Minors and Online Contracts - Understanding Clickwrap, Shrink-Wrap, and Browse-Wrap Contracts.
India is currently experiencing a digital revolution, marked by a significant increase in internet users,
surpassing 50% of the population. As the adoption of e-contracts rises simultaneously with this surge,
legal complexities emerge, particularly concerning minors engaging in such agreements. Verifying the
age and identity of parties involved in these contracts poses notable challenges, necessitating a closer
examination of the legal landscape surrounding minors in the realm of e-contracts.
Understanding Electronic Contracts
An electronic contract is essentially a digital counterpart of a traditional contract. However, it must meet
the legal requirements to be considered a valid contract. Various types of electronic contracts exist,
each with their own characteristics and legal implications.
1.Shrink-Wrap Contracts: A "shrink wrap contract" is a type of agreement often associated with software. It involves packaging terms and conditions with the software, typically in shrink- wrapped packaging. Users accept these terms by opening the package or using the software, implying their agreement. One of the features of a shrink wrap agreement is that a consumer or customer cannot read its terms of agreement until the package has been accepted and paid for.
2.Clickwrap Contracts: Clickwrap contracts involve users confirming their acceptance by clicking a button or checking a box, often presented alongside lengthy terms and conditions. Unlike shrink-wrap contracts, clickwrap agreements are less negotiable, creating a scenario where the user must either accept the terms or forego access to the service.
3.Browse-Wrap Contracts: Commonly encountered on websites, browse-wrap contracts are agreements users implicitly agree to by continuing to use a service or explore a webpage. The terms are typically accessible through a hyperlink.
1.Shrink-Wrap Contracts: A "shrink wrap contract" is a type of agreement often associated with software. It involves packaging terms and conditions with the software, typically in shrink- wrapped packaging. Users accept these terms by opening the package or using the software, implying their agreement. One of the features of a shrink wrap agreement is that a consumer or customer cannot read its terms of agreement until the package has been accepted and paid for.
2.Clickwrap Contracts: Clickwrap contracts involve users confirming their acceptance by clicking a button or checking a box, often presented alongside lengthy terms and conditions. Unlike shrink-wrap contracts, clickwrap agreements are less negotiable, creating a scenario where the user must either accept the terms or forego access to the service.
3.Browse-Wrap Contracts: Commonly encountered on websites, browse-wrap contracts are agreements users implicitly agree to by continuing to use a service or explore a webpage. The terms are typically accessible through a hyperlink.
Legal Framework for Minors in Contracts
In understanding how the law deals with minors in contracts, let's break down the key elements of the
legal framework, especially in the context of the digital age.
Section 11: Minors and Contracts
Section 11 of the Indian Contract Act, which straightforwardly states that minors, due to their age, lack
the legal capacity to enter contracts. This recognition stems from the understanding that young
individuals may not fully grasp the complexities of legal commitments.
Void Contracts: Mohiri Bibee v. Dharmodas Ghose
When it comes to contracts involving minors, the Privy Council, in the case of Mohiri Bibee v.
Dharmodas Ghose, clarified that these contracts are considered void. This means they are treated as if
they never existed. Sections 64 and 65 of the Contract Act, dealing with void contracts, don't apply to
minors because the law acknowledges their limited capacity.
Remedies for Minors in E-Contracts
The legal consequences for minors in online contracts can be a bit tricky to understand. In the past, the
way to solve these issues usually involved a legal principle called "restitution." Instead of just making
sure the contract is enforced, restitution aims to return any gains or benefits the minor got from the
contract.
Khan Gul v. Lakha Singh
In the landmark case of Khan Gul v. Lakha Singh, the Lahore High Court took a principled stance by
asserting that the restoration of unjust benefits should not be contingent on whether an individual is
positioned as a plaintiff or defendant. The court highlighted that making a minor give back something
they got unfairly, like money or property, isn't the same as forcing them to follow the agreement.
Instead, it's about getting things back to how they were before the contract was made, which is called
"status quo ante
This position adopted by the Lahore High Court aligns with the recommendations of the Law Commission of India. Notably, the principle of compensation is enshrined in Section 33 of the Specific Relief Act, 1963. According to this provision, a minor is obligated to return any undue benefit gained from the contract, regardless of their standing in the legal proceedings. Therefore, in accordance with Section 33, both parties involved must return their respective benefits to revert to the pre-contractual status.
This position adopted by the Lahore High Court aligns with the recommendations of the Law Commission of India. Notably, the principle of compensation is enshrined in Section 33 of the Specific Relief Act, 1963. According to this provision, a minor is obligated to return any undue benefit gained from the contract, regardless of their standing in the legal proceedings. Therefore, in accordance with Section 33, both parties involved must return their respective benefits to revert to the pre-contractual status.
Challenges and Suggestions
The importance of addressing the challenge posed by minors entering e-contracts, particularly click-
wraps, cannot be overstated. Implementing effective age verification mechanisms and restrictions
emerges as a crucial strategy. A comprehensive approach involves the creation of an online system
where users provide their date of birth. Additionally, deploying technical algorithms and thoughtful
design elements can thwart attempts by minors to misrepresent their age. Setting standards for age
verification may encompass linking government-issued documents such as PAN cards and Aadhar.
Furthermore, post-identification measures, such as promptly suspending accounts based on strong
indications of underage users, stand as critical steps in fortifying the protection of minors in the dynamic
landscape of digital transactions.
Conclusion
In conclusion, the legal system is dedicated to ensuring fairness for minors in online contracts. By
focusing on restitution, it aims to fix imbalances caused by minors entering agreements without full legal
capacity.
Although we have current child protection laws, there is a crucial need for stricter regulations. Enhancing existing laws and implementing more robust measures is essential to effectively tackle challenges from online platforms and safeguard children.
Although we have current child protection laws, there is a crucial need for stricter regulations. Enhancing existing laws and implementing more robust measures is essential to effectively tackle challenges from online platforms and safeguard children.
The content of this article is intended to provide a general guide to the subject matter. Specialistadvice should be sought about your specific circumstances.
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