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Dept. of Law Amu Study Material B.A.LL.B. (HONS.) IV SEMESTER BUSINESS LAW SPECIAL CONTRACTS (SALE OF GOODS AND PARTNERSHIP) Unit 2
Conditions and Warranties (S. 12-15)
The contract of sale of goods is a special type of contract and has a huge application in the business world. These contracts are governed by the Sale of Goods Act 1930, which was earlier part of the Indian Contract Act, 1872. Because of the wide use of the contract of sale of goods, a special enactment was necessary but despite the separate legislation, the law has its root in the Indian Contract Act, 1872. Both the laws are complementary to each other thus, the basic provisions of the Indian Contract Act are applicable to the contracts of sale. Whenever we buy any goods like electronic gadgets etc, we are concerned about the warranty periods. We ask the seller about the warranty to make sure that even if the product is found to be faulty after purchase, we can easily get the product replaced or repaired. The terms “Condition” and “Warranty” are set out in the contract of sale in order to determine remedies the parties can claim in case of the breach by either of the parties. Here in this article, we will see the manner how these terms are defined, their differences and their legality in the light of Sale of Goods Act, 1930. Definition Certain provisions need to be fulfilled as demanded in the contract of sale or any other contract. The condition is a fundamental precondition on the basis of which the whole contract is based upon, on the other hand, warranty is the written guarantee wherein the seller commits to repair or replace the product in case of any fault in the product. Section 11 to 17 of the Sale of Goods Act enlightens the provisions relating to Conditions and Warranties. Section 12 of the Act draws a demarcation between a condition and a warranty. The determination of condition or warranty depends upon the interpretation of the stipulation. The interpretation should be based on its function rather than the form of the word used. Condition In the context of the Sale of Goods Act, 1930, a condition is a foundation of the entire contract and integral part for performing the contract. The breach of the conditions gives the right to the aggrieved party to treat the contract as repudiated. In other words, if the seller fails to fulfil a condition, the buyer has the option to repudiate the contract or refuse to accept the goods. If the buyer has already paid, he can recover the prices and also claim the damages for the breach of the contract. For example, Sohan wants to purchase a horse from Ravi, which can run at a speed of 50 km per hour. Ravi shows a horse and says that this horse is well suited for you. Sohan buys the horse. Later on, he finds that the horse can run only at a speed of 30 km/hour. This is the breach of condition as the requirement of the buyer is not fulfilled. The conditions can be further classified as follows.
Dept. of Law Amu Kinds of conditions
- Expressed Condition The dictionary meaning of the term is defined as a statement in a legal agreement that says something must be done or exist in the contract. The conditions which are imperative to the functioning of the contract and are inserted into the contract at the will of both the parties are said to be expressed conditions.
- Implied Condition There are several implied conditions which are assumed by the parties in different kinds of contracts of sale. Say for example the assumption during sale by description or sale by sample. Implied conditions are described in Section 14 to 17 of the Sale of Goods Act, 1930. Unless otherwise agreed, these implied conditions are assumed by the parties as if it is incorporated in the contract itself. Let’s study these conditions briefly: - Implied condition as to title In every contract of sale, the basic yet essential implied conditions on the part of the seller are that-
- Firstly, he has the title to sell the goods.
- Secondly, in case of an agreement to sell, he will have the right to sell the goods at the time of performing the contract. Consequently, if the seller has no title to sell the given goods, the buyer may refuse or reject those goods. He is also entitled to recover the full price paid by him. In Rowland v. Divall (1923) , the party bought a second-hand motor car from the former and paid for the same. After six months, he was deprived of it as the seller had no title to sell the car. It was held that the aggrieved party is entitled to recover the money. - Implied condition as to the description Moving to Section 15 of the Act, In the contract of sale, there is an implied condition that the goods should be in conformity with the description. The buyer has the option to either accept or reject the goods which do not conform with the description of the good. Say for example: Where Ram buys a new car which he thinks to be new from “B” and the car is not new. Ram’ can reject the car. Referring to Section 16(2) of the given Act, goods must be of merchantable quality. In other words, the goods are of such quality that would be accepted by a reasonable person. For eg: A purchased sugar sack from B which was damaged by ants. The condition of merchantability is broken here and it is unfit for use. It must be noted from this section that the buyer has the right to examine the goods before accepting it. But a mere opportunity without an actual examination would not suffice to deprive the buyer of his rights. If, however, the examination does not reveal the defect but within a reasonable time period the goods are found to be defective, He may repudiate the contract even if he approves the goods.
