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A sends B an email offering to sell his car for a stated price. B replies by email accepting the offer unconditionally. Neither signs a paper document, and every other requirement of a valid…

Question and options

A sends B an email offering to sell his car for a stated price. B replies by email accepting the offer unconditionally. Neither signs a paper document, and every other requirement of a valid contract is met. What is the legal position?

  1. No contract exists unless both emails bear electronic signatures

  2. A contract exists, but either party may avoid it as voidable

  3. No contract exists until a paper copy is signed

  4. A binding contract has been formed

Answer and explanation

Correct answer: D - A binding contract has been formed

Section 10A of the Information Technology Act, 2000 provides that a contract formed by electronic communication of proposal and acceptance is not unenforceable on that ground alone, and the Indian Contract Act, 1872 requires no particular form for such a sale. Neither a signed paper nor an electronic signature is a condition of an ordinary contract, and electronic formation does not make it voidable.

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