Electronic signatures offer a practical alternative for closing deals but are they legally binding in Serbia?

Are simple electronic signatures legally binding in Serbia?

As business documents have transitioned into electronic forms, signatures have evolved from ink to electronic representations. Electronic signatures offered a practical alternative for closing the deals and conduct legal transactions in the ever-emerging digitalized business environment during pandemic and in cases where parties are located at different parts of the world. Moreover, it saves loads of paperwork and mailing costs.

The only question that arises, is whether simple electronic signature (“E-signature”) is legally recognized and binding in the respective country of residence of parties signing the legal document.

The digital handshake: nature of simple E-signature

Most digital signature providers speak of simple E-signatures to distinguish those from advanced or qualified E-signatures. They may appear in the form created through the software providers such as Adobe Sign or DocuSign, or may be represented in the form of the picture of the handwritten signature which is inserted into the electronic document.

An E-signature is a digital version of a traditional pen and ink signature and:

  • has minimum requirements for sealing a deal and business transactions,
  • makes no assumption about an enterprise’s or individual security infrastructure and offers simple implementation, since they do not require any type of enrollment,
  • its authenticity depends on trusting the person or process that creates it.

Simple E-signatures are not as legally secure as advanced or qualified signatures, since signing as someone else in the digital world is easy with the right tools.

Serbian law to the great extent harmonized with the EU regulations regarding E-signatures

For simple E-signatures, the European eIDAS Regulation (Electronic Identification, Authentication and Trust Services) from 2016 provides no specific requirements. Consequently, in the EU, simple E-signatures have weak probatory value in the court, and the persons relying on signature bear the burden of proof and shall prove its authenticity. They are commonly used for documents without legal requirement for written form with low liability risk such as orders, offers, NDAs and other contracts or legal acts where no written form is required by the national law.

The Serbian Law on Electronic Document, Electronic Identification and Trust Services in Electronic Business(“Official Gazette of RS”, No. 94/2017 and 52/2021, the “Law”) is utterly harmonized with EU eIDAS regulation and it defines electronic, advanced, and qualified electronic signature similarly as the respective regulation.

The Law defines the E-signature as a set of data in the electronic form that are associated or logically connected with other (signed) data in electronic form so that the integrity of that data and the identity of the signatory are confirmed by an electronic signature.

Like in the eIDAS, the Law does not envisage any conditions for the (simple) E-signature, but it sets out that an electronic signature cannot be challenged as valid or probative merely because it is in electronic form or does not meet the requirements for a qualified electronic signature.

Usage of E-signatures in Serbia?

As the Law follows EU rules, simple e-signatures shall be used in Serbia similar to the EU- to sign contracts and any other legal acts for which no written form is requested (such as lease agreement, any unnamed contracts, internal company resolutions), and any other documents of low liability risk, or where an electronic form is explicitly allowed by the relevant law (resolution on use of annual leave and calculation based on which the remuneration is paid off).

However, for contracts and acts for which no special form is requested, but which are of higher value and significance, being more complex- it is common that they are drafted in the written form and that the parties tend to ensure their higher probative value. In such cases, it is not recommendable to have them signed with simple e-signature and to risk court proceedings bearing the burden of proof pertaining to its authenticity.

One should also know that according to the Law, qualified E-signature equals the handwritten signature, and formally it may be used for signing of all documents for which written form is requested, excluding contracts which need to be notarized (transfer of ownership rights on immovables, inheritance rights contracts etc.). Nevertheless, even signed with this type of E-signature, it is questionable whether certain legal documents which are traditionally in the paper form and where written form is requested, will be deemed valid in front of the court (employment contracts etc.). There exist also a group of documents for which only signing with this type of signature is possible since the government puts special efforts to promote the interaction with the e-administration, and thus to particularly increase efficiency in commercial affairs (financial statements and tax returns for legal entities and similar).

The above designations pertaining to the practice leads to the conclusion that the practice of signing the contracts and other legal documents with any type of E-signatures is underdeveloped in Serbia, so that parties to respective documents shall be cautious with the usage of E-signatures.

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