HIMACHAL PRADESH NATIONAL LAW UNIVERSITY

Name: Chakshu Purohit

“It’s always about timing. If it’s too soon, no one understands. If it’s too late, everyone’s
forgotten” says Anna Wintour which means that issues that need to be addressed, the laws,
implementations and justice that needs to be delivered today, if delayed destroys the purpose of
delivering that decision and for which we call ourselves rational beings or strive to become one
unless firm and stern mechanisms are not set against those who delude from this ultimate goal of
being just and rational. Hence, the prevailing law of the land must have widening scopes to cover
under its ambit all that is new and has never been persecuted upon on the courts of law.
One such change came in the commercial sector of India when E-Commerce brought a
leading change in the lifestyle and shopping habits of Indian consumers with the entry of online
retailer Amazon and online auctioneer e Bay. The scenario further changed with the use of social
networking sites which brought a remarkable flow of online purchases after the year 2006. To
see what e-commerce is Anita Rosen from an American management association in her book on
e-commerce explains e-commerce as a practice of purchasing and selling products and services
over the internet or other electronic system also World Trade Organization on September 25th
1998 had adopted a broad view of electronic commerce as ‘the production, distribution,
marketing, sale or delivery of goods and services by electronic means - (By Mitchel Andrew. D)
The new breakthrough in the traditional way of business has completely changed the
traditional business of trading patterns and buying patterns. Broadband and growing use of
mobile devices is another reason facilitating the general public at large to opt for online
shopping. The presence of e –retailer such as Amazon, Flipkart, Myntra, is another important
factor influencing e-commerce activities and when a new spectrum is added to the lives of
individuals in the whole society, what follow is the crimes and wrong doings that indispensably
come with it. With the increasing number of online purchases and sales and with that increase in
number of unfair practices practised upon the purchaser, the need was to put these under certain
existing laws as no new law was being implemented for it. The next will be a study that throws
light upon - transactions done online are currently governed under which law in the Indian legal
framework. For example, purchasing a book under Amazon will be governed under which law?
Firstly, regarding transactions on net and its recognition, Information Technology Act, 2000
has done a big deal in giving recognition to online purchases. Reserve Bank of India by issuing
various circulars regarding online banking and money transfer activities have made consumers
capable of securing the online space.1
Transactions in product and services bring with forth certain rights and liabilities to be
imposed on both the parties. Indian legislature has not enacted any separate statute for the
product and services provided online instead, all such e-transactions are governed by the

1
Dr. Prem Lata, Consumer Awakening, E-Commerce and Consumer Law (June 7, 2016),
[Link]
consumer protection laws and principles of justice equity and good conscience. Also, cases of
negligence in service can be claimed under Tort Law, with reference to principle of strict liability
laid down by House of Lords in landmark case Donoghue vs. Stevenson2 and also by a number of
statutes such as Sales of goods act 1930, Indian Contract Act 1872, but in case of any grievance,
cognizance is taken under the Consumer Protection act 1986 on the basis of complaint made by
the consumer.
If the Sales of goods act 1930 and Indian Contact Act 1986 are interpreted in adherence to the
e-market, then it becomes clear that these statues can perfectly regulate online market as well.
Like Sales of Goods Act, lays down the conditions of how sales shall be made which also
replicate manner in which the goods are sold online. The crux difference of practical market and
e-market is that: In case of e-commerce, goods are sold on the basis of their description and
claim is made when there is any short in meeting that description given by the buyer, while in
case of physical market buyers can try the product before they buy it.
Online market describes the goods to the buyer before the buyer places an order and if buyer
likes the specifications of the goods so described, they order the goods it to be delivered to the
address so given by the buyer as when a buyer orders a book from Amazon. Such a sale will be a
sale by description under The Sales of Goods Act Section 15 which says that- where there is a
contract for sale of goods by description, there is an implied condition that the goods shall
correspond with the description.3
Once product is ordered, a contact is formed between the buyer and seller and such a
contract is called an e-contract. Electronic contracts are governed by the basic principles
provided in the Indian Contract Act, 1872 (“ICA”), Section 10A of the Information Technology
Act, 2000 (“IT Act”) provides validity to e-contracts. The Supreme Court in Trimex
International FZE Ltd. Dubai v. Vedanta Aluminum Ltd. 4 has held that another way of e-mails
exchanges between parties regarding mutual obligations constitute a contract.
If seller fails to deliver the product as per the contact, that amounts to deficiency in service.
To tackle the problem arising on the situation discussed above, court took stand and ruled that “If
somebody does not perform his part of the contract, it amount to deficiency in service.”5
Now, that particular book from Amazon might also contain with it some complimentary
benefits or services like free online trail, a CD attached at the back of the book, any free online
access to an online database etc. The next field of study will throw light upon that these
complimentary benefits come under the purview of which law, will these come under seller's
obligation. Also what is the remedy available with the buyer if the book bought from Amazon or
the complimentary benefits like a CD attached to it does not go with the description as stated by
the seller or does not work, what is the remedy available to the buyer.

