Vietnam e-transactions law: e-contracts and e-signatures

The Vietnam e-transactions law is Law No. 20/2023/QH15. It took effect on 1 July 2024 and replaced the 2005 law. It says that a contract, a signature or a document does not lose legal force just because it is electronic. But it sets rules on which kinds of e-signature carry full weight, and some common tools are left unclear.

What the new law is

The National Assembly passed the Law on Electronic Transactions on 22 June 2023. It replaced Law No. 51/2005/QH11 when it began on 1 July 2024. It is a framework law. Tilleke describes it as built on the UNCITRAL Model Law on Electronic Commerce, like the 2005 law before it.

The old law left out some areas, such as land use right certificates and marriage registration certificates. The new law removes those exclusions and covers all sectors. It still gives way to other laws. If another law says a deal cannot be done electronically, that other law wins.

Sources: Tilleke & Gibbins, "Significant Aspects of Vietnam's New Law on E-Transactions", 15 December 2023 (tilleke.com); Rajah & Tann Asia, "New Law on Electronic Transactions", 27 October 2023 (vn.rajahtannasia.com).

Data messages: the base layer

A data message is information that is created, sent, received and stored by electronic means. Emails, electronic records and e-contracts all count. The law keeps the 2005 idea that a data message can serve as a written document, as an original and as evidence, if it meets set conditions.

Tilleke notes that the law keeps the 2005 rules on when a data message counts as a written document, as an original copy and as evidence.

The new law also adds rules for converting paper into data messages and back. A converted message must carry a clear mark showing it was converted, and who converted it. Tilleke notes it is unclear whether a plain PDF scan, with no such details, qualifies. The government is to issue guidance.

Sources: Law on E-Transactions 2023, No. 20/2023/QH15, English translation (english.luatvietnam.vn); Tilleke & Gibbins, 15 December 2023 (tilleke.com).

E-contracts

An e-contract is a contract made in the form of a data message. The law keeps the main 2005 rules on e-contracts. It adds a new rule in Article 34 for contracts made through automatic information systems. Such a contract cannot be denied legal force only because no person checked each automatic action.

Article 34 also lets ministers set their own rules on e-contracts for their fields. So the rules for, say, banking may differ from the rules in another sector. The parties may also agree between themselves on technical needs, such as how to keep the contract intact and private.

Sources: Law on E-Transactions 2023, No. 20/2023/QH15, Article 34 (english.luatvietnam.vn); Tilleke & Gibbins, 15 December 2023 (tilleke.com).

E-signatures and digital signatures

Article 23 says an e-signature cannot be denied legal force only because it is electronic. A secure specialized e-signature, or a digital signature, of a person has the same force as that person's signature on paper. For an organization, such a signature can also meet a rule that a document must be certified by that organization.

The law groups e-signatures by use. There are three types:

• Specialized e-signatures, made and used by agencies and organizations for their own tasks.
• Public digital signatures, used in public activities and backed by a public certificate.
• Specialized digital signatures for official use, used in official work.

A digital signature is a type of e-signature that uses a private key and a public key. It is generally seen as more secure than other forms. A secure specialized e-signature needs a safety certificate from the Ministry of Information and Communications.

Sources: Law on E-Transactions 2023, Article 23 (english.luatvietnam.vn); Tilleke & Gibbins, 15 December 2023 (tilleke.com); Rajah & Tann Asia, 27 October 2023 (vn.rajahtannasia.com).

Open questions for businesses

Two law firms point to gray areas. Rajah & Tann writes that the law seems unlikely to treat common tools as e-signatures. Its examples are images of handwritten signatures, one-time passwords and text messages. Tilleke adds that Article 22.4 sends such confirmation methods to other relevant laws. It also says the law is not clear on whether an individual may use a self-made e-signature, and that individuals may be pushed toward a public digital signature.

That matters for firms that sign deals by clicking a button or by a code sent to a phone. Under the law, a method that is not a recognized e-signature is not rejected outright. It must follow the rules of the law that covers that sector. Check those rules before relying on it.

Sources: Rajah & Tann Asia, 27 October 2023 (vn.rajahtannasia.com); Tilleke & Gibbins, 15 December 2023 (tilleke.com).

Notarization and foreign signatures

Where another law requires notarization, Article 9 says a data message meets the rule if it is notarized under the notarization law. Tilleke reads this to mean that deals such as house sales could be notarized electronically, unless the notarization law bars it.

For cross-border deals, Article 26 sets conditions for recognizing foreign e-signatures and certificates. They must meet Vietnamese standards, recognized international standards or a treaty Vietnam has joined. A foreign certification provider must meet conditions that include having a representative office in Vietnam. The Minister of Information and Communications is to give further guidance.

Sources: Law on E-Transactions 2023, Articles 9 and 26 (english.luatvietnam.vn); Tilleke & Gibbins, 15 December 2023 (tilleke.com).

A short checklist

• List which contracts you sign electronically and which sector law covers each.
• Check what kind of e-signature each tool uses.
• Ask your lawyer whether scans, codes and click-to-accept are enough for your sector.
• Watch for government guidance on converted documents and foreign signatures.

This article is general information, not legal advice. Sources: Law on E-Transactions 2023, No. 20/2023/QH15 (english.luatvietnam.vn); Tilleke & Gibbins (tilleke.com); Rajah & Tann Asia (vn.rajahtannasia.com).