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In the Vietnamese mindset, contracts are often associated with the concept of paper documents signed by hand and stamped with a company's seal. However, with the development of network infrastructure, online platforms, and the proliferation of electronic transactions in recent years, the concept of paper contracts, or traditional contracts, is gradually being replaced by electronic contracts. Handwritten signatures and red seals are being supplanted by auxiliary tools for electronic contracts such as electronic signatures, digital signatures, and signature certificates. Electronic contracts and their auxiliary tools offer numerous advantages, such as eliminating the need for physical storage space, reducing printing costs, and being unaffected by environmental factors. Moreover, electronic contracts and auxiliary tools do not require parties to meet in person or transport original documents via courier services.
So, what are electronic contracts, electronic signatures, digital signatures, and electronic signature certificates? What are their differences from traditional forms? How should electronic contracts, electronic signatures, digital signatures, and electronic signature certificates be used correctly? And more importantly, do electronic contracts have the same legal validity as paper contracts? These questions will be answered in the following article. We hope this article provides the basis for you to apply electronic contracts and their auxiliary tools in your daily business operations while keeping up with the future trend of contracts.
A. WHAT IS AN ELECTRONIC CONTRACT?
An electronic contract is not a new concept under Vietnamese law. The 2005 Law on Electronic Transactions already included provisions on electronic contracts, and the 2019 Labor Code reiterated electronic contracts as a new form of employment contract. The current 2023 Law on Electronic Transactions defines: “An electronic contract is a contract established in the form of a data message”[1]. A data message is understood as “information created, sent, received, and stored by electronic means”[2], with electronic means including “hardware, software, information systems, or other devices operating based on information technology, electrical, electronic, digital, magnetic, wireless transmission, optical, electromagnetic, or other technologies”[3].
Overall, the legal definition refers to various concepts, but in summary, a contract is considered an “electronic contract” when it encompasses the following elements:
(i) The document contains information; and
(ii) The information is created, sent, received, and stored through non-traditional devices and systems such as cyberspace, disks, or cloud computing.
A simple example of an electronic contract is when users visit websites and are often asked to accept or decline the website’s cookies. Cookies are small text files stored on a user’s device when they visit a website, helping these websites remember information and enhance the user's experience online. Another example is under the provisions of Decree 13/2023/ND-CP on Personal Data Protection, where websites that store, analyze, or process personal data of users (data subjects) must obtain explicit consent from the users[4]. This requires users to read and check the consent box for data processing on the website. All these examples represent forms of electronic contracts, with one party being the service provider (website owner) and the other being the user accessing and using the website.
In summary, electronic contracts have been present in daily life and commercial activities in Vietnam for a long time, but they are often overlooked by the parties involved. Users, and even businesses, often view them as a mere notification displayed on computers or phones, taking it for granted and not fully understanding the significant legal value of electronic contracts.
B. USE OF ELECTRONIC SIGNATURES, DIGITAL SIGNATURES, AND ELECTRONIC SIGNATURE CERTIFICATES IN ELECTRONIC CONTRACTS
An overview of electronic contracts indicates that activities related to contracts, from creation and evaluation to storage and transmission, can be fully conducted in an electronic environment without the need for paper and pen. Instead, this is done through means such as electronic signatures, digital signatures, and electronic signature certificates.
The 2023 Law on Electronic Transactions Law:
Electronic signature as a signature created in the form of electronic data that is logically attached or combined with a data message to confirm the signer’s identity and affirm their approval of the data message[5].
Digital signature as an electronic signature that uses asymmetric key algorithms, including a private key and a public key. The private key is used for signing, while the public key is used to verify the digital signature. A digital signature ensures authenticity, integrity, and non-repudiation but does not guarantee the confidentiality of the data message[6].
Electronic signature certificate or digital signature certificate is a data message intended to verify that the certifying authority, organization, or individual is the signer of the electronic signature or digital signature[7].
These three concepts are relatively new to most Vietnamese people, but in reality, they are frequently used by companies, government agencies, and other organizations due to their convenience in signing documents anytime, anywhere, quickly, and allowing contracts to be immediately sent to partners or stored.
To differentiate, an electronic signature refers broadly to all signatures created electronically, whereas a digital signature is a type of electronic signature that focuses more on security and is very difficult to forge. For electronic signature certificates or digital signature certificates, they can be seen as auxiliary components for electronic and digital signatures to record the signer's information and ensure that the signature has been authenticated (signed by the signer) and is secure.
An electronic signature can also be created by a company and used exclusively for the company’s own operations, suited to its functions and tasks, and is often referred to as a special-purpose digital signature[8].
Electronic signatures must meet the following requirements[9]:
(i) Being able to confirm the identity of the signer and assert the signer's approval of the data message;
(ii) The data creating the electronic signature must be uniquely linked to the content of the data message being approved;
(iii) The data creating the electronic signature must be under the control of the signer at the time of signing;
(iv) The validity of the electronic signature must be verifiable according to the conditions agreed upon by the parties involved.
A digital signature, in addition to meeting the above conditions, must also satisfy additional requirements such as[10]:
(i) Any changes to the data message after the time of signing must be detectable;
(ii) It must be guaranteed by a digital signature certificate. In the case of a specialized digital signature used for official purposes, it must be guaranteed by a digital signature certificate from an organization providing specialized digital signature verification services. For public digital signatures, it must be guaranteed by a digital signature certificate from an organization providing public digital signature verification services;
(iii) The means of creating the digital signature must ensure that the data used to create the digital signature is not disclosed, collected, or used for the purpose of forgery; that the data used to create the digital signature can only be used once; and that it does not alter the data to be signed.