Dept. of Law Amu possession of the goods, is later disturbed at any point, he can sue the seller for the breach of warranty. For e.g. ‘X’ purchased a second-hand bike from ‘Y’. Unknown to the fact that the bike was a stolen one, he used the bike. Later, he was compelled to return the same. X is entitled to sue Y for the breach of warranty. Warranty as to freedom from Encumbrances In Section 14(3), there is an implied warranty that the goods shall be free from any charge or encumbrances that are in favour of any third party not known to the buyer. But if it is proved that the buyer is known to the fact at the time of entering into the contract, he will not be entitled to any claim. For e.g. A pledges his goods with C for a loan of Rs. 20000 and promises him to give the possession. Later on, A sells those goods to B. B is entitled to claim the damages if he suffers any. Implied warranty to disclose Dangerous nature of the goods sold If the goods sold are inherently dangerous or likely to be dangerous and the buyer is not aware of the fact, it is the duty of the seller to warn the buyer for the probable danger. If there would be a breach of this warranty, the seller will be liable. For eg: A purchases a horse from B if the horse is violent and then It is the duty of the seller to inform A about the probable danger. While riding the horse, A was inflicted with serious injuries. A is entitled to claim damages from B. Difference between Condition and Warranty BASIS FOR COMPARISON
CONDITION WARRANTY
Meaning It is a stipulation which forms the very basis of the contract. It is additional stipulation complementary to the main purpose of the contract. Provision Section 12(2) of the Sale of Goods Act, 1930 defines Condition. Section 12(3) of the Sale of Goods Act, 1930 defines Condition. Purpose Condition is basic for the formulation of the contract. It is a written guarantee for assuring the party. Result of Breach of Contract The whole contract may be treated as repudiated. Only damages can be claimed in case of a breach. Remedies available to the aggrieved party Repudiation, as well as damages, can be claimed. Only damages can be claimed.
Dept. of Law Amu When does Condition sink to the level of Warranty? Section 13 of the Act specifies the cases wherein a breach of Condition sink to the level of breach of Warranty. In the first two following points, it depends upon the will of the buyer, but the last one is compulsory and acts as estoppel against him:
- When the buyer waives the condition, the condition is considered a warranty.
- A condition would sink to the level of warranty where the buyer on his own will treat the breach of condition as a breach of warranty.
- Wherein the contract is indivisible and the buyer has accepted the whole or part of goods, the condition is treated as a warranty. Consequently, the contract cannot be repudiated. However, the damages can be claimed.
