𝐔𝐬𝐢𝐧𝐠 𝐞𝐥𝐞𝐜𝐭𝐫𝐨𝐧𝐢𝐜 𝐬𝐢𝐠𝐧𝐚𝐭𝐮𝐫𝐞𝐬 𝐢𝐧 𝐂𝐡𝐢𝐧𝐚
To analyze the validity of electronic signatures to execute contracts under Chinese law, we start with the Electronic Signature Law of the People’s Republic of China (the “E-signature Law”). Based on this law, involved parties can agree that electronic signatures in agreements or documents are valid.
With the following exceptions:
1) documents relating to personal relationships like marriage, adoption, inheritance, etc.; or
2) involving suspension of public utilities such as water supply, heating supply, gas supply, etc.; or
3) any other circumstances according to laws and regulations.
So, as long as the contractual parties agree on using and recognizing electronic signatures and the usage is also allowed by law, parties can freely agree to use electronic signatures to conclude contracts.
Additionally, the E-signature Law requires that an electronic signature meets the following criteria:
1) the electronic signature is exclusively owned by the person to whom the signature belongs;
2) the electronic signature is exclusively controlled by the signer at the time of signing;
3) any change to the electronic signature after the signature can be detected; and
4) any change to the content and form of the data message after the signature can be detected.
DocuSign is commonly used software that provides digital signatures to execute documents. However, there are only a few cases publicly known related to the validity of documents signed with DocuSign. There are 2 sales contract disputes in which the local courts recognized the legal validity of the usage of DocuSign. But in a labor dispute case, the local court denied the validity of the DocuSign way, by explaining that “if an electronic signature requires a third-party certification, certification services should be provided by an electronic certification service provider established in accordance with the E-signature Law. As there is no evidence to prove that the company’s electronic signature service provider has obtained the license from Chinese competent authorities, the electronic signature is insufficient regarding the validity.”
To conclude, it is relevant that in the current (legal) practice in China, people are still accustomed to signing contracts and other documents in the traditional way. Also, application documents submitted to governmental administrative departments are also required to be signed with a black ink pen and electronic signatures are not accepted. There are still potential validity risks in using electronic signatures for signing and executing contracts in China. So using the traditional approach of executing contracts and agreements with handwritten signatures and affixing stamps is still safer and therefore more practical than using electronic signatures.
Should this change in the future, then we will let you know! For more information, contact Tanja W. or Iago Camilo (毅格)
