Electronic signature law in commercial contracts in China

The People’s Republic of China excludes, solely for the purpose of this guide, the Special Administrative Region of Hong Kong, the Special Administrative Region of Macau and Taiwan.

According to the PRC General Rules of Civil Law, a civil legal act may be in written, oral or other forms. It shall be in a specific form if this is so stipulated by laws, administrative regulations or agreed by the parties.

Furthermore, according to the PRC Contract Law, “written from” refers to any form that can show the described content in a visible way, such as written contracts, letters, electronic data (including telegram, telefax, facsimile, electronic data exchange and e-mails). A contract may be concluded in writing, oral or other forms (e.g. by implied conduct). However, it must be concluded in written form if so stipulated by laws or administrative regulations, or if agreed between the contractual parties.  

According to the Interpretation of the PRC Supreme People’s Court to the Contract Law (II), if the parties want to conclude a contract in writing, they shall sign or stamp on the contract. If a party signs the contract by fingerprint, the People’s Court shall acknowledge its legal effect, which is the same as that of a signature or stamp. Under common PRC business practice, a contract concluded between Chinese companies is usually  attached with the company seal of each of the parties. According to PRC law, the company seal has the same effectiveness as the signature of the legal representative of a company.

According to the PRC Electronic Signature Law, the parties may agree to use or not to use electronic signatures or electronic data in contracts or other documents in civil activities. The legal effect of documents, for which the parties have agreed to use electronic signatures or electronic data, shall not be denied merely because the document is made by using such electronic signatures or electronic data with the following exceptional cases:

  • Documents concerning personal relations such as marriage, adoption, succession, etc.; and
  • Documents concerning termination of water supplies, heat supplies, gas supplies or other public utility services.
  • Loan agreements (unless the loan is between natural persons who have agreed not to conclude a written agreement);
  • Lease agreements with a term for more than six months (the lease term shall be deemed indefinite, if the agreement is not concluded in writing);
  • Financing leasing agreements;
  • Construction project / supervision agreements;
  • Technology development / transfer agreements;
  • Consent of a registered real estate right holder to correction of a relevant item in the real estate register;
  • Agreements on grant / transfer / exchange / contribution / bestowal / mortgage of construction land use rights;
  • Consent of a security provider to a creditor’s approval for a debtor to transfer its debts (the security provider does not need to assume the security liability any longer, if the creditor’s approval is made without written consent); and
  • Mortgage agreements, pledge agreements (including pledges of movable assets and of most  pledgeable rights).

Yes, for example:

The PRC Provisions on Archiving Scope and Storage Period of Enterprises’ Documents and Materials require that enterprises shall archive the metadata of the related electronic documents, which are subject to statutory archiving. Electronic documents subject to statutory archiving are those that are without corresponding paper documents or cannot be made into paper, and the contents of which are of value for all activities of the enterprise, national construction, social development, historical research and for maintaining the rights and interests of the State, the enterprise and its employees. Such documents include:

  • Documents and materials issued by the relevant authorities, which are required to be implemented by the enterprise;
  • Documents and materials sent from non-affiliated entities, which require the enterprise to implement or examine;
  • Important documents and materials submitted by the enterprise's controlled and affiliated enterprises; and
  • Other documents and materials of important reference value.

The PRC Electronic Signature Law requires electronic data to be stored in a way that:

  • They are capable of effectively showing the contents they carry, and are capable of being accessed for reference and use at any time;
  • The format of the electronic data is the same as the format in which they were created, sent or received, or the format is different, but accurately reflects the contents originally created, sent or received; and
  • The sender, recipient, time of sending and receipt of the electronic data can be identified.

The PRC Cyber Security Law requires that network operators shall preserve relevant web logs for no less than six months and adopt measures for classification, back-up and encryption of important data. Network operators shall also adopt necessary measures to secure the safety of personal information they have collected and shall handle personal information they have saved according to law and agreement with users of the network. Network operators are owners and administrators of a network and network service providers, (i.e. basically any entity operating a server). Similar provisions also apply for stored employee data, which can be found in the PRC Law on Protection of Consumers.

4. Main and relevant court practices

  • The PRC Supreme People’s Court requires in its Interpretation on Applicable Legal Issues Regarding Trial of Sales Contract Disputes that the People’s Courts shall apply the PRC Contract Law, and concurrently also the PRC Electronic Signature Law when judging the establishment and validity of electronic contracts. Following this, a local People’s Court upheld the legal effect of a purchase order concluded by the parties via emails in an appeal judgement.
  • The PRC Supreme People’s Court requires in its Provisions on Several Issues Regarding Trial by Internet Courts that an Internet Court shall confirm the authenticity of electronic data submitted by the parties if the authenticity can be proved through electronic signatures, reliable timestamps, hash verification, blockchain and other means of evidence collection, fixing and tamper-proofing or through the authentication of the electronic forensics and evidence storage platform.

