothing but a valid contract where a number of users agree to them by various or multiple
umpteen website Technology contract are puzzle provisions which are
interrelated to each other and can’t negotiate one term without assessing other
term that will be impacted. The modes of E- Contact are formed to bring the
changes in the business world, management and international trade and by this Juncture
we need to see whether this legal framework in India bring any change or not.
To determine the validity of the technology contract there are certain legislation
like The Indian Contract Act, 1872, The
Information Technology Act, 2000 and The Indian Evidence Act, 1872. Forms of E-contract is formed exchange of E-mail, online agreement, website form. All the
above said forms are valid under Indian contract the major issues that are face
are free to consent, decision on the court jurisdiction. In any negotiation
especially in technology agreement because of the nature of players in the industry.
Negotiation is related to power and it comes in many sizes and resources. Now
days Indian legal system is adapting an E-Contract so the pressure on lawmaker
is more and has to keep the eye on the issue related to E – contract and to
adequately address them.
FORMS OF TECHNOLOGY CONTRACT
1. E-mail Agreement – Parties negotiating should be aware that the email contract is binding so they should be aware and be clear with the rule as the E-mail agreement are binding contract.
Case: Goel & Anor v Grant & Anor (As Joint Administrators of Meem SL Ltd) [2017] EWHC 2688[1]
2. Online agreement – Online agreement is of 3 types-
· Shrink wrap agreement -These are the licenses agreement as biding on the parties written on the software product that customer buy.
· Clickwrap agreement- These agreements are end user agreement. Parties give their consent by clicking to ok button or I agree.
· Browse wrap agreement - These include the user polices term of services of websites.
TECHNOLOGY
LICENSE AGREEMENT –
Essential for understanding include the following points: -
· The context in which license may occur.
· Key term of licensing agreement.
· Negotiation method.
· How to prepare for and negotiate a win licensing contract
When one party occur the intellectual property i.e., intangible asset then only the licensing agreement occur and it also occurs in a business relationship where other agreement is also important successful licensing agreement occurs when the negotiator understand the benefit of both the licensor. It’s not necessary that technology licensing involves technology transferor a complex set of term licensing agreement to reach to an end.
WARRANTIES
–
Warranties are basically the statement and promises
related to technology. The typical warranties are the parties have authority into the agreement all right to
grant license or fulfill the obligation in
that agreement warranties are ownership of IP. It is basically the service
performed in a professional workman like manner. Delivery to specification (SOW,
REP). Software operates in accordance with the documentation /REP Proposal.[2]
INDEMNIFICATION
CLAUSE –
These are contractual promises to pay for harm or
damages for specific circumstances.
Original intent of the indemnification clause is to give
the right to the people for the damages that occur under the agreed contract.
Initially intended with third party claim for which an existing contractual
doesn’t exist. Origin of indemnification and double dips at claim.
USE INDEMNIFICATION CLAUSE TO SCOPE LIABILITY AND RISK IN YOUR FAVOUR.
CONDITION: The right of indemnity
is given to a subject of particular condition and the purpose of these
conditions is usually to ensure that a party who is benefiting from the
indemnity does not cone in a bad situation or suffer loss by the party giving the
indemnity. According to section 4 of the unfair contract Term act it state the type
of indemnity in consumer contract: -
With reference to any contract a person dealing as consumer cannot be made to identify another person in respect of liability that may be incurred by others for breach of contact.[3]
LEGAL VALIDITY OF E- CONTRACT
INDIAN CONTRACT ACT 1872 – The law relating to contracts is governed by the Indian Contract Act, 1872. The Indian Contract Act 1872 has defined in Section 2(h) that contract means an agreement enforceable by law. This act tells us that a contract is valid if it’s made with a free consent of competent parties for lawful object and consideration. There is no specific way of communication for offer and acceptance it can be done in either way either verbally or written. It is acceptance of an offer and in return acceptance of that offer which results in a contract. Thus technology contract are valid as written contract the only condition which is to be fulfilled is to apply all the essential condition of a valid contract.[4]
THE INFORMATION TECHNOLOGY ACT, 2000
The validity of E- contract – Electronic contract gets its legal provision from technology contract 2000, This can be inferred from section 10 –A of the act. No negotiation in the E- contract for a valid contract there must be a free consent of a parties.
Digital signature - A Signature on the document is a sign that a person accepts the purpose recorded in a document. It is a systemic script related to a person. An electronic contract can be created by digital signature and recognized by the law of India. Verification of electronic records by electronic signature is considered reliable.
