In todays 21st century, the world is mostly dependent on technology/ internet sector, the person has a wide purpose to use the internet like for education, booking, entertainment, shopping, etc, technology has a great impact on society.
Now even the contracts are made online for business purposes or any other purposes, for online contracts some legal issues arise for the formation of a contract, section4 of the Indian Contract Act, 1872 prevents these legal issues.
Section4 of the Indian Contract Act, 1872 states that there must be a communication between both the parties, i.e., Offeror and offeree for the formation of a contract, the communication of acceptance is completed when it comes to the knowledge of an offeree and offeree accepted the offer and sends back the document to offeror for completion of the contract.
In this situation there is an exception of a communication process rule i.e. Postal Rule, according to doctrine, acceptance is said to take place as soon as the offeree posts his acceptance to the offeror.
Now various types of technological processes used for the formation of a contract, are Telex, Fax, Internet, in these forms of instantaneous communication postal rule was not applicable, as they are the form of communication . But in Section 13 of the Information Technology Act, 2000 there is a provision which states that the time of receiving receipt is when the information sent to the resource which is not designated would be the one when it is retrieved by the addressee.
In todays scenario, more and more contracts are being formed on a remotely-based system between the offeror and offeree with the help of the technology sector. A contract is formed when the offeree accepted the offer with a lawful object which is defined in Section 10 of the Indian Contract Act, 1872.
The General Principle of Forming Contract is that communication of acceptance is completed with regards to the offer to the offeror. But this rule is not applicable in all ways of communication, in case of communication by way of post; the acceptance is completed as soon as the offeree posts the same, i.e. the Postal Rule which is an exception to the general rule. With the advent of technology, people start using electronic Internet Communication for the formation of contracts as they are more convenient, speedier than other forms of communication. Being an instantaneous form of communication receipt rule envisaged in Section 13 of the Indian Contract Act, 2000.
Anson defined Contract: A contract consists of an actionable promise or promises. Every such promise involves parties, a promisor & promisee and an expression of intention and of expectation as to act or forbearance promised .
Under the Indian Contract Act, 1872, Sec. 2(h) defines: An agreement enforceable by law is a contract. A contract is an agreement between two or more parties creating rights and duties and which is enforceable by law.
Parties of a Contract are:
Promisor: A person who makes a promise.
Promisee: A person to whom a promise is made.
Offeror: A person who makes an offer to another.
Offeree: A person whom an offer to enter into a contract has been made.
Keywords of the Indian Contract Act:
- Agreement: Sec. (e)
- Promise: Sec. 2(b)
- Proposal/ offer: Sec. 2(a)
There are 8 essentials of contract which are needed to be performed for lawful object:
- Lawful Consideration
- Interest to create Legal Relation
- Competency of Parties
- Free Consent
- Lawful Object
The Doctrine of Postal Rule
According to the Indian Contract Act, 1872, Sec. 4(9) deals with the time of formation of the contract. Postal Rule of the contract states that as soon as the offeree posts the letter of acceptance, the offeror is bound for that contract until or unless the letter of acceptance is arrived at him, whereas, the offeree is bound when the letter of acceptance is coming to the knowledge of the offeror.
In this situation, if the offeree wants to revoke its acceptance, he/she can use a faster mode of communication for cancellation of the contract. In this kind of instantaneous mode of contract, parties are aware of the final decision of the contract, hence they do not face any problematic issue such as delay or failure of transmission.
Electronic Contract or E-Contract
With the emergence of technology in all over the world, people are widely using the internet for many purposes, now the communication can be done between the persons is possible with the help of internet which saves our time also consider as faster mode of communication, or effective communication, with the changes of time, the contracts are now formed online. These contracts are known as E-Contracts.
E-contracts are contracts in which the acceptance, communication, revocation, of a valid contract are expressed through an electronic form with the help of the Internet or Cyber Space, these E-Contracts are similar to Hard Copy Paper Contract, all 8 essentials of valid contracts are applicable also on E-Contract.
present study addressed the issue of applying the postal acceptance rule to email acceptances. It seems that the justifications for applying the postal rule in the age of post may be valid to be analogized to a new method of communication, such as email. Email cannot be considered as an instantaneous method of communication, since there are some delays and gaps between sending and receiving messages because of network issues. Parties do not communicate instantaneously with one other. In contrast, there is much greater clarity regarding the application of the general rule to website acceptances.
 Case: BhagvanDas vs. Girdhari Lal &co.: It was held that the telephonic conversation for acceptance of the contract is valid and also an instantaneous form of communication.
 AVTAR SINGH, Contract and Specific Relief (12th ed. 2020): Section 10 of Indian Contract Act, 1872 states that all agreements are contract if they are made with the free consent of parties competent to contract with a lawful object and for lawful consideration.
 AVTAR SINGH, Contract and Specific Relief (12th ed. 2020): Section 13 of the Indian Contract Act states that two or more persons are said to consent when they agree upon the same thing in the same sense.
 Law Essay: Different Persons Definition of Contract: lawteacher.net: 4th January 2019
 AVTAR SINGH, Contract and Specific Relief (12th ed. 2020)
 AVTAR SINGH, Contract and Specific Relief (12th ed. 2020): Every promise and every set of promises, forming consideration for each other known as agreement.
 AVTAR SINGH, Contract and Specific Relief (12th ed. 2020): When the person to whom the proposal is made signifies his assent thereto, the proposal is made to be accepted. A proposal when accepted becomes a promise.
 AVTAR SINGH, Contract and Specific Relief (12th ed. 2020): A plan or a suggestion, especially a formal or written one, put forward for consideration by others.
 AVTAR SINGH, Contract and Specific Relief (12th ed. 2020)
 AVTAR SINGH, Contract and Specific Relief (12th ed. 2020): It states that the contract would be formed as and when the acceptance of the offer comes to the knowledge to the offeror.
 Vol.2 Issue1, Postal Rule in Digital Age: Journal of International Commercial Law and Technology (2007)
Ritik AgrawalInstitute of Law, Jiwaji University