Consumer Internet Standard Form Contracts in India: A Proposal

Forthcoming in 29 (1) National Law School of India Review 2017 India has experienced a dramatic increase in consumer Internet shopping due to its convenience and the myriad choices of the Internet. Further, India enjoys a rapidly developing economy, rising living standards, and improving middle-class income, all of which promote Internet shopping. However, worldwide, few consumers read their e-standard forms and India is likely no exception. In addition, the legal framework in India is inadequate to police vendor opportunism in the form of drafting unfair e-standard terms. Because consumer confidence is a prerequisite to growing Internet commerce, a more comprehensive and direct solution would be beneficial to India’s economy Consumer Internet Standard Form Contracts in India: A Proposal first examines existing strategies to protect consumers and concludes they may be inadequate. The article argues that the most promising approach to consumer protection comes from the American Law Institute’s (ALI) Principles of the Law of Software Contracts. The ALI Principles strategy is to encourage early Internet disclosure of a vendor’s standard terms, before a consumer initiates a transaction. The Principles treat such disclosure as a “best practice” that increases the likelihood of enforcement of the vendor’s e-standard terms. The ALI Principles also call for a more robust judicial use of policing tools, including unconscionability and public policy, despite the limitations of these principles. The ALI disclosure approach likely would not improve consumer reading of e-terms. However, rating services and watchdog groups (of which there are many on the Internet) would have better access to problematic terms and could publicize vendors’ use of them. Vendors would be motivated to draft reasonable terms to establish and preserve good will and good reputations.