In today’s time, website usage has increased due to fast and quick access to the information, knowledge, product, etc. Such flexible and approachable way of working has attracted ample of customers and websites have become an effective source of communication, which in turn have introduced non-traditional methods of contracting. Such e – contracts are termed as wrap contracts and are generally preferred in online transaction as it increases speed, suitability and efficiency for engaging the third parties in a contractual relationship.
Wrap contracts are the non-traditional adhesive contracting forms that are not physically signed by the adherent. Courts have categorized such contracts into “clickwraps,” “browsewraps” and “shrinkwraps.” The details, validity and provisions relating to stamping of above mentioned contracts have been mentioned in our previous blog on E – contracts. We reiterate that there are no concrete judicial precedents on the validity and the necessity of wrap contracts.
Glimpse of the Brett Long v. Provide Commerce, Inc. case
Provide Commerce, Inc. (“Respondent”) operates a floral arrangement website, ProFlowers.com, where Brett Long (“Plaintiff”) purchased a flower arrangement that was shown as pre flower arrangement on the website of the Respondent. On the delivery of such flower arrangement, Plaintiff contended that it was do it yourself project, which was contrary to the specifications displayed on the Respondent’s website. Plaintiff filed a lawsuit in the trial court of California against the Respondent. Respondent petitioned to compel the process of arbitration on the basis of an arbitration clause mentioned in the company’s browsewrap agreement on the ProFlowers.com website instead of litigation as initiated by the Plaintiff.
Indian Contract Act, 1872 (“Act”):
Indian law has not developed with regards to e-contracts but in the context of recent changes and the legislation leading towards governing unfair terms in contracts, Indian courts are considering the contracts from the view of the weaker party. E – contracts are usually the standard form of contracts i.e. contract on “take it or leave it” basis or contract that cannot be negotiated. In such type of contracts, the other party has no choice but to adhere to the contract without negotiating its terms. See our previous blog on this subject which provides the Indian legal scenario surrounding all e-contracts.
Further, Supreme Court in Central Inland Water Transport Corporation Limited vs. Brojo Nath Ganguly held that an unfair or an unreasonable contract entered between the parties of unequal bargaining power was void under section 23 of the Act. Courts have become conscious and in most cases discharge the weaker party pursuant to the contract which is unfair and unilateral.
Additionally, law commission in its 103rd report dated 31st August, 2006, analyzed in detail about the consequences of the unfair terms in the contract and proposed to insert a separate set of general provisions to deal with unfair terms of contracts. Considering the growing demand of e – contracts, the legislators and the judiciary have shown immense interest to stabilizing the situation and are trying to curtail the growth of one-sided contracts having unequal bargaining power. This in turn shall protect the weaker party from being exploited and being forced to adhere to a coercive contract.
Econtracts are the order of the day. What we need to do is to draft it’s terms in such a manner that it is balanced as these contracts are not viewed by courts with the same perspective as of a paper contract. It will be improper to label them one sided or harsh before adverting to their contents. It also cannot be presumed that the customer had no choice. He has choice not to opt to enter into in case the product is not an essential service or commodity. In the summary we must strive to make the contracts more balanced considering the different perspective it will be looked upon.