5. In which cases are documents only with wet ink signatures accepted?

Such cases normally do not exist in private commercial life, but only when dealing with PRC governmental authorities. They usually require that application documents submitted to them should be personally signed by the signatories with a black or blue-black wet ink pen instead of other pens, such as a ballpoint pen.

6. List of the relevant national legislation

  • PRC General Rules of Civil Law
  • PRC Contract Law
  • PRC Property Right Law
  • PRC Electronic Signature Law
  • PRC Cyber Security Law
  • PRC Provisions on Archiving Scope and Storage Period of Enterprises’ Documents and Materials
  • PRC Relevant interpretation and provisions of the PRC Supreme People’s Court

The following answers apply for usual cases. However, exceptional or specific agreements for the relevant parties are possible and should always be taken into account.

Also to be noted:

  • As a general principle and more importantly, whether or not a certain written document or statement is or can be deemed “legal” requires an individual review of the facts of each individual case.  
  • The PRC business practice usually prefers or requires a company to at least use its company seal to sign contracts or issue legal documents instead of or in addition to signatures of the company’s representatives.

1. Electronic document signed with qualified electronic signature (QES as defined in the eIDAS Regulation) and with a time stamp

(A QES is defined in the eIDAS Regulation as: an advanced electronic signature that is created by a qualified electronic signature creation device, and which is based on a qualified certificate for electronic signatures.) Yes. However, under PRC law a (common) electronic signature does not need to be certified in order to become effective. 

2. Electronic document signed with qualified electronic signature (QES as defined in the eIDAS Regulation) without a time stamp

Yes. A timestamp is generally not a prerequisite of the written form of a legal document under PRC law. However, timestamps, in particular reliable timestamps are often acknowledged in the PRC court practice as a certification method to enhance the legal effect of electronic evidence.

3. Electronic document signed with advanced electronic signature (AdES as defined in the eIDAS Regulation) and with a time stamp

An AdES is defined in the eIDAS Regulation as: an electronic signature that is (a) uniquely linked to the signatory; (b) is capable of identifying the signatory; (c) is created using electronic signature creation data that the signatory can, with a high level of confidence, use under his sole control; and (d) is linked to the data signed therewith in such a way that any subsequent change in the data is detectable.)
Yes. The PRC Electronic Signature Law contains a term of “reliable electronic signature”, which has a similar definition to an AdES. A reliable electronic signature has the same legal effect as a handwritten signature or a seal.
 

4. Electronic document signed with advanced electronic signature (AdES as defined in the eIDAS Regulation) without a time stamp

Yes

5. Electronic document signed with advanced biometric signature

Yes. A biometric signature is not (yet) explicitly stipulated in  PRC law. As  it appears to be an advanced form of a common electronic signature, we understand that it is likely to have the same effect as a common electronic signature.

6. Electronic document signed with a simple, standard electronic signature (SES)

Yes

7. Scanned electronic version of the original paper-based document with handwritten signature sent as an attachment in ordinary e-mail without an electronic signature, but with standard e-mail signature panel

Yes. However, for potential evidentiary purposes, it is recommended to ask for the original paper-based document with a handwritten signature. 

8. Legal statement sent as a text of an ordinary e-mail without an electronic signature, but with a standard e-mail signature panel

Yes

9. Legal statement sent in an SMS

Yes

10. Electronic document with a copy-pasted image of a handwritten signature, sent as an attachment of an ordinary e-mail

The legal effect is doubtful because a copy-pasted image of a handwritten signature is easily manipulated, in particular if the e-mail sender is not the signatory. Therefore, it is not recommended to do this. 

11. Electronic document with the typed name of the signer and sent as an e-mail attachment

The legal effect is doubtful for the same reason as above.

12. Electronic legal statement sent in a social-media message sending application (e.g. Messenger, Viber, LinkedIn, Facebook message, etc.)

Generally yes, but whether the sender wants to be legally bound by a statement given on social media may need to be checked in individual cases.

13. Electronic legal statement sent in a chat application

Yes

14. Electronic document created on an electronic platform ensured by the other party requesting the legal statement (without an electronic signature) by another party whom the operator of the platform granted access 

Yes

15. Electronic document signed in DocuSign/Adobe Sign with a simple standard electronic signature (no QES or AdES)

Yes

16. Electronic document signed with a qualified electronic seal as defined in the eIDAS Regulation

(A qualified electronic seal is defined in the eIDAS Regulation as: an advanced electronic seal, which is created by a qualified electronic seal creation device, and that is based on a qualified certificate for electronic seals).
Yes. However, before an electronic seal is used, it is recommended to check whether there has been a respective local regulation promulgated explicitly confirming the legal effect of electronic seals. So far, we have not yet seen a national law in this regard, but only some local provisions in certain cities like Shanghai and Beijing. In case of doubt, it is recommended not to use electronic seals. 
 

17. Agreements accepted by the other party online, by ticking a checkbox or by clicking on a button ("click on agreements")

Yes. A typical example is purchase on an online shopping platform.
Portrait ofUlrike Glueck
Dr. Ulrike Glueck
Managing Partner
Shanghai
Nick Beckett