E-commerce under IT Act 2001

In the WTO Work Programme on Electronic Commerce, Electronic Commerce means the production, distribution, marketing, sale or delivery of goods and services by electronic means and are, therefore, covered by the concept of ‘electronic commerce’. Broadly defined, electronic commerce encompasses all kinds of commercial transactions that are concluded over an electronic medium or network, essentially, the Internet and E-commerce covers three main types of transactions, i.e. business-to-consumer (B2C), business-to-business (B2B), and business-to-government (B2G) and hence E-commerce can be used as a synonym with the e-contracts.

Legal framework for ecommerce has been provided by the Information Technology Act, 2001, which makes India only the twelfth country in the world which has such a comprehensive legislation for ecommerce. This Act also effects consequential amendments in the Indian Penal Code, the Indian Evidence Act, 1872, and the RBI Act, 1934 to bring them in line with the requirements of digital transactions. (Similar amendments are being planned for the Companies Act, 1956 to also facilitate e-commerce and e-governance.)

The IT Act essentially seeks to address three areas or perceived requirements for the digital era: 
(a) to make possible e-commerce transactions—both business to business and business to consumer 
(b) to make possible e-governance transactions—both government to citizen and citizen to government 
(c) to curb cyber crime and regulate the Internet.

Most of the provisions of the Information Technology Act as promulgated, deals with citizen interaction with government and certainly a proper and far-reaching mission towards e-governance. But there are several hurdles before this becomes a reality. The main being that government departments not only lack the hardware for electronic transactions but will also need to reorient their systems and procedures before they are ready to interact through electronic documents.

E-governance implies action and commitment of the state and its agencies at two levels:
(a) It involves the promotion of the information and communication technologies and, especially, e-commerce, on the one hand, and

(b) The adopting of these technologies and all they involve in the matter of a completely new type of commitment, open systems and use of the medium of the Internet for government business, citizen interaction, and most important, for development.

But when it comes to laying down of specific rules with respect to the basic essential ingredients of a contract in the sphere of econtracts the laws are not extensive enough to include each and every aspects of a valid contract.