VALIDITY OF ELECTRONIC SIGNATURES: THAI BUSINESS LAW
The electronic signature (“e-signature”) of contracts in Thailand is regulated by the Electronic Transactions Act B.E. 2544 (“ETA”). The law represents a significant facilitation of business transactions in Thailand. Even foreigners can use the e-signature to process their contractual agreements with Thai companies. However, this does not apply to every contract, so you should always exercise caution when using electronic signatures.
Have you ever thought about signing a contract without holding the documents in your hand? Sanet Legal & Accountancy the Thai, English and German speaking lawyers in Thailand, will clarify whether and how this is permissible and when such contracts are legally binding.
The use of an electronic signature (“e-signature”) is regulated in Thailand under the Electronic Transactions Act B.E. 2544 (“ETA”). In principle, an electronic signature is permissible. It facilitates business transactions in Thailand. Mainly, the e-signature facilitates the conclusion of contracts. However, caution is advised: the electronic signature is subject to particular requirements and cannot be used for each and every transaction.
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- Excluded Transactions
Not all contracts and agreements can be signed electronically with legal validity. According to the Royal Decree regulating electronic transactions in civil and commercial law, legal transactions in family and inheritance law are barred from the e-signature options of the Electronic Transactions Act B.E. 2544 (“ETA”) .
The same applies to transactions that require the written form and/or must be registered with a state authority. These include, in particular, land purchase or sale contracts and the transfer of land ownership.
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- Formal Requirement
An electronic signature is defined in the ETA as “letters, characters, numbers, sounds or other symbols”. It must be created electronically and be suitable for establishing a link between a person and a data message.
This implies that the electronic signature must identify the signatory and clearly indicate his or her consent with the content of the document. The legal definition allows for various methods. These include a pen drawing or an e-mail signature and similar. If, for example, a handwritten signature is converted into an electronic form, e.g. scanned and placed under a document, this is also recognized as an electronic signature.
To summarize, it can be stated at this point that an electronic signature is legally valid if its creation method fulfils the following two criteria of the “ETA”
a) Firstly, the method used must be able to identify the signatory and clearly express that the signatory confirms the content of the electronic document with it.
b) Secondly, the electronic signature must be created using a reliable method that can verify the signatory’s intent.
Both are basic requirements for any digital signature.
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- Legal transactions with a foreign country
Thai law in the form of the “ETA” expressly confirms that an electronic signature created or used outside Thailand is also legally valid.
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- The electronic company seal
Company rules on authority to sign often require the signature of one or more Directors using the company seal. In these cases, an electronic seal (e-seal) must be used in addition to the digital signature in order to make an agreement binding for the company. The e-seal is required in these cases, for example, for the conclusion of employment contracts, commercial contracts, purchase contracts, service contracts, loan and guarantee agreements as well as for the submission of confidentiality agreements.
In summary, it may be said that electronic signatures are a great convenience in the digital age. Thailand thus demonstrates that Business Law in Thailand is in line with international standards.
However, there are regulations and exclusions for the use of digital signatures.
If you are unsure whether contracts or agreements you wish to enter into are legally enforceable, Sanet Legal & Accountancy, the German-speaking law firm in Thailand, can help you!
Book your free initial consultation here.