“With rapid developments in global trade and technology today, concluding a contract by traditional methods is gradually being replaced by electronic methods. Amid the Covid-19 pandemic, enterprises have adapted by signing contracts electronically to ensure safety.”
Instead of signing a contract in the traditional method with physical signatures, the parties to the contract can now sign the contract through electronic methods. According to the Law on E-transactions 2005, “E-contracts mean contracts established in the form of data messages provided for in the Law on E-transactions 2005” – In which, “A data message means information created, transmitted, received and stored by electronic means” and “An electronic means is a means that operates based on electric, electronic, digital, magnetic, wireless, optical, electro-magnetic technologies or similar technologies”.
“In the process of entering into and executing an e-contract, a notice in the form of a data message shall be legally valid like a notice in the traditional form”. According to the Law on E-transactions 2005, “An e-signature is established in the form of words, letters, numerals, symbols, sounds or other forms by electronic means, logically attached or associated with a data message and capable of certifying the person who has signed the data message as well as the approval of such person to the content of the signed data message”.
Contracts can be signed electronically via the following three methods:
To create digital signatures, the parties use a platform and specialized equipment (usually a USB token) provided by the company providing the digital signature certification service. This signature is inserted in the form of a digital signature into the contract to be signed.
According to the ‘Law on E-transactions, 2005’ and ‘Decree 130/2018/ND-CP’ provide guidelines on digital signatures and digital signature authentication. A digital signature is considered a type of electronic signature if it meets the conditions to ensure safety as prescribed by law. If the law requires a document to be stamped with a seal of the concerned agency or organization, such requirement with respect to a data message shall be considered having been met if the data message has been signed by an e-signature of the agency or organization.
The current laws only recognize the validity of contracts concluded electronically by using digital signatures. According to the provisions of the ‘Law on E-transactions, 2005’ and the ‘Decree 130/2018/ND-CP’, the legal status of digital signatures is described as follows:
The ‘Law on E-transactions, 2005’, ‘Decree 130/2018/ND-CP’ and ‘Decree 52/2013/ND-CP’ on e-commerce do not specify scanned signatures and image signatures. Therefore, scanned signatures and image signatures are not automatically considered as valid types of electronic signatures. This implies that contracts concluded electronically by means of image signatures or scanned signatures are not legally enforceable by default.
However, the law does not lay down any specific regulations that either recognize the validity of contracts signed with scanned signatures and image signatures or rule-out the validity of such contracts. Contracts signed by image signatures or scanned signatures are still considered legally valid as long as such signatures represent the will and voluntariness of the parties or the authorized person(s) who have the right to sign these contracts because:
Therefore, the provisions of the Civil Code 2015 have formed the legal basis for the use of scanned signatures and image signatures to conclude contracts. This approach has limited, to an extent, the risk of the contract being voided.
Precedents in Vietnamese courts have paid more attention to determining the will of the parties when entering a contract than the form of consent to such contract. Therefore, although the laws have not specified the legal status of scanned signatures or image signatures, entering contracts with these two types of signatures is not explicitly prohibited.
In conclusion, utilizing the benefits of technology in signing contracts, is a suitable and effective solution for many enterprises, especially in the current pandemic scenario.
Date of writing: 09 June 2021
This article is based on the current laws at the above recorded time and may no longer be relevant at the time readers access this article due to changes in applicable law and specific cases which the readers want to apply. Therefore, this article is for reference only.