Rule of Caveat Emptor (S.16-17)
The rule of caveat emptor which means “let the buyer beware” has been overridden by the rule of caveat venditor. Such change was required because of changing conditions of modern trade and commerce. The phrase caveat emptor is not used by the judges very often nowadays. This doctrine is based on the principle that when a buyer is satisfied as to the product’s suitability, then he is left with no subsequent right to reject such product. The caveat emptor rule originated many years ago in common law and over the times has undergone major changes. The exceptions of the doctrine started expanding with time as it was being given a concrete shape. Statement of Caveat emptor The principle of Caveat emptor is explained in Section 16 of the Sale of Goods Act 1930 which states that there is no implied condition or warranty as to quality or fitness for any particular purpose of goods supplied.” The History of Caveat emptor In the 19th century, the attitude of common law towards the buyer can be understood by the maxim Caveat emptor which means let the buyer beware. This maxim explains that a purchaser must carefully examine and judge what is best for him. The purchaser should not take the risk of the condition and quality of the object which he needs to buy, he must protect himself by a warranty. The philosophy behind the rule of Caveat emptor basically was that buyer shall apply his own skill and judgment before buying. It is based on the fundamental principle that when a buyer is satisfied with the suitability of the product for his use, no subsequent right will be left with him to reject the same. When the rule of caveat emptor originated, it was quite rigid and there was no scope for any subsequent change in the rule. In English Sale of Goods Act, 1893, it is highly noticeable and evident that the seller’s duties as to requirements of disclosure when a product is sold was minimal. There was no duty upon the seller to provide information and proper examination of the goods by the buyer was considered over and above any other duty. The Concepts which could be used to shift the burden as to quality and fitness on the
Dept. of Law Amu In Ward v. Hobbes (1878) 4 AC 13, the House of Lords held that if a seller uses artifice or disguise to conceal the defects in the product which is to be sold, it would amount to fraud on the buyer; still no duty to disclose the defects in the product is imposed on the seller by the doctrine of caveat emptor. An obligation to use care and skill while purchasing goods is imposed on the buyer by the doctrine of Caveat emptor. The Court of Appeal Wallis v. Russel (1902) 2 IR 585, explained the scope of caveat emptor and laid down that the rule of Caveat emptor implies that “the buyer must take care”. It applies to the purchase of those things upon which buyer can exercise his own skill and judgment, e.g. a picture, book, etc (also known as specific goods); it also applies in the cases where by usage or by a term of contract it is implied that the buyer shall not rely on the skill and judgment of the seller. Exceptions to The Rule of Caveat emptor (Section 16 of The Sale of Goods Act, 1930) Fitness for buyers’ purpose [Section 16(1)] Section 16(1) of the said Act provides that in situations where the seller is aware either expressly or by necessary implication of the purpose for which a buyer needs to purchase a specific product, further, the goods are of such description which the seller supply in his ordinary course of business and by relying upon the judgment and skill of the seller, the buyer purchases that product, then the goods should be in accordance with the purpose. In other words, this section explains the circumstances where the seller has an obligation to supply the goods to the buyer as per the purpose for which he intends to buy the goods. Requirements of Section 16(1) are as follows : - The buyer should explain the particular purpose for which he is making the purchase to the seller. The buyer should rely on the seller’s skill and judgment while making a purchase. The goods must be of a description which the seller in his ordinary course of business supply. In Shital Kumar Saini v. Satvir Singh, a compressor was purchased by the petitioner with one- year warranty. The defect in the product appeared within three months. The petitioner sought a replacement. The seller replaced it but did not provide any further warranty. The State Commission stated that an implied warranty was guaranteed under section 16 of the Sale of Goods Act, 1930 and allowed it to be rejected. Sale under Trade Name [Proviso to S. 16(1)] In some cases, a buyer purchases goods not by relying on the skill and judgment of the seller but by relying on the product’s trade name. In such cases, it would be unfair that the seller is burdened with the responsibility of quality. The proviso to Section 16 deals with such cases. It provides that: “Provided that, there is no implied condition as to fitness for any particular purpose in the case of a contract for the sale of a specified product under its patent or other trade names. Merchantable quality [Section 16(2)]
