In this article, Shruti Sharma currently enrolled in the Certificate Course in Technology Contracts at LawSikho talks about Terms and Conditions in Technology Contracts

Introduction

With the advent of technology, e-commerce businesses have flourished to a remarkable extent across the globe. We as a customer are dependable on the various transactions which happen through technology whether it is related to the purchasing of products/goods or money transactions etc. You may come across with various online websites dealing with the different services and products such as Amazon, Flipkart, Snapdeal, Paytm etc to name a few.

Going back in an era where there were no technology related transactions, the customers used to get the “written receipt” or “bill” with printed “Terms and Conditions” which were not so exhaustive and complex and also readable to the customers. Moreover, this kind of transaction didn’t carry any privacy issues as well.

However, with the changing scenario, a new concept was introduced in the business world named as a “Technology Contracts” which doesn’t require paper form and the parties to be present at the same time. The Technology contracts consist of certain standard terms and conditions which the user has to agree to proceed further in the process or to complete the transaction. The user has no option but to agree to the terms and conditions being displayed by the e-commerce companies, in case the user will not click on the “I Agree” button they will not be allowed to use the online platform for the requisite purpose and ultimately they have to agree with their unreasonable conditions as well.

Types and Usage of Technology Contracts

In the current market scenario, there are various technology contracts which we deal with such as “Software License Agreement, SaaS/Cloud Agreements, outsourcing contracts etc.

However, there are various terms and conditions posted on the website while going through the same such as “Privacy Policy” and “Terms and Conditions” or “Terms of Usage”. Moreover, usually these both policies are interrelated and one can easily find out the link while going through the respective policies.

E-commerce and E-contracts

Nevertheless, it is to mention herein that our e-contracts have been provided with the legal validity after the enactment of the Information and Technology Act, 2000 which has not only provided the e-contracts their legal position whereas it has also incorporated certain obligations and duties which the intermediaries i.e. e-commerce business has to follow and in case of failure, the penalties have also been provided to shape it in a more stringent and concrete manner.

The important aspect which has been included in the IT Act 2000 is regarding the Intermediary liabilities of e-commerce companies towards the user as “Information Technology (Intermediaries Guidelines) Rules, 2011. As per the rules, the e-commerce companies have to prepare and display the “Privacy Policy” and the “Terms and Conditions” on their website.

Standard Terms and Conditions

There are certain terms and conditions being tagged in by various e-commerce companies such as how you need to use the website or the terms by which a user is governed while dealing or having transactions through online. These standard terms of use and rules and regulations are published on the website in accordance with the IT (Intermediaries Guidelines) Rules, 2011 in Rule 3(1) to have an access of the e-commerce business website.
The following are standard terms of use one can easily find while accessing any e-commerce website:

(a) Eligibility/Competent to Contract

Similar to Indian Contract Act, 1872 the person who is below 18 years are incompetent to contract or is not eligible to use the website. The underlying principle is same as e-contracts are also the legal binding contracts. Therefore, the website usually makes it clear that one should be 18 years or above to use the website or if not should use the website or do the transaction through his/her guardian or parents. Moreover, the website owner has a right to terminate the contract in case it is brought to their notice that the user is not competent to contract.

(b) Use of Website

The user is bound to follow the major binding rules while using the website.
Few binding rules are :
(i) User shall not use information in any manner whatsoever which doesn’t belong to him/her.
(ii) User shall not share, display, upload etc any information which is defamatory, obscene or which encourages any unlawful activities in any form whatsoever or which is against the integrity and sanctity of our country.
(iii) The user shall not violate or infringes the intellectual property rights or privacy rights of anyone as the personal information is also being shared here.
(iv) The information should not contain anything libellous or image, video of any minor or an adult.
(v) No information shall be shared which is inappropriate in any form and violates the rights of others.
(vi)  No hacking in any form shall be entertained etc.

(c) Privacy

The Privacy Policy usually they include in the terms of usage so that the user shall be aware of privacy obligations they adhere to.

Importance Of Reading Terms And Conditions

The users usually don’t bother to read the terms of use provided in the website and just click on the button “I Agree”.

It is a general human psychology to read the terms carefully when someone provides you with certain clauses on e-stamp or legal paper where you consider yourself legally binding in case any breach occurs from your side but in case of e-contracts the situation is completely opposite and users don’t understand the importance of reading the terms of usage provided on the website which can prove to be problematic for them as similar to the legal paper.

Access to the Services

Few website doesn’t give any guarantee that you would have an access to the services without any interruption. Moreover, without prior informing the user, the website may be occasionally suspended or restricted to be used.

Amendments/change in terms of usage

It would be strange for the users to know that the e-commerce companies take control of all the amendments and changes in the terms of usage without any prior notification to the users. Therefore, in layman terms, the terms and conditions which a user is agreeing to could be changed at the sweet will of the e-commerce companies and make you legally binding for the terms which you have never agreed to and which has been applied to you without even intimating you.

Disclaimer

The e-commerce companies don’t take any liability for transactions being done on their website and claim no warranty regarding any services being supplied by them.

Indemnity

Without being aware the users bind themselves with the indemnification clause where the user has to indemnify the e-commerce company and hold them harmless in case of any breach by the user. Therefore, it is really important to thoroughly review the terms of usage because the breach of any terms and conditions may lead you to indemnify (make good of the loss) to the e-commerce company. Moreover, in certain clauses, they also incorporate saying that you release or waive them from all the liabilities, claims etc in regard to any transaction being done on or through the website.

Other Terms, Policies and Guidelines

The users should be aware of the fact while using the website and crawling through the terms of usage, they are getting themselves bound by the other terms, rules, policies and guidelines of the website for which they provide link itself and sometimes they might not. Therefore, the terms of usage are always subject to the other terms and policies as well and they are termed as a part and parcel for the usage terms user is agreeing to.

Communications

Through the use of some websites a user agrees and provides consent to the website to send you e-mails or communications timely as and when required. Therefore, your agreeing to the terms of usage provides them with your consent to receive the same and intrude your privacy.

Payment terms

Some website clearly mentions that in case they don’t receive the payment through the credit card or such other payment modes, then the user agrees to pay all the due and outstanding payment which the e-commerce company demands. Moreover, you never know if they also add any penalty clause which would be unreasonable for the user to pay for a minor default.

Conclusion

The Technology Contracts or the e-contracts are nothing but the legally valid and binding contracts which a user agrees to them in multiple ways while having a transaction on umpteen numbers of websites. Since, e-contracts are electronic contracts hence; they don’t require any physical signatures and the user’s click on “I Agree” button itself would suffice to make it a complete legal valid contract. Moreover, since the user activities will be governed by the terms and conditions provided by the website; so they should be aware about the same and the legal implications associated with it.