When sending red packets on WeChat or making purchases on Taobao for the first few times, one might have this question in mind or for their friends: is it reliable, sending or receiving money with just a tap on the smartphone or a click of the mouse? They are no magic, just increasingly popular applications of electronic signature, or e-signature, in our daily life in an era of Internet and digital technology. In addition to the e-commerce scenarios above, it is already a common practice to transmit and retain files in electronic formats for business activities.
However, legal instruments which are customarily regarded as more rigorous than e-commerce transactions are still generally forbidden or unnoticed for the application of electronic signature. In practice, when it is required to execute legal instruments officially, people would still print them out and affix their seals or signatures physically as they traditionally do. This would inevitably incur significant time costs for the execution process. Moreover, given the persistent issue of “fake stamps”, this time-consuming traditional approach may not necessarily render a higher reliability.
There are two reasons behind this: firstly, due to lack of applicable laws and regulations on e-signature, judicial practitioners have long been without authoritative rules to rely on and thus tend to not recognize the authenticity of electronic legal instruments; secondly, it is still widely believed by the general public that electronic documents are vulnerable to tampering thus impossible to ensure its authenticity.
The Electronic Signature Law of the People’s Republic of China, released in 2005 and amended in 2015 (“E-signature Law”) provides legal grounds to determine the validity of electronic legal instruments. As computer science and cryptography advance and technologies become more robust to safeguard e-documents from tampering, public perception has gradually changed, hopefully leading to the popularity of electronic legal documents one day.
Based on the E-signature Law, this article provides an overview to e-signature, including its definition, how to create an e-signature, its application and its recognition in judicial practice. We hope our readers may find it useful in the practice related to electronic legal instruments.
What is Electronic Signature?
1.Functions of physical signatures
To understand the concept of e-signatures, it may be helpful to briefly examine the concept, functions and features of physical signatures (including handwritten signatures, thumb prints and affixed seals). By physical signature, it means a kind of marks or the process of leaving such a mark. It serves the purposes of: (1) identifying the signatory; and (2) indicating the signatory’s acceptance of the content of the signed documents. These two functions are based on certain consensuses (or assumptions):
- One handwritten signature or affixed seal corresponds to one unique signatory: this assumes that each individual has his own handwriting and seals and it is impossible to counterfeit seals or forge signatures;
- It is presumed from the signature or seal on hard copies of documents that the signatory has recognized what it is in the documents. This is based on the assumption that a rational person would not sign or affix his seal on a document without reading it first; and
- A document, once signed or sealed, would not be subject to alteration. This is further based on the assumption that it would be technically impossible to alter the content of a document as having been printed out on a hard copy or the signature or seal affixed on these hard copies.
2.Concept of e-signatures
Just like the understanding to physical signatures, electronic signature can also be interpreted two-folded. Firstly, it refers to a type of data. In Article 2, the E-signature Law, by borrowing the functions of physical signatures, defines e-signature from the perspective of its functions and effects as follows: “for the purposes of this Law, electronic signature means the data in electronic form contained in and attached to a data message to be used for identifying the identity of the signatory and for showing that the signatory recognizes what is in the message. The data message as mentioned in this Law means the information generated, dispatched, received or stored by electronic, optical, magnetic or similar means.”
In Article 13, it further sets forth the conditions for a reliable electronic signature, namely “(1) when the creation data of the electronic signature are used for electronic signature, it exclusively belongs to an electronic signatory; (2) when the signature is entered, its creation data are controlled only by the electronic signatory; (3) after the signature is entered, any alteration made to the electronic signature can be detected; and (4) after the signature is entered, any alteration made to the contents and form of a data message can be detected”. It is also expressly provided in Article 14 that “a reliable electronic signature shall have equal legal force with handwritten signature or the seal”.
Secondly, e-signature refers to the process (or method) of producing such data. For example, just as explained in Item (4) of Article 34 that “the creation data of an electronic signature means such data as the characters and codes that are used in the course of the electronic signature and that reliably connects the electronic signature with the electronic signatory”.
It is evident from the above that the E-signature Law in defining e-signature, actually stipulates its forms (i.e. data in electronic form contained in a data message), functions and effects without specifically limiting the approaches or technologies used to implement e-signatures.
Technical Implementation Approaches of E-signatures
As noted above, the existing legislation only sets forth the forms, and the requirements of the functions and effects for e-signatures without specifying the approaches or technologies used to implement e-signatures. Thus in theory, more than one form of data message and e-signatures may be accepted by the law. As long as an e-signature is created in the way as required under the law, it will have equal legal force with a handwritten signature or seal.
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