Dept. of Law Amu The second most important exception to the rule of Caveat emptor is incorporated by Section 16(2) of the Act. The Section imposes a duty upon the dealer to deliver the goods of merchantable quality. Section 16(2) states that there is an implied condition that when goods are purchased by description from a seller who deals in the goods of that description, the goods shall be of merchantable quality. Meaning of Merchantable Quality: It implies that when the goods are purchased for resale, the goods must be capable enough of passing in the market under the name by which they are sold. Merchantable quality depends on the following two factors: - Marketability- Merchantability does not mean that the goods are saleable just because the goods look all right, but they shall be marketable at their full value. “Merchantability does not mean that the goods are saleable even if it has defects which makes it unfit for its proper use but is not noticeable on ordinary examination. Reasonable fitness for general purposes- “Merchantable quality” means, that if goods are purchased for self-use, they must be fit for the purpose for which they are generally used. Example: A person bought a hot-water bottle which is generally used for the application of heat. The bottle burst to scald the person’s wife. The seller was held to be liable. Examination by buyer [Proviso to S. 16(2)] The proviso to S. 16(2) provides that “if upon examination of the goods to be purchased, the defects ought to have been revealed, then no implied condition as regards to the defect will exist.” The requirement provided in the proviso would be considered as satisfied fully when the buyer was given full opportunity to examine the goods and the argument that the buyer did not use that opportunity will not make any difference, an existence of opportunity is sufficient in such cases. Conditions implied by trade usage [Sec. 16(3)] Section 16(3) gives statutory force to the conditions implied by the usage of a particular trade. It states: “An implied condition or warranty as to the quality or fitness for any particular purpose may be annexed by the usage of trade.” In the case of Peter Darlington Partners Ltd v Gosho Co Ltd, a contract for the sale of canary seeds was subjected to the custom of trade and held that if there exist any impurities in the seeds the buyer will get a rebate on the price but he would not reject the goods. However, a custom which is unreasonable will not affect the parties’ contract. Thus, it can be concluded from the aforementioned analysis that the rule of Caveat emptor is being taken over by the rule of Caveat venditor and is dying a slow death. The change is taking place in order to create a more consumer-oriented market wherein transactions of commercial nature will be encouraged. Such change will help to create a more consumer-friendly market and an appropriate balance can be maintained between the rights and obligations of the buyer and the seller. But it should be noted that if this approach is taken too far, it might end up in
Dept. of Law Amu For example, Deepak from his 300 oranges wants to sell 100 oranges; however, he doesn’t specify which oranges he wants to sell. This is called a sale of unascertained goods. Future Goods As per Section 2(6) of the Sale of Goods Act, 1930, future goods have been characterised as those goods which at the time of formation of the contract will either be “manufactured, produced or acquired by the buyer”. There will not be an actual sale in the sale of future goods, it will always be an “agreement to sell”. For example, Deepak has an orange grove with oranges in it. He agrees to sell 500 oranges to a buyer once the oranges are ready for market. This is a sale which will happen in the future. However, the goods have already been identified along with the agreement to sell. Such goods are known as future goods. Contingent Goods Contingent goods are a subtype of future goods. In contingent goods, the sale happens in the future. The sale will always come with some contingency clause in it. For example, if Deepak sells his oranges from his orange grove when the trees are yet to produce oranges, then the oranges are contingent good. This sale of contingent goods will be dependent on a condition that the trees will produce oranges, which may or may not happen. Legal Principles regarding Transfer of Goods There are four principles regarding the transfer of goods under the umbrella of The Sale of Goods Act, 1930, which the article will be talking about and they’re as follows: Transfer of property in sale of Specific or Ascertained Goods Section 19 to section 22 of The Sale of Goods Act, 1930 are a few sections which govern the transfer of goods in a case where the goods are specific and ascertained in nature: Property when intended to pass (Section 19) Section 19 of The Sale of Goods Act, 1930, is divided into further subsections and they’re as follows:
- Where a contract for sale of ascertained or specific goods exists, a specified time is fixed as per the convenience and consensus of both the parties at which the property is intended to be transferred from the seller to the buyer.
- One has to pay attention to the circumstances and conduct of both the parties to the contract in order to understand the true intention of the contracting parties. Also, the terms of the contract should be given equal importance in the existing case.