INDIAN EVIDENCE ACT, 1872 –
An E-Contract is basically a transfer of communication between 2 parties in respect of the transfer of goods and services. Any communication made electronically is recognized as valid evidence of a court of law. Section 65 of the Indian evidence act court in India recognize electronic contract. Section 65 B of Indian evidence act 1872 provides procedures for furnishing as an electronic document as evidence. The electronic document produced from the computer in printed and stored are considered as evidence in any proceeding without any further proof of originals. At the time of producing the document or mail through the computer it must be in control of a person and in regular use, e- mail must be receiving in the ordinary course of activities.
ISSUES AND CHALLENGES:
-
Capacity to contract –
The person who are parties to an electronic contract have the legal competence to
enter into an agreement often the individual has no identity as the other party
has no idea whether the part who as clicked on icon I agree has the legal
competence to enter into a contract.
As per the Indian contract act the party must be a
major to enter into a valid contract who are not competent to contract are void,
who are old enough are entering to an online contract by clicking I agree.
Free consent – Free consent is a very
important role for a valid contract in one-line contract there is no part for
negotiation and it is a disadvantage for the user. but there is always an
advantage or an option for a user to accept it or leave it. In the case of LIC
of India Vs Consumer Education and Research Centre, the Supreme Court has held
that “In dotted line contracts there would be no occasion for a weaker party to
bargain as to assume to have equal bargaining power”. He has either to accept
or leave the service or goods in terms of the dotted line contract. His option
would be either to accept the unreasonable or unfair terms or forgo the service
forever.” Hence it can be concluded that the user should be prudent while
giving his consent to avoid troubles.[5]
The decision on applicable law
– The Indian law provides two choices to apply personal jurisdiction i.e., to
apply the law of the site of the transaction, to apply the law of the forum or
to the first place which gave rise to the litigation. There is no bar that a
foreign law cannot be applied or Indian party cannot be subject to foreign
Jurisdiction. This emphasis on the selection of proper law.
The decision on the court Jurisdiction
- At very many geographical locations
E-contracts gives wide scope for arising cause of action for defending
geographical location it should be both expensive and frustrating. In an online
contract it should include the choice of forum clause. It gives a good legal
sense for the online service provider to limit it to one jurisdiction only. Online
service provider doesn’t have many choices they have to stick to one forum or
one jurisdiction nothing applicable law. They don’t have any other option or
any other choice accept to except by clicking on I agree; I accept or yes.
Intellectual Property OWNERSHIP: - This can be a tricky issue base rule: developer of IP owns the IP these rules can be varied contract and law. Copyright protected work employer generally owns the copyright in copyright protected work that employee has been hired to create ( s.13(3) copyright act ) but if a copyright protected work is not part of the employee’s job , then employee may own it does not apply to non –employee ( i.e. independent contractor or consultant) best practices is to have a contact that clarifies all rights and requires employee to assign all rights don’t forget “ moral rights’ ( in some countries , cannot be waived ).
Patentable inventions nothing helpful in the patent act about employers and employee General the rule is employee owns his /her own inventions unless employment contract says otherwise but if the employee has been hired to invent, and the invention is within the scope of employee duties, the employer owns the invention and the patent rights. an employer should have a clear written contract with employee describe the scope of duties, states that inventions belong to employer, creates obligation to transfer all rights / IP and make patent, application at employer’s expenses, creates an obligation of confidentiality / non- disclosure.
The best approach for employees and independent contract it must have a well-written contract cover moral right waiver make sure that all patentable inventions, works of authorship (including software) and trademarks pertaining to the scope of work belong to the employer. Get a covenant to assign, on request, all patentable inventions, work of authorship (including software) and trademark within the scope of work get a confidentiality / non-disclosure covenant ensure that all material/media belong to employer stipulate right to get an injunction. Also, have good IP practices inside the company have (and enforce) good IP police keep records of who created what IP make sure inventors keep good notes and records of the provenance of all IP.
INSOLVENCY
SOFTWARE AS A SERVICE (SaaS)
–
Most SaaS services are taken it or leave it usually not possible to negotiate SLAs usually not possible to get reasonable limitation of liability. Services based on making available the functionality of the software without actually having the software in a local computer system.
by---
Astha Garg, a 4th-year law student at Galgotia University, she is currently pursuing B.B.A LL.B.
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REFERENCES:
[1] Goel & Anor v Grant & Anor (As Joint Administrators of Meem SL Ltd) [2017] EWHC 2688 [1]
[3] Indemnities in IT contracts, Alasdair Taylor on Fri, 20/04/2012, https://seqlegal.com/blog/indemnities-it-contracts.
[4] The Information Technology (Use of Electronic Records and Digital Signatures) Rules, 2004
[5] Purohit, TD, „Contracts Via E-mail -A Note of Caution‟, Corporate Law Cases, Vol. 9, Part-11, 2008 (November), pp 488-489
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