The Municipal Court in Prague issued a judgment under Case No. 54 Co 217/2024-259 in which it dealt with the problem of acceptability of electronic signatures for legal actions in written form (“Judgment“). Not only did it agree with the court of first instance in the case of the purchase of real estate, but, above all, in its reasoning, it confirmed the validity of simple electronic signatures for legal actions in written form.
This is a crucial decision, the precise reasoning of which brings a welcomed modernisation of the possibilities of concluding a legal action. In this article, we will discuss the key points of the judgment’s reasoning, its contribution to the current regulation of concluding a legal action and its practical impact, particularly in the field of HR.
Generally on electronic signatures
The issue of electronic signatures is regulated by several legal regulations, but the basis is the provision of Section 561(1) of Act No. 89/2012 Coll., the Civil Code, as amended (“CC“), which introduced the possibility of electronic signing, with the addition that another legal regulation determines how a document can be electronically signed.[1] This other legislation is Regulation (EU) No. 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC, commonly known as eIDAS (“eIDAS“). This European Regulation is then followed by Act No. 297/2016 Coll., on trust services for electronic transactions, as amended (“ZoSl”).
Czech legislation currently distinguishes 4 types of electronic signatures:
- qualified electronic signature – an advanced electronic signature created by qualified means for creating electronic signatures, which is based on a qualified certificate for electronic signatures (Article 3(12) of eIDAS);
- advanced electronic signature based on a qualified certificate – together with a qualified electronic signature it is a so-called recognised electronic signature within the meaning of Section 6(2) of ZoSl;
- advanced electronic signature that is not based on a qualified certificate – this signature meets all the requirements of Article 26 of eIDAS, but lacks the condition of a qualified certificate issued by a qualified service provider; and
- simple electronic signature – data in electronic form that are attached to or logically linked to other data in electronic form and that a person uses for signing (Article 3(10) of eIDAS).
The above division shows that the so-called recognised electronic signature is not a separate category of electronic signature, but it is only a legislative abbreviation for two categories that are considered legally acceptable without further consideration: qualified electronic signature and advanced electronic signature based on a qualified certificate. According to Section 6(1) ZoSl, this is the minimum level of signature acceptable for dealing with the public administration.
A simple electronic signature means, for example, putting the name and surname at the end of an email or attaching a picture or scan of the physical signature to an electronic document, but also using increasingly popular services such as DocuSign or Signi.
Unlike the first three categories of electronic signature, a simple electronic signature has been considered less conclusive. In the case that a dispute arose from a legal action bearing a simple electronic signature, it was necessary to prove the identity of the signatory and the fact that the signatory had actually expressed his or her will by signing. Whereas nothing similar is required for a qualified electronic signature, as it has the same effects as an officially certified physical signature.
However, it has not yet been clear whether only a simple electronic signature is sufficient for private legal action or whether one of the „higher forms” of electronic signature is necessary. The judgment confirming that a simple electronic signature is sufficient for concluding a private legal action is a response to this uncertainty, and thus the requirement of a written form under the CC will be complied with when using e.g. the DocuSign service. Although the Judgment has not yet been confirmed by the Supreme Court of the Czech Republic, which unifies the case law, it can still be welcomed, as it brings a greater degree of certainty to legal actions made in electronic form.
Key recitals
The Court upheld the decision of the first instance court on the issue of the dispute between the real estate agent and the service seeker. The real estate agency, in accordance with the brokerage contract, had arranged for the conclusion of an agreement on the purchase of the property in which, inter alia, the defendant had accepted a change in the amount of the purchase price. The defendant subsequently refused to pay the real estate agent’s commission, supporting its position by arguing (among other arguments) that the agreement was signed by means of DocuSign with a simple electronic signature, not an advanced electronic signature, and therefore could not have been a valid legal action in the prescribed written form.