- Except if an alternate intention shows up, the principles laid under the Section 20 to 24 of the Act will help in finding out the intention of the contracting parties in respect with the time at which the goods are about to get transferred from the seller to the buyer. Specific goods in a Deliverable state (Section 20) Section 20 of The Sale of Goods Act, 1930 relates to specific goods in a deliverable state, and it states:
Dept. of Law Amu In a contract for the sale of specific goods, which is unconditional in nature, the goods are transferred from the seller to the buyer at the time of formation of the contract. However, the only precondition required for the transfer of property is the fact that the goods must be existing in a deliverable state. The delay in the payment or delivery of goods or both is not something which holds importance. Example: A goes to a big electronic shop in order to buy a television set. He selects a big plasma Television set and asks the shopkeeper to deliver the television at his house which is at the other end of the town. The shopkeeper agrees to it. With this, “A” will become the owner of the television, and the Television set will become his property. Specific goods to be put into a deliverable state (Section 21) Section 21 of The Sale of Goods Act, 1930: certain goods to be put in a deliverable state: Where there is an existence of a contract for the sale of specific goods, the property concerned in the transaction will only be passed to the buyer, if the seller performs the necessary acts and omissions in order to put the goods in a deliverable state. Also, it is mandatory for the seller to notify the buyer regarding the alterations. Example: A goes to a mall to buy a smart television from an electronics store. He selects a big fancy smart TV from the electronic section and asks for its home delivery. The manager agrees to deliver it to A’s home. However, at the time where he selects the smart TV, it doesn’t have an operating system installed. The manager promises to install the operating system and on the next day, he informs “A” that his smart TV is now installed with the operating system and is ready for its delivery. Further, he asked for his permission to make the delivery. In order to summarize the example, the goods will only be transferred to “A” if the manager has installed the operating system making the smart TV ready for its use. Specific goods are in a deliverable state but the seller has to do something to ascertain the price (Section 22) Section 22 of The Sale of Goods Act, 1930: Specific goods are in a deliverable state but the seller has to do something to ascertain the price: Where there is a contract for the sale of specific goods in a deliverable state, the seller is undoubtedly bound to weigh, measure, test or do the necessary demonstration or anything which is required in reference with the sale of those particular goods. He’ll be doing this to ascertain the appropriate value of the goods. The property in the goods will not pass until such demonstration or particulars are done and the buyer has acknowledged it thereof. Example: Rishabh sells a wooden bed to Deepak and agrees to assemble it in Deepak’s bedroom as it was a part of the agreement. Rishabh delivers the wooden bed and makes a call to him informing Deepak that he will assemble the wooden bed the next day. That night the wooden bed gets stolen from Deepak’s premises. In this case, Deepak will not be liable for the loss since the wooden bed was not passed to him. According to the terms of the contract, the wooden bed would be in a deliverable state only after it is assembled. Transfer of property in sale of Unascertained Goods
Dept. of Law Amu prepared value system, the ownership follows the possession. That is to say, the seller transfers the possession of the goods but retains the ownership until the buyer pays the appropriate amount. Reservation of Right to Disposal (Section 25) Section 25 of Sale of Goods Act, 1930 deals with the conditional appropriation of goods and is bifurcated into the following subsections: Section 25(1): As per the terms and conditions of the contract the seller of goods reserves the right of disposal of the goods in a situation where the sale of specific goods is concerned. Despite the delivery of the goods, the goods will not get transferred from the seller to the buyer unless the subsequent terms of the contract aren’t appropriated or fulfilled. For example, A sends certain goods by rickshaw to B and instructs the rickshaw driver not to deliver the goods until B pays him the price which was set between them as per the agreement. The rickshaw reaches the destination in time. However, the buyer “B” refuses to pay the amount as he had no money with him at the moment. Here the rickshaw driver can refuse to deliver the goods and the seller can rightly exercise his right to disposal. Section 25(3): A few perspectives pertaining to the transfer of property during a sale of goods or property are encapsulated in Sales of Goods Act, 1930. The liabilities of the buyer and seller are determined in consonance with the provisions enshrined from section 18 to 25 of The Sale of Goods Act. The concept of possession of goods differs from passing of the goods as the latter in essence means transfer of ownership from the seller to the buyer while the former is confined to the custody of goods. Cases pertaining to Transfer of Property Badri Prasad Vs. State of Madhya Pradesh In the case of Badri Prasad Vs. State of Madhya Pradesh, the appellant entered into a contract in respect of certain forests in Madhya Pradesh. He was entitled to chop teak trees with girth over 12-inch. After the passing of the Abolition of Proprietary Rights (Estates, Mahals. Alienated Lands) Act, the appellant was prohibited from cutting trees in the exercise of his rights under the contract. He filed a suit claiming specific performance of the contract on the grounds: (1) The forest and trees did not vest in the State under the Act; (2) Even if they vested, the standing timber, having been sold to the appellant, did not vest in the State; (3) In any event, a new contract was completed on 5 February 1955, and the appellant was entitled to its specific performance. The court held: The forest and trees vested in the State under the Act. The plaintiff was entitled to cut teak trees of more than 12-inch girth. However, it had to be ascertained which trees would be falling in that Description. Till this was ascertained, they will not be ascertained goods as per Section 9 of the Sale of Goods Act. Multanuak Chempalal Vs. C.P Shah & Co.
