Know the e-contracts you're executing

Each of my contract drafting workshops invariably starts with my question – have you ever executed a contract? Most of the students, even professionals aren’t even aware of the contracts one signs almost every day, knowingly or unknowingly (more of it in some other article).

Typically, a contract becomes accepted, executed and resultantly, binding on the parties only when all parties to the contract execute it with their signatures on the agreement. In other words, contracts without signatures of all the parties cannot be considered as executed - contract with one signature of one party or only some parties is treated as partially executed and contracts only when signed by all parties will be considered as fully executed.

Unexecuted and / or ?partially executed contracts are not binding on the parties and only fully signed and executed contracts will be binding on the parties.

However, nowadays, new methods have emerged (i.e., without signatures of the parties) of accepting terms and conditions of a contract – such contracts will be generally considered as electronic contracts. ?

Following are some different types of electronic contracts:

Clickwrap contracts

These contracts are a set of terms and conditions of use applicable to users who intends to access and use software. Typically, users are required to accept such terms and conditions by just clicking accept button integrated in software installation and use process. Acceptance of such click through terms and conditions is mandatory for a user to purchase and use software – Non-acceptance of such terms and conditions will not permit such user to access and use the software or similar product and therefore, the contract is not consummated.

Browse Wrap Contracts

These contracts are applicable to users of websites, whereunder the website seeks the user to accept the terms and conditions of website use in order to enable the user to access the website. When any user enters into interface of a website, it displays a popup reflecting the terms and conditions of use asking the user to accept such terms. Here again, only after acceptance of such terms and conditions, the user can browse and use the website - such terms and conditions will be considered as browse wrap contracts.?It is mandatory for websites (which intends to subject its users to browse wrap agreements) to display full content of such terms and conditions so that user can read and accept such terms and conditions to transform them into a contract.

Shrink Wrap contracts

With phenomenal growth and success of e-commerce companies, it has become commonplace for consumers to purchase different electronic or software products online. Typically, online purchased products are shipped to the address of the consumers. Some products shipped to consumers will have specific set of terms and conditions which will be called as a legal document with the name Shrink Wrap agreement that comes with the product. Such products are packaged and sealed in shrink wrap to ensure only consumers will see the products along with the legal documents (i.e shrink wrap document). The Shrink wrap agreement will contain specific terms and conditions about the product or purchase. Guidelines for use of products, pricing terms and conditions, warranties and representations etc., will form part of shrink wrap agreement.

Electronic or otherwise, there is no scope for ignorance on part of the parties. It is therefore, advisable for users to read terms and conditions of any click wrap agreement, browse wrap agreement, shrink wrap agreement etc., carefully to be aware of their rights and obligations and other conditions of use.

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