eSignature Legality in India in corporate and commercial contracts

The Information Technology Act of 2000 ("ITA"), the Indian Contract Act of 1872 ("ICA"), and the Electronic Signature or Electronic Authentication Technique and Procedure Rules of 2015 ("ESEATPR") all recognise electronic signatures as valid legal documents in India.

 

The ITA, the ICA, the ESEATPR, the Indian Stamp Act of 1899, and the pertinent state stamp acts are the pertinent legislation and regulations pertaining to the usage of electronic signatures in India. These laws provide the framework for:

 

What "electronic signatures" are accepted by the government of India;

What paperwork or agreements cannot be made electronically;

What requirements all contracts, including those using electronic signatures but not in compliance with the ITA's officially recognised standards, must satisfy; and

Whether stamp duty is required to be paid on a specific electronic transaction.

 

A contract cannot be denied enforceability solely because it was executed electronically, according to the ITA, as long as it satisfies the requirements of a legal contract under the ICA.

Section 10 of the ICA lists the prerequisites for a legal contract. These components are listed below:

 

It is entered into by persons who are legally able to do so; it results from their free will (i.e., a valid offer and acceptance); it provides for reciprocal consideration between the parties; and it does not call for the performance of any illegal acts.

An electronic signature, according to the ITA, is "authentication of any electronic record by a subscriber by means of the electronic technique specified in the Second Schedule and includes digital signature."

 

According to the ITA, a "digital signature" is the "authentication of any electronic record by a subscriber by means of an electronic method or procedure in accordance with the provisions of section 3 [of the ITA]."

 

An "electronic signature" must meet certain requirements to be lawfully accepted under the ITA.

 

"Reliable" behaviour 

 

Utilise a method of authentication listed in the Second Schedule to the ITA.

 

An electronic signature is considered “reliable” if:

·       The signature creation data or the authentication data are, within the context in which they are used, linked to the signatory or to the authenticator and to no other person;

·       The signature creation data or the authentication data were, at the time of signing, under the control of the signatory or the authenticator and of no other person;

·       Any alteration to the electronic signature made after affixing such signature is detectable;

·       Any alteration to the information made after its authentication by electronic signature is detectable;

·       There is an audit trail of steps taken during the signing process; and

·       The digital signer certificates are issued by a Certifying Authority recognized by the Controller of Certifying Authorities appointed under the IT Act.

·       The Second Schedule provides that an “electronic signature” or electronic record can be authenticated by using either of the following methodologies:

·       Aadhaar e-KYC services, or

·       A third-party service by subscriber's key pair-generation, storing of key pairs on hardware security modules and creation of digital signature provided that the trusted third party providing such services shall be offered by any of the licensed Certifying Authority.

·       To create a digital signature, a user obtains a digital certificate from a licensed Certifying Authority.

Indian Contract Act of 1872: What makes a Contract Legal

According to Section 2(h) of the Indian Contract Act, of 1872, a contract is defined as an agreement between two or more people that is rendered legally enforceable and that establishes and specifies the duties of the parties. The statement “every agreement and promise enforceable by law is a contract” is attributed to Sir F. Pollock. 

Two essential components:

• An agreement
• Enforceable by law.

The following components make up a contract:

Offer: Section 2(a) of the Indian Contract Act of 1872 states that a proposal is made when one person expresses to another his readiness to perform an act or refrain from performing one in order to get the approval of the other party. Acceptance is defined as the expression of assent to the offer made by the

offeror in Section 2(b) of the Indian Contract Act, 1872. This acknowledgment demonstrates that the proposal is indeed approved.

Promise: A person makes a proposal when he or she indicates their willingness to do or not do something. The proposal turns into a promise after the promisee accepts it.

Agreement: The legal, mutually binding commitment made between private parties is referred to as an agreement.

Contract: According to Section 2(h) of the Indian Contract Act of 1872, a contract is a legally binding agreement.

Employment Law - Merger , Acquisition and Integration

People and People Practice review and integration is the most important aspect of any Merger Acquisition deal. This if not done appropriately can expose the company to huge risks.

Our lawyers advise and assist clients in buying and selling companies throughout the entire transaction life-cycle, by providing support for the full range of HR and employee-related issues, including due diligence, Process and Policy Review, gaps and risks identification and mitigation, employee transfers, unions/works council management and advice, and post-deal transaction integration. Issues such as the transfer of personnel from the transferor to the transferee generate legal challenges in circumstances. We counsel clients on the different labor law consequences of such transactions and assist them in structuring them in such a way that the transfer of employment complies with all statutory requirements.

This includes the following Services :

HR policies, procedures, and employment Law practice Due Diligence.

Risk identification and mitigation plan.

Review Policies and plan Harmonization of policies and thereafter drafting.

Review Employment Contracts and draft appropriate addenda to safeguard both employer and employee interest post-Merger, Acquisition, and Integration

Support in integration, Onboarding, and communication plan.

Employment Policy Design in India

Employment / HR policies provide written guidance for employees and managers on how to handle a range of employment issues. They play an important role in practically and effectively implementing an organization’s HR strategy. Human resources policies provide the necessary structure many businesses need to sustain the company’s productivity and overall profitability. Our HR policy design services are responsible to review existing policies, identifying gap areas, design policies, programs, and initiatives aligned to HR strategy, the Company’s Values, Vision, Business requirements, and the law of the land.

We design policies for the complete life cycle of employees in an organization. Covering areas from Talent Acquisition, Talent Management, Total Rewards and Wellness (Employee Benefits & Compensation Structuring, Employee Stock Options & Share Plans), Employee Relations, Talent Development, Health and Safety, Administration, Diversity and Inclusion, Code of conduct, Employee Participation, Employee Separation policies (including VRS), Communication policies including social media, etc.

This includes the following Stages :

HR Policy Current Stage Audit

Risk and Gap Identification

Identify Policies required based on business requirements and the law of the land.

Advisory on identified policies

Provide Required Support w.r.t Industry Insights (without client details) and Best Practices

Drafting, Implementation, Rollout, and Communication plan support.