REVISITING SECTION 182
Section 182 of the Indian Contract Act, 1872 has been the backbones of agency law in India for over a century. However, rapid digitization of commerce and e-commerce businesses have added new dimensions to it, pushing the established laws to their test of applicability as well as effectiveness.
A thorough review of the existing provisions of Section 182 will find that several areas would require adjustment and probably clarifying to fully address the current digital mode and e-commerce.
Defining Agency Relationships in the Digital Realm
The traditional definition of agency relationships as contemplated under Section 182 is based on a classic concept of physical presentation and direct contact between the principal and the agent. But in the virtual world, these relationships are more diverse and multidimensional. For instance, in e-commerce sites, there’s a bit of a role of an agent since they act as an intermediary between principals (individuals who are selling the product) and customers. They can collect payments and even deal with logistics on behalf of the principal. Under the existing provisions of Section 182, for such scenarios, what will be the exact nature of the agency relationship and corresponding rights, duties, and liabilities of the parties involved may not be directly evident.
Territory of Responsibility and Powers
The age of new information technology has brought along novel ways for agents to exercise their powers and make decisions on behalf of principals. Technological intermediaries-technological agents, in the form of AI-powered algorithms and automated decision-making systems -are introduced as capable of performing transactions, suggesting products, or communicating with customers on their own. The review of the powers of the agent and those of the principal over the technological agents would require a reconsideration of Section 182 provisions.
The Disclosure and Transparency Requirements
Section 182 again displays how disclosure and transparency would be essential in an agency relation, especially regarding the agent’s authority and the principal’s identity. In the case of e-commerce platforms and digital intermediaries, the norms of disclosure are likely to be reassessed so that the customers are better informed about the agency relation, the scope of authority undertaken by the agent, and the role of the principal in the transaction. These are essential to give confidence and informed choices to be made on the digital marketplace.
Liability Allocation
The underlying precepts of joint and several liability, as codified in Section 182, perhaps should be reconsidered in light of the changed vista presented by the internet and electronic commerce. Where these technological agents or e-commerce sites play a pivotal role in the conduct of the transaction, apportionment of liability between the principal, the agent, and the customer would present an unfitting picture within the current legal schema.
Technological Enablement and Automation
Increased dependence on technological intermediaries; AI-based decision-making capabilities; and automated process engagements within the digital economy have posed new issues which the existing provisions of Section 182 may not strike off effectively. Legal Implications from Technological Agency: Principal Responsibility for the Conduct of Technological Agents: How these changed elements can affect an overall agency relationship requires careful analysis and likely modifications in the prevalent legal text.
Accordingly, a corresponding speed must be observed and discussed with regard to the provisions of Section 182 of the Indian Contract Act, 1872 for ensuring relevance, effectiveness, and responsiveness of the legal framework governing agency relationships to the emerging needs of the digital age and the e-commerce platform.
KEY CONSIDERATIONS
With the continued development of digital transformation in commerce, rewriting the business landscape, comes an even greater use of Section 182 of the Indian Contract Act, 1872, for e-commerce platforms and the modern agency relationships with an examination of a few relevant issues.
Definition and scope of agency relationships in digital environments is one of the most primary concerns. Gopinath and Sharma have argued that principal-agent frameworks are unable to capture the complexities of an online marketplace, as the traditional agency mechanisms go beyond the conventional understanding of any agency’s several roles played by e-commerce platforms. It signifies the precise nature of an agency relationship, the scope of control the principal does, and the spread of duties or responsibility among the platforms, sellers, and customers in maintaining principles of agency law in this day and age.[i]
Other very pertinent issues are disclosure and transparency in digital agency relationships. Section 182 relates to the need to ensure that third parties are informed about the authority of the agent and the identity of the principal. As Agrawal and Jain (2021) note,[ii] the opacity and dynamic nature of an e-commerce portal may often make it difficult for third parties to identify that a customer is a principal or an agent and upon which rights he or she is acting. Disclosure requirements need to be revisited to achieve greater transparency and enlightened decision-making within the digital marketplace.
An important area is in the allocation of liabilities within a relationship of digital agencies. Bansal and Gupta (2018) specifically discussed the complex nature of dealings where technological intermediaries, including AI-powered algorithms, take decisions and carry out transaction processing on behalf of principals. Given this, a possible ultimate solution for the special circumstances surrounding the digital environment could be the adjustment of the provisions involving joint and several liability under section 182 to balance the rights of all parties in that particular case.[iii]
Moreover, since technological enablement and automation are more prominently relied on in the e-commerce system, several facets of agency law are involved in its interpretation and application. Indeed, scholars like Sharma and Dutta (2021) have argued that the law should change to accommodate new intermediaries involving the use of artificial intelligence, algorithms, and other forms of technology-based agents to enhance transactions and communicate customers on behalf of principals. Thus, the legal impact of such intermediaries and its pertinent effect on agency relationships should be tackled to make Section 182 relevant and useful.[iv]
REFERENCES
[i] Khanna, V., & Arora, R., The Blurred Lines of Agency: Navigating Liability in Online Marketplaces, 2019 Mich. St. L. Rev. 301 (2019).
[ii] Agrawal, A., & Jain, P., Enhancing Transparency in E-commerce Platforms: Implications for Agency Law, 17 J. E-Commerce L. & Pol’y 45 (2021).
[iii] Bansal, A., & Gupta, N., Liability Allocation in the Age of Algorithmic Agency, 31 Harv. J.L. & Tech. 612 (2018).
[iv] Sharma, A., & Dutta, P., Technological Agents and the Law of Agency: Adapting to the AI-Powered Future, 15 Stan. J.L. Sci. & Pol’y 79 (2021).