Dept. of Law Amu In the case of Multanuak Chempalal Vs. C.P Shah & Co., Section 26 of the Sale of Goods Act 1930 was discussed and it was held that the risk passes only after the property in the agreement has been passed. Thus, the parties can enter into a contract which provides for the passing of risk before the passing of property. Hoogly Chinsurah Municipality vs Spence Ltd In the case of Hoogly Chinsurah Municipality vs Spence Ltd, the Hoogly Chinsurah Municipality contracted with Spence Ltd to buy a tractor on the condition that if the municipality is not satisfied then it will reject the tractor. The municipality took possession of the tractor, used it for a month and a half and then rejected it. The suit was filed upon the unwillingness of Spence Ltd to accept it. The Court while dismissing the appeal held that, the municipality had not only used the tractor but also extinguished a reasonable time. Hence the property in the tractor had passed to the municipality and they could not reject it now. The Sale of Goods Act, 1930 tells us about a few views regarding the transfer of property during a contract pertaining to the sale of goods. Section 18 to 25 of the Sale of Goods Act, 1930 provides the contracting parties several principles, through which rights and liabilities of the buyer and seller are determined. Passing of the goods from the seller to the buyer portrays the transfer of ownership from one party to another, which is without an exception a different concept from that of the possession of goods as possession only involves custody of goods.
Distance selling and e-commerce
E-Commerce, also known as electronic commerce or internet commerce, is an activity of buying and selling goods or services over the internet or open networks. So, any kind of transaction (whether money, funds, or data) is considered as E-commerce. So, E-commerce can be defined in many ways, some define E-Commerce as buying and selling goods and services over the Internet, others define E-Commerce as retail sales to consumers for which the transaction takes place on open networks. The buying and selling of products, services, and digital products through the Internet all fall under the umbrella of e-commerce. Organisation for Economic Cooperation and Development (OECD) defines e-commerce as: “All forms of transactions relating to commercial activities, including both organizations and individuals, which are based on the processing and transmission of digitized data including text, sound, and visual images.” According to this view, E-commerce does not necessarily require the use of the Internet. E-commerce includes all forms of transactions that process and transmit digitized data which includes text, sound and visual images. E-commerce is the application of information technology and communication technology to three basic activities related to commercial business; the three basic activities are as follows:
- Production and support- which includes assisting production, distribution, and maintenance of goods and services.
- Transaction preparation- which includes getting product information into the market- place and bringing buyers and sellers into contract with each other; and
- Transaction completion- which includes concluding transactions, transferring payments, and securing financial services.