However, the court sharply objected to this argument of the defendant and stated that the defendant is wrong if she believes that an advanced electronic signature is required for the validity of a legal action made by electronic means. The court referred in particular to the aforementioned Article 561(1) of CC, but also to eIDAS, which is directly applicable EU legislation. Although the eIDAS Regulation distinguishes only three types of electronic signature (qualified, advanced and simple), it guarantees both the function of legal relevance (an electronic signature must not be denied legal effects) and the evidence function (it must not be rejected as evidence) to even a simple electronic signature.
The court also referred to the Section 7 of the ZoSl, according to which, in addition to a recognised electronic signature, another type of signature may also be used for signing by electronic signature if the electronic document is signed by which a legal action is carried out in a manner other than that referred to in Section 5.[2] This is the case when the document is signed by a person other than the public signatory or a person outside the exercise of his/her authority. According to the court’s reasoning, another type of electronic signature is just a simple electronic signature, as the legislation does not distinguish any other „unrecognized” type of electronic signature.
Although it is still true that in the case of a simple electronic signature, it is necessary to prove the identity of the signatory and the fact that the signatory expressed his or her will, the court concluded that in practice the document is usually accompanied by other direct and indirect evidence that can confirm the identity and will of the signatory. In particular, the Court referred to the subsequent conduct of the parties in the performance of the obligation. It can then be deduced quite reliably that the document in question preceded its creation and probably what its content was.
Finally, the court stated that even with a traditional signature on a document in paper form, the certainty of the author’s signature is not always fully guaranteed. The signature merely creates evidence which makes it possible to assume with some probability that the person who signed the document is the author of the expression of will on the document.
What is and what is not a simple electronic signature?
In the context of the Judgment, it can therefore be said that signing an electronic document via DocuSign or Signi or signing it by inserting a scanned physical signature has the same level as if the document in paper form had been signed manually and not officially certified. In such a case, the private transaction will be valid and, where the law either requires a written form or the circumstances make a written form preferable to an oral form, the legal requirement of form will also be satisfied.
As indicated in the introduction to this article, neither the law nor the eIDAS Regulation imposes almost no requirements on a simple electronic signature (as opposed to a qualified or advanced electronic signature). Thus, although it may seem to us that it is only possible to electronically sign a document via a specific application, in reality almost anything can be a simple electronic signature. The above-mentioned definition of a simple electronic signature, which comes from Article 3(10) of eIDAS, does not specify in any detail what this „data in electronic form that are attached to or logically associated to other data in electronic form” should look like or how it should be attached. There is therefore a wide room for interpretation.
So it will undoubtedly be not only about inserting a picture of the handwritten signature to the electronic document, but it can also be a signature with an electronic pencil or finger on a tablet or smartphone, when this stroke creates a signature in electronic form, or even marking the consent box. Once this „signature” data is combined with the data of the document being signed, it is a simple electronic signature within the meaning of eIDAS and is therefore a valid private legal action in writing.
Electronic signatures in professional practice
The Judgment brings a welcome shift towards the digitalisation of legal and other practices. For example, in commercial relations, if the parties want to be sure that the legal transaction in question was made in writing, it will now no longer be necessary to send contracts in multiple copies by post or courier to individual parties and thus to secure physical signatures.
Thanks to the Judgment, it is also certain that in the case of receipt of an electronic document, it is no longer necessary to print it out in paper form, sign it and then send it back to the other party to the contract as a scanned document; the use of a simple electronic signature is sufficient.
Electronic signing saves not only time costs (no need to meet in person or wait for delivery of signed documents), but also factual costs (many contracts, including annexes, have hundreds of pages, which often have to be printed in several copies, in some cases with additional costs for a courier, etc.).
One of the areas that may also be affected by the Judgment’s conclusions is HR, which can look forward to the confirmation of many simplifications. HR professionals, when electronically signing contracts of employment, agreements for work performed outside the employment relationship and similar employment documents, subject to those that require an expressly recognised electronic signature or are delivered in person or by post, can now also sign these documents with a simple electronic signature. The judgment also provides for the use of the aforementioned DocuSign or Signi applications, which are becoming more and more widespread in the field of employment law, and others.
Electronic signing in HR brings not only increased efficiency, but