In the case that a company wants to use a specialized electronic signature for transactions with organizations, partners, or individuals, or wishes to ensure the security of its specialized electronic signature, it needs to register with the Ministry of Information and Communications to obtain a certification for the secure specialized electronic signature.
In Vietnam, several companies provide services for specialized electronic signatures, digital signatures, and digital certificates, including Misa eSign, VNPT-CA, BKAV, and FPT-CA, which offer favorable pricing aimed at business customers. Foreign electronic signatures and digital certificates, such as DocuSign and Acrobat Sign, can also be recognized in Vietnam if they meet certain conditions and comply with the procedures stipulated by Vietnamese law.
Currently, the website of the National Electronic Authentication Center under the Ministry of Information and Communications offers a function to verify signed documents to assess the validity and legality of the signatures. Information can be accessed at https://neac.gov.vn/vi.
C. CONVERTING BETWEEN TRADITIONAL (PAPER) CONTRACTS AND ELECTRONIC CONTRACTS
If a paper contract is manually signed, stamped, photocopied, uploaded to online platforms, or sent via email, is it considered an electronic contract? The answer is no. The essence of such paper contracts remains that of traditional contracts and does not fall within the definition of electronic contracts. To convert a paper contract into an electronic contract, the following requirements must be met[11]:
(i) The information in the data message must ensure the same integrity as the paper document;
(ii) The information in the data message must be accessible and usable for reference;
(iii) There must be a specific mark indicating that the conversion from paper document to data message has been completed, along with information about the authority, organization, or individual performing the conversion.
Conversely, an electronic contract in the form of a data message can become a traditional contract when the following conditions are met[12]:
(i) The information in the paper document must ensure the same integrity as the data message;
(ii) There must be information to identify the information system and the system administrator that created, sent, received, and stored the original data message for verification;
(iii) There must be a specific mark indicating that the conversion from data message to paper document has been completed, along with information about the authority, organization, or individual performing the conversion.
Thus, the interplay between electronic contracts and traditional contracts demonstrates the flexible application of both types of contracts in practical business scenarios to leverage the advantages of each type in specific contexts, such as the flexibility and speed of electronic contracts and the evidentiary value of traditional contracts.
D. VALIDITY OF ELECTRONIC CONTRACTS, ELECTRONIC SIGNATURES, DIGITAL SIGNATURES, AND ELECTRONIC CERTIFICATES
Data messages in general, and electronic contracts specifically, have the same legal value as traditional documents. The 2023 Law on Electronic Transactions explicitly states: "Information in a data message shall not be denied legal value solely because it is in the form of a data message"[13]. Additionally, this Law outlines several principles for determining the value of data messages:
Data messages have the same value as written documents when the law requires information to be in writing, provided that the message can be accessed and used for reference[14];
Data messages have the value of originals when they ensure integrity from the time they are created as complete data messages (unless there are changes in form arising during the transmission, storage, or display of the message), and they can be accessed and used in complete form[15].
Data messages are valid as evidence in civil transactions, litigation processes, or other circumstances[16].
The regulations regarding the value of electronic signatures and digital signatures are similar to those for electronic contracts when they meet the legal requirements outlined in the previous section. An electronic signature, therefore, has legal validity equivalent to a handwritten signature on a paper document and cannot be denied its value solely because it is in the form of an electronic or digital signature. Electronic certificates require more complex conditions to be effective, such as being signed with a digital signature from the issuing party, being accessible and usable in complete form, and including a timestamp if required by law.
In summary, electronic contracts, electronic signatures, digital signatures, and electronic certificates, if they meet the conditions of the Electronic Transactions Law, have the same legal effect as traditional documents or signatures and can replace traditional forms. This aligns with international commercial practices and legal standards, leveraging the advantages of electronic contracts and related tools. We believe that electronic contracts, electronic signatures, digital signatures, and electronic certificates will become increasingly common in Vietnam with the enforcement of the 2023 Law on Electronic Transactions from 01 July 2024.
If you seek assistance with applying electronic contracts, electronic signatures, digital signatures, electronic certificates in your business operations, or verifying the legal validity of these documents and tools, do not hesitate to reach out to us.
Read this article as a printed matter: Vietnamese | English
Legal basis:
[1] Article 3.16 of 2023 Law on Electronic Transactions
[2] Article 3.16 of 3.4 2023 Law on Electronic Transactions
[3] Article 3.16 of 3.2 2023 Law on Electronic Transactions
[4] Article 11 of Decree 13/2023/ND-CP on Personal Data Protection issued by the Government on 17 April 2023
[5] Điều 3.11 Luật Giao dịch điện tử 2023
[6] Điều 3.12 Luật Giao dịch điện tử 2023
[7] Article 3.13 of 2023 Law on Electronic Transactions
[8] Article 22.1(a) of 2023 Law on Electronic Transactions
[9] Article 22.2 of 2023 Law on Electronic Transactions
[10] Article 22.3(d), (dd), and (e) of 2023 Law on Electronic Transactions
[11] Article 12.1(a), (b), and (c) of 2023 Law on Electronic Transactions
[12] Article 12.2 (a), (b), and (c) of 2023 Law on Electronic Transactions
[13] Điều 8 Luật Giao dịch điện tử 2023
[14] Điều 9 Luật Giao dịch điện tử 2023
[15] Điều 10 Luật Giao dịch điện tử 2023
[16] Điều 11 Luật Giao dịch điện tử 2023
Disclaimer:
This article
reflects the author's subjective viewpoint on the main topic mentioned in this article, providing the best reference value at the time of publishing;
is not considered the viewpoint or opinion of any state agency in any case; and
does not constitute legal advice from Minh Thien Law and should not be applied to resolve any specific legal situation.
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