Section 10A IT Act: Validity of contracts formed through electronic means

Information Technology Act, 2000

Section 10A IT Act at a Glance

Section 10A IT Act protects the validity of contracts formed through electronic means. When proposals, acceptances, or revocations are communicated in electronic form or through electronic records, the contract is not unenforceable solely because electronic means were used.

Section 10A IT Act Bare Act Text

10A. Validity of contracts formed through electronic means.
Where in a contract formation, the communication of proposals, the acceptance of proposals, the revocation of proposals and acceptances, as the case may be, are expressed in electronic form or by means of an electronic records, such contract shall not be deemed to be unenforceable solely on the ground that such electronic form or means was used for that purpose.

Amendments to this section

Ins. by s. 9, ibid. (w.e.f. 27-10-2009).

Section 10A IT Act in Simple Words

Section 10A IT Act protects contracts formed through electronic means from being rejected merely because the parties communicated electronically. It covers each stage of forming a contract: communicating proposals (offers), communicating the acceptance of proposals, and communicating the revocation (withdrawal) of proposals and acceptances, as the case may be.

Where any of those steps in forming a contract is expressed in electronic form or through an electronic record (a term defined in Section 2 IT Act), the contract is not deemed (treated in law) to be unenforceable (unable to be enforced in law) solely on the ground that electronic form or electronic means was used for that purpose. The word "solely" limits the rule: Section 10A IT Act removes the objection that electronic form or electronic records were used to form the contract, and goes no further.

While Section 10A IT Act addresses whether electronic communication makes a contract unenforceable, Section 11 IT Act addresses when an electronic record is attributed to its originator. Section 10A IT Act was inserted by section 9 of Act 10 of 2009 with effect from 27 October 2009.

When Section 10A IT Act Applies

Parties are forming a contract involving the communication of proposals, the acceptance of proposals, or the revocation of proposals and acceptances.
Those communications are expressed in electronic form or through an electronic record.
The contract is not deemed unenforceable solely on the ground that electronic form or electronic means was used for that purpose.

Example of Section 10A IT Act

Cyril, a textile supplier in Jaipur, sends an electronic record proposing to sell cotton yarn for ₹2 lakh to Lavanya, a garment maker in Jaipur. Lavanya replies through an electronic record accepting Cyril's proposal. Before delivery, yarn prices rise and Cyril refuses to supply the yarn, claiming that the contract cannot be enforced because both the proposal and the acceptance were sent only as electronic records. Under Section 10A IT Act, the contract between Cyril and Lavanya is not unenforceable solely on the ground that electronic form or electronic records were used to communicate the proposal and acceptance.

When Section 10A IT Act Does Not Apply

Disputes where a contract is claimed to be unenforceable on a ground other than the mere fact that electronic form or electronic records were used to communicate proposals, acceptances, or revocations.

FAQs on Section 10A IT Act

What is Section 10A IT Act?▼

Section 10A IT Act states that where proposals, acceptances, or revocations of proposals and acceptances in forming a contract are expressed in electronic form or through an electronic record, the contract is not treated as unenforceable solely on that ground. It prevents a contract from failing merely because electronic means were used to form it.

Is a contract unenforceable merely because the offer and acceptance were sent as electronic records?▼

No. Under Section 10A IT Act, a contract is not deemed unenforceable solely on the ground that electronic form or an electronic record was used to communicate the proposal or its acceptance.

Does Section 10A IT Act cover the revocation of a proposal or acceptance sent electronically?▼

Yes. Section 10A IT Act expressly covers the communication of proposals, the acceptance of proposals, and the revocation of proposals and acceptances expressed in electronic form or through an electronic record.

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Disclaimer: This is for informational purposes only. Always consult a qualified advocate for legal advice.

Sources: Bare Act Text, Information Technology Act, 2000 ·