Dept. of Law Amu consumers. Many common C2A transactions may include paying taxes, fines, or paying tuition to a University. The main objective of both the B2A and C2A types of eCommerce is to increase flexibility, efficiency, and transparency in public administration. Important Issues in Global E-commerce
- Issue relating to Privacy- The increase of electronic transactions over the internet raises various concerns on the collection, storing and manipulation of personal information without the consent or knowledge of consumers. The functioning of E-Commerce is highly connected and dependent upon the collection and storing of personal information of consumers to provide them with the products and services and maintain their data. Therefore, there is a chance that without the consent or knowledge of consumers, personal information may be shared with or sold to others. Because of these concerns the protection of privacy has become one of the most important policy issues among policy-makers, businesses and consumers.
- Issue relating to Security- E-Commerce security can be defined as “a protection of an information resource from the threats and risks in the confidentiality, authenticity and integrity of the electronic transactions transmitted via a network”. The e-commerce can only grow if the system is capable of providing the same level of trust and security which is found in traditional methods of business. This can be achieved only if consumers of e-commerce are confident of the security provided by the concerned e- commerce.
- Issue relating to Consumer Protection– The consumers must be sure that they are as protected in the electronic marketplace as they are in the real marketplace. There are many consumer protection issues related to electronic transactions such as card information, bank information, etc. Therefore, it becomes important that confidential information such as credit/ debit card information, bank account number etc. are kept protected. Earlier, it used to be difficult for a consumer to verify the authentication and security information in an online atmosphere, but with the introduction of digital signature it has become easy and safe.
- Issue relating to Content Regulation- There is certain types of online transmissions that are deemed inappropriate, offensive or harmful to certain segments of consumers and users of E-Commerce. Adult materials, bullying, terrorism, hate speech against minors and sedition are some examples of those activities that raise public concerns. And those who are concerned about these harmful or inappropriate Internet contents advocate for regulatory intervention and content regulation by government and concerned organizations. This is an issue for policy makers and concerned companies. However, the counter argument for such content regulation and intervention is on the ground of right to speech and expression. This problem should be solved without affecting the functioning and growth of e-commerce.
- Issues relating to Access: The following are the main issues related to access to e- commerce:
Dept. of Law Amu Access to infrastructure- In order to conduct commercial transactions over the Internet, consumers need to have access to telecommunications networks and services. Access to content- In e-commerce, the kind and amount of content transmitted over this infrastructure is also one of the critical elements for the growth of e-commerce. The contents have to be competitive, respecting the cultural values of others, and not inappropriate or harmful to others. Universal access- With the increasing importance and involvement of Information and Communication Technologies in our everyday lives, universal availability of various communication services, has become a necessity for both consumers and companies of e- commerce. A large number of people are still living without the basic telephone services. This gap related to technology and digitization in the world population is called as digital divide. The digital divide affects the people’s capacity to access modern Information and Communication Technologies, which in turn impedes their capacity to access the Internet and e-commerce, which ultimately daunts the growth of e-commerce. Language and localization: With e-commerce extending to other boundaries, language and localization becomes an issue because it becomes difficult to communicate with a native speaker of any particular country. Pros of E-Commerce E-commerce is an advanced way of conducting businesses online and across the borders and because of that it has various advantages to it:
- Its reach is across the global market and with minimum investments.
- It enables sellers to sell their products on a global level and allows customers to make a broader choice. Now sellers and buyers can meet in the virtual world, without the barrier of borders.
- E-commerce process reduces the product distribution chain to a considerable extent.
- It helps in making a direct and transparent business and transaction channel between the producers, wholesalers and final customers.
- It provides quick delivery of goods and customer complaints are also addressed quickly. It also saves time, energy and effort for both the consumers and the company.
- E-commerce leads to increased productivity and better service as it brings sellers and customers closer.
- The customer can choose between different sellers.
- Customers now have access to virtual stores all the time.
- E-Commerce leads to considerable cost reduction of goods and services. Transaction costs are also reduced in E-commerce and due to that customers get to buy products at a comparatively lower rate. Cons of E-Commerce However, along with advantages, E-commerce has certain disadvantages too, such as:
