Electronic contracts and digital signatures: Security and legal validity

Electronic contracts and digital signatures are important solutions in developing the digital economy in Vietnam. With the increasingly perfect legal corridor, electronic contracts and digital signatures will become more and more popular in the future. To apply successfully, businesses need to clearly understand legal regulations and update the latest information in this field.

1. Definition of digital signatures and electronic contracts

1.1. Definition of digital signature

“ Digital signature” is a form of electronic signature created by transforming a data message using an asymmetric cryptographic system, whereby the person who obtains the original data message and the public key of the signer can be accurately determined:

• The above transformation is created using the exact private key corresponding to the public key in the same key pair;
• Ensure the integrity of the content of the data message since the above transformation is made.

1.2. Definition of electronic contract

An electronic contract is a contract expressed online, without the need to use documents or paper. According to Article 3 of the 2015 Law on Electronic Transactions, electronic contracts are expressed in the form of data messages, defined as information created, received, and sent by electronic means.

2. New changes in the Electronic Transaction Law 2023

2.1. Additional regulations on conditions for converting forms between paper documents and data messages

Paper documents converted from data messages must meet the following requirements:

• Information in paper documents is guaranteed to be as complete as data messages;
• Have information to identify the information system and information system owner that creates, sends, receives, and stores original data messages for lookup;
• There is a separate symbol confirming that the data message has been converted to a paper document and information of the agency, organization or individual performing the conversion;
• In case the data message is an electronic certificate, the conversion must meet the 3 requirements above and must have the signature and seal (if any) of the agency or organization performing the conversion according to the provisions of law. . The information system serving conversion must have the ability to convert data messages to paper documents.

2.2 Supplementing regulations on reliable services in electronic transactions

• Reliable services include;
• Timestamp issuance service;
• Data message authentication service;
• Public digital signature authentication service.
• Reliable service is a conditional business investment industry.
• Organizations providing reliable services must have a service business license issued by the Ministry of Information and Communications, except for electronic contract authentication services in commerce. Organizations have the right to register for one or more of the above services. The term of the trust service business license is 10 years.
• Organizations providing electronic contract authentication services in commerce must meet the conditions for providing electronic contract authentication services according to the provisions of law on e-commerce and service business conditions. trustworthy according to the provisions of Article 29 of the Law on Electronic Transactions 2023.

3. Legal framework for electronic contracts in Vietnam  

- Law on Electronic Transactions No. 51/2005/QH11: The legal value of an electronic contract cannot be denied just because the contract is expressed in the form of a data message.

- Decree 52/2013/ND-CP Regarding e-commerce: Electronic documents in commercial transactions have the same legal value as the original if they meet both of the following conditions:

• There is a sufficiently reliable guarantee about the integrity of information contained in electronic documents from the time the information is first created as an electronic document.
• Information contained in electronic documents can be accessed and used in complete form when necessary

- Decree 85 amends and supplements & Decree 52/2013/ND-CP Regarding e-commerce:

• Clearly define the process and officially license registration with organizations providing electronic contract authentication services (CeCA). "There is a project to provide electronic contract certificate services appraised by the Ministry of Industry and Trade" (section b, clause 1, article 63- Decree 85/2021/ND-CP)
• Electronic contract authentication organizations "are responsible for the security and integrity of the electronic documents they store and authenticate (section a, clause 2, article 63- Decree 85/2021/ND- CP).
• The electronic contract has the digital signatures of the signing parties and authentic digital signatures of CeCA and the Electronic Contract Development Axis system of the Ministry of Industry and Trade.
• Electronic contracts certified by the Ministry of Industry and Trade are the basis for implementing support solutions, resolving complaints, and resolving disputes with third parties.

- Circular No. 01/2022/TT-BCT dated January 18, 2022 amending: Regulations and guidelines for regulations on providing electronic contract authentication services; form of publishing a list of traders and organizations providing electronic contract authentication services in Vietnam

• Launching the National Electronic Contract Development Axis: On June 16, 2022, the Department of E-Commerce and Digital Economy officially launched the National Electronic Contract Development Axis

- Decree No. 48/2024/ND-CP: additional regulations on electronic receipt methods and use of electronic identification accounts to authenticate information

4. Safe electronic contracts in Vietnam

4.1. Concept of secure electronic contracts

Secure electronic contracts:

• Has digital signature of CeCA & Axis confirmation
• Can look up and authenticate contract information by a third party (LTV)
• Verify the identity of the subject signing or entering into the contract
• Has the "Green Tick" identification
• Manage the signing process (Audit Trail) and ensure authentication when disputes arise
• Ensure the ability to look up and authenticate documents according to legal regulations (from 5 - 10 years to permanent storage)
• Ensuring data and contract content security (Applying Hash mechanism to authenticate content without storing contract content)
• Ensure the ability to develop and cross-sign between CeCAs
• Ensure other elements of network information security level 3 or higher.

4.2. Electronic contract application

Solutions for signing contracts and concluding contracts with individuals can include:

• Sign a contract using a personal digital signature combined with eKYC (Remote Signing)
• Sign the contract using eKYC of the Ministry of Public Security and Smart-OTP
• Sign a contract using App Tokenization
• Conclusion of contracts in e-commerce
• Convert electronic contracts into secure paper copies
• Deploying electronic contract applications in sample contract types
• Sign cross-border electronic contracts

5. 1C:Document Management - Digital Office solution supporting businesses in applying digital signatures and legal electronic contracts

Office Solution No. 1C: Document Management opens up a new direction for digital transformation for businesses, helping businesses confidently apply electronic contracts and digital signatures legally and safely, bringing the most optimal results:

• Centrally store all documents, records, and contracts in structured and unstructured forms, with unlimited capacity
• Integrating digital signatures, leaders can sign digitally directly on the mobile application without needing to be in the office
• Project management, planning and implementation of new business plans such as: product launch plan, market entry plan, business growth plan, etc.
• Control the project execution process, process each stage, automatically notify project reminders, which tasks are delayed or overdue.
• Export multi-dimensional, intuitive real-time reports according to management analysis needs.

In general, electronic contracts are not a new concept and have been widely applied in Vietnam. However, to use electronic contracts and digital signatures safely and effectively, businesses need to be equipped with enough knowledge and quickly update relevant information. Currently, 1C:Document Management's digital office solution has integrated with electronic invoice providers to help improve work efficiency, ensure legality and security of business information. Follow 1C Vietnam's next articles to update the latest knowledge about digital signatures and electronic contracts!