A recent survey on the difficulties/ obstacles preventing enterprises in Vietnam from applying e-contracts for their business, in a webinar dated September 18, 2021 shows that 303/500 participants said that they were concerned about the legal validity of the e-contract, followed by concern over the form of signing and executing the e-contract as it is not quite familiar with them. Confidentiality is also another issue causing the enterprises in Vietnam to be reluctant to apply the e-contract for their business activities.
In fact, the legal framework for contract in general and the e-contract in particular is quite comprehensive and synchronous. Specifically, Vietnam promulgated the Law on Electronic Transactions No. 51/2005/QH11, dated November 29, 2005 (“Law on Electronic Transactions 2005”) based on inheriting most of the provisions under the Model Law of UNCITRAL (United Nations Commission on International Trade Law) on e-commerce in 1996. On that basis, the Government of Vietnam have issued guiding legal documents, notably the Decree No. 130/2018/ND-CP detailing the implementation of the Law on Electronic Transactions 2005 on digital signatures and digital signature authentication services and Decree No. 52/2013/ND-CP on e-commerce. Legal documents guiding the Law on Electronic Transactions 2005 in specialized fields such as accounting, finance, banking, and insurance have also been promulgated, which accordingly create synchronization and ensure the legal validity of the e-contract as well as the safety and integrity of the data messages contained in the e-contract.
Notably, the validity of the contract in general and the e-contract in particular relies on the criteria as prescribed in the Civil Code 2015, including: parties in the transaction must have legal personality or legal capacity in conformity with such transaction; parties in the transaction must act voluntarily; the purpose and contents of the transaction are not contrary to the law and/or social ethics; and the form of the contract must be in accordance with the provisions of the law, without relying entirely on how the contract is entered into. In other words, the engagement of the contract under the form of a written, oral, or electronic means is not a decisive factor affecting the legal validity of such contract in general, and the e-contract in particular.
In addition, many enterprises have been concerned over the form of signing and executing the e-contract as it is not so familiar with them. However, electronic transactions occur every minue, everyday in our daily life. Transactions on e-commerce platforms such as Lazada, Shopee, Tiki, eBay…or booking a car via the Grab platform… are typical examples of electronic transactions, which are so popular for most people.
Confidentiality is another concern for the enterprises to apply the e-contract for their business activities when information of the electronic transactions is not only stored on the enterprise’s own system but also be backed up on the system of the digital signature authentication service provider for maintenance and technical troubleshooting when the enterprise’s electronic database is crashing or being interfered by any third party. The current law does not clearly stipulate the obligations of the digital signature authentication service provider to secure the confidentiality, hence, the enterprises should be aware of this matter, and must include, in the service contract, confidentiality obligation of the digital signature authentication service provider.
Also, a question that many enterprises raises is how to prove the legal validity of the e-contract as the original version when dealing with a third party such as the Bank, or with state authorities such as Tax authorities, or the Courts…. In practice, Article 9 of the Decree 52/2013 provides legal basics for this matter, i.e., legal validity as the original of the e-documents (including the e-contract). Accordingly, an e-document in a commercial transaction has legal validity as the original if it fully meets the following conditions: (i) there is a reliable assurance of the integrity of information contained in the e-document from the time the information is first generated in the form of the e-document; and (ii) information contained in the e-document is accessible and usable in complete form when necessary. In which, the criterion for assessing the integrity is that the information is complete and unaltered, apart from changes in the form arising in the process of communicating, storing or displaying the e-document. One of the criteria for reliability assurance is when the electronic document is signed with the digital signature granted by a licensed digital signature authentication service provider.
Thus, when (i) the e-contract is signed with a digital signature granted by a licensed digital signature authentication service provider; (ii) information contained in the e-contract is accessible and usable in complete form when necessary and (iii) the information in the e-contract is intact, then the e-contract shall have legal validity as the original. In reality, it is not difficult for the enterprises to prove these 3 factors to the third parties such as Tax authorities, or the Courts… However, whether it is accepted by the third parties remains a question.
The Decree amending the Decree 52/2013 (“Amended Decree 52“), expected to be officially issued in the upcoming time, will stipulate the regulations on authenticating the e-contract by a service provider which is licensed by the Ministry of Industry and Trade, named CeCA – Certified E-contracts Authority. It means that when the Amended Decree 52 comes into forces, in addition to digital signature authentication services provider, there will be one more service provider providing authentication services to the e-contract, probably for the purpose of verifying that such e-contract has the content integrity and the process of verifying the content of the e-contract from time to time, without depending on the changes of technology and technicality.
The Amended Decree 52 is expected to complete the legal framework for the e-contract and address concerns of the enterprises when applying the e-contract for their business activities. However, there remains a question on the need to have another authentification services provider for the e-contract (licensed by the Ministry of Industry and Trade), besides the digital signature authentication services provider (licensed by the Ministry of Information and Communications), in the circumstance that Vietnam is under an administrative reform. In addition, this also incurs the costs for the enterprises when they must pay for both services, just to make sure that the e-Contract is reliable. Let’s wait and see how the Amended Decree 52 answers the above question.