2
Donoghue v Stevenson, [1932] AII ER Rep 1; [1932] AC 562; House of Lords
3
Pollock and Mulla, The Sale of Goods Act, Tenth Edition (2017), LexisNexis, Chapter 2, Sec. 15, pg 34
4
Trimex International Fze , Dubai v. Vedanta Aluminum Ltd (2010) 3 SCC 1
5
Smt. Ramala Roy v. Rabindra Nath Sen, 1994 (I) CPR 66
 This part is covered under The Sales of Goods Act, 1930 Section 12. This section revolves
around two things- condition and warranty. A stipulation in a contract of sale with reference to
goods which are the subject thereof may be a condition or a warranty. Initially the distinction
between the two terms was ambiguous and it was very difficult for the then law makers to
categorize a stipulation as anyone of them but The Sales of Goods Act clearly defines the
distinction between the two.
As given under the act, a condition is a stipulation essential to the main purpose of the contract
the breach of which gives rise to a right to treat the contract as repudiated. 6 As defined under
section 12 sub-s (2) - the parties, if they wish, may put the contents of any particular statement or
promise which passes between them on the same footing as the description of the thing
contracted for, so that if it is not made good by the party undertaking it, the failure is deemed to
be total failure of performance and the other is at least wholly discharged and may in addition
recover damages for such failure of performance.
A warranty is a stipulation collateral to the main purpose of the contract, the breach of which
gives rise to a claim for damages but not to a right to reject the goods and treat the contract as
repudiated.7 There may also be, and there occur in common practice, auxiliary promises or
undertakings of which the breach is not intended to avoid the contract, but to give a remedy in
damages. These are warranties in the proper sense, as defined in sub-s (3) of section 12.
An affirmation made as regards the goods to have a contractual effect must be part of the
contract and if it is not a part than it is mere representation and if there is no fraud in saying it,
untruth of it will not give rise to an action for damages, though it may enable the other party to
rescind the contract. However, if the representation forms the crux of the contract, then it
subsequent entry into the contract is not needed to fix liability of damages or the injured party
might repudiate the contract depending on whether it is treated as a condition or warranty.
So, it can be said now that complimentary benefits or services like as in the example
mentioned above- the collateral benefits promised with the book bought from Amazon, the CD,
and online free trail etc. come under the ambit of being a warranty and the main stipulation that
is the book itself comes under the ambit of being a condition. All these benefits come under the
obligations of the seller and if any of these benefits did not work or was not in adherence to the
description provided at the time of contract, the buyer has certain specified remedies as under-
• In case of defect in the book itself like destroyed cover or pages, quality etc. the buyer has the
right to treat the contract as repudiated and even get damages for the same.
• In case if the warranties as provided in the contract do not work, the buyer cannot rescind the
contract. His only remedies would be those provided under s 59 of The Sale of Goods Act that is
to set up against the seller the breach of warranty in diminution or extinction of the price or to

6
Pollock and Mulla, The Sale of Goods Act, Tenth Ed (2017), LexisNexis, Ch 2, Section 12 (2), pg 133
7
Pollock and Mulla, The Sale of Goods Act, Tenth Ed (2017), LexisNexis, Ch 2, Section 12 (2), pg 133

7
sue the seller for the breach of the terms of warranty. The four remedies as written under the
same are-
1. He may claim a deduction from the price if the loss occasioned by the breach of warranty is
less than the price. ''The rule of a reduction or extinction of the price is not a set off but it applies
only to cross claims under the same contract''. 2. He may refuse to pay the price altogether, if the
loss equals the price. 3. If the loss exceeds the price, he may not only refuse but also claim the
excess. 4. He may pay the price in all the these cases, and sue the seller for damages for the
breach of warranty. Buyer may either sue for his claim a set-off or may file a counter claim.8

Consumer Protection Act 1986- Additional Rights

To conclude, the legal framework of India is suffice in bringing the threads of online transactions
under boxes of different laws and provide with certain specific remedies as per the injury or loss
suffered yet online transactions and selling and purchasing through online sources is growing at
such a higher pace that the resulting malpractices in it keep on increasing. This sector sharing
stakes with privacy issues and proper delivery mechanisms needs to be governed with even
stricter laws formed by the legislature, implementation being checked by the judiciary and ensure
that this facility of online purchasing might not turn out to be a wrong choice for the buyers and
sellers of the Indian territory and ensure that the way of the country may end towards being
called an advanced, developed and safe country where proper remedies are available for every
legal wrong that deludes the above mentioned goal of the nation.

8
Sir Dinshah Fardunji Mulla, The Sale of Goods Act and The Indian Partnership Act, Tenth Ed (2012), LexisNexis, Ch
VI, Section 59 (2), pg 131