In the era of information technology development, the methods of entering into contracts are also gradually being innovated from ordinary paper contracts to electronic contracts (“E-contracts”) because of its ability to save time, costs, efficient connectivity, and fast data exchange, especially during the epidemic when meeting face-to-face with partners is not something easy as “a piece of cake”.

E-contracts are considered the “savior”, allowing enterprises to enter into contracts remotely during the lockdown. To be able to make the most of this tool, enterprises need to understand and grasp the legal framework for signing and performing E-contracts through the provisions of current laws.

E-contracts under the current law

E-contracts have the same validity as traditional contracts. According to Articles 33 and 34 of the Law on Electronic Transactions 2005, “An E-contract is a contract established in the form of a data message. The legal validity of an E-contract cannot be denied simply because it is represented as a data message.” Some features of an E-contract that are different from a regular contract are:

  • Represented by electronic data message. Accordingly, an E-contract is entered into by a data message. The offer to enter into, accept to conclude, receive, and send the contract are all done in the form of data messages.
    The Law on Electronic Transactions stipulates factors related to data messages, including the concept of the originator, recipient of data messages, time and place of sending and receiving data messages, etc. In the performance of a contract, notices in the form of data messages have the same legal validity as those by traditional methods, creating a new method that is much more modern, fast, and cost-effective than traditional contracts.
  • There shall be at least 3 parties entering into the contract. In which, besides the buyer and the seller, there are also network service providers and electronic signature certification agencies;
  • The scope of application is limited in the civil, business, commercial and other fields prescribed by law to be able to use E-contracts.

Principles of entering into electronic contracts

The Law on Electronic Transactions set out three principles for entering into an E-contract: (i) the parties may agree to choose an electronic medium for the contract, (ii) the E-contract must comply with the Law on Electronic Transactions and other regulations applicable to traditional contracts, and (iii) the parties may agree on requirements of technical and notary, certification and other conditions to ensure the integrity and confidentiality of the contract.

Therefore, the law has allowed the parties to negotiate flexibly and freely on many different factors when entering into an E-contract, helping to satisfy the diverse needs of many types of contracts. However, even though it is free to enter into an E-contract, it must not be contrary to social regulations and ethics. Enterprises should also note that, when entering into an E-contract, it must also ensure the same conditions as a traditional contract in terms of content, form or registration procedures related to government authority (if applicable). For example, an electronic labor contract must contain mandatory contents according to labor laws such as contract duration, working, resting time, etc.