Electronic contracting and communication

Do you need to conclude a distance contract or communicate with offices without physical presence? If the epidemic shifts your activities into the digital environment, you will find answers on questions following on your life situation in this document.

In what ways can distance contracts be concluded?


In Czech law, there is a principle of informality of legal acts, which means that everyone can choose their preferable form of legal acts unless it is prescribed by law (as is the case with real estate transfers or apartment rentals) or by prior agreement of the parties. It is thus possible to validly conclude most contracts orally (by phone). Nevertheless, due to better provability, the parties often prefer written form.

Legal acts in written form can be validly performed by electronic means as well, and any data associated with the content and used by the acting party may be used as a signature. This can include, for example, simply writing one’s last name at the end of an email, checking off a box in the online environment or sending a scan of one’s signature. However, none of these methods can be generally recommended for more important contracts, since, in practice, it is almost impossible to prove who actually performed such action and whether the integrity of the document remained intact, i.e. that the document was not subsequently modified in any way. For less important contracts, this legal risk can be mitigated by appropriate business transaction setup (e.g. advance payments or continuous payments).

For better provability, guaranteed, recognised and qualified signatures are recommended, as well as concluding a contract through data boxes.

Services offering guaranteed signatures are commercially available. To obtain a recognised or qualified signature, it is necessary to acquire signature certificates with limited time validity. This process includes (usually physical) verification of the applicant’s identity. A qualified signature is consequently legally equivalent to a handwritten signature.


How to communicate electronically with authorities or courts?


In case you need to communicate electronically with state authorities, local administrations or courts, use primarily a combination of email and, at least, a recognised electronic signature; you can also make a submission through a data box.

You can also make a submission to a court through a web application of the Ministry of Justice called ePodatelna; alternatively, it is possible to fill in the relevant electronic form (e.g. proposals for public registers, proposals for issuing an electronic payment order, selected submissions for insolvency proceedings).


How to use use a data box for communication between private subjects?


The data box allows private subjects to communicate with each other by means of so called Postal Data Messages (”PDZ”). Sending a PDZ corresponds to sending a registered letter, while, at the same time, not only is the identity of the sender securely verified, but so is the content of such a message. As opposed to communication with public authorities, no fiction of delivery can arise and the message is sent the moment the addressee logs in the data box.

To use the PDZ you first and foremost need to set up a data box. Then it is necessary to allow the reception of the PDZ in the data box in the section Settings > Credit and additional services > Reception of Postal Data Messages. The addressee, in order to receive the PDZ, also needs to allow reception of such messages in the abovementioned way. Since many entrepreneurs currently do not have the reception of postal data messages activated, it is a major hindrance in the advancement of concluding contracts via data boxes. However, there is nothing to keep the parties from agreeing on mutual activation beforehand.

Although the reception of the PDZs is free, you are usually charged for sending them. Nevertheless, the Ministry of the Interior declared in March that from 24 March the PDZ service would temporarily be provided free of charge until further notice.

When it comes to data boxes, it is also necessary to keep in mind that the data box by default does not serve as a means to save received documents and that all received messages are automatically deleted 90 days after delivery. It is thus highly advisable to activate the paid service, so-called data storage vault thanks to which all the messages will be saved in the data box longer.


What should I do if I receive a contract signed by a qualified electronic signature?


If your business partner sends you an electronically signed contract, it is necessary to take the following steps. First of all, we can verify if the signature is a qualified electronic signature or a signature of lower level. Standard computer programs (e.g. for reading PDF) enable you to view the signature’s details, including whether the signature is based on a qualified certificate, whether it is a certificate for electronic signatures and if the private key is placed in a qualified electronic signature creation device. If this information is stated in the contract, the contract is signed in the most trustworthy manner possible. There is no need to print such contract or ask for a handwritten signature. If it is a long-term contract, usually for several years, it is necessary to keep in mind the diminishing possibility to authenticate the signature’s validity in time because of the limited duration of the signature certificate. If you are interested in archiving the contract, it is recommended to attach to the document the so-called qualified electronic time stamp before the certificate expires in order to ensure the integrity of the document in case of a possible dispute concerning the contents of the contract. The procedure always needs to be repeated before the expiration of the validity of the stamp certificate.


What about electronically signed documents from abroad?


Presently, electronic signatures are mostly unified across the European Union in accordance with the eIDAS Regulation. Qualified electronic signature from one Member State is, according to eIDAS Regulation, explicitly recognised as a qualified electronic signature in the rest of the EU states. However, even lower forms of electronic signatures of one Member State do, as a rule, qualify as the respective form in other states since the same rules are applied to them.


Is it permitted to sign employment documents electronically?


It is formally possible to sign employment documents electronically, but the Labour Code imposes other conditions that can present an important hindrance in extending electronic contracting to employment relations. What is worth mentioning are the relatively strict rules for electronic delivering, according to which the employee must explicitly consent in writing to this approach. The document must be signed by a recognised electronic signature and the employee is obligated to confirm the receipt within three dates by data message signed by his or her recognised electronic signature.


What documents cannot be signed electronically?


Presently, it is not possible to sign documents for which an officially verified signature is required or which necessitate a form of notarial act. It is thus not possible to sign for instance certain acts regarding foundation, changes or dissolution of corporations, alterations of property or alimony for the period after a divorce or a request for opening a data box and establishing a qualified electronic signature.

Furthermore, it is not permitted to sign electronically documents that need to have a physical form or are legal instruments by nature, especially securities such as bills of exchange or cheques.

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