Dark Patterns and Free Consent in Digital Banking Contracts: A Doctrinal Analysis under the ICA, 1872

Abstract

The creation of contracts in the digital world of banking is no longer done by way of negotiations but instantly through interactions with the digital interfaces. With the increasing trend of the standard form electronic contracts in the banking industry, there has been a growing apprehension about the presence of dark patterns which might subtly affect the decision-making process of the customers in entering into contracts, thus putting the existence of free consent under the ICA, 1872 into question. Bank services today are mainly offered through mobile banking apps, online banking sites and digital loaning interfaces where the customers enter into agreements with pre-drafted terms and conditions in order to avail banking services. In this paper, an analysis is conducted regarding whether or not consent obtained using dark patterns fulfills the requirement of free consent as per Sections 13 and 14 of the ICA, 1872. Using the doctrine research method, the study discusses the legal character of digital banking contracts, the legal principles of free consent and their implications on contracts involving misleading digital interfaces. The study also assesses the importance of recently undertaken regulatory initiatives by the Reserve Bank of India against dark patterns in digital banking. The paper asserts that while there exist principles of contract law of India which form the basis of disputing consent obtained by manipulative means, the failure to recognize the concept of dark patterns in statute law leads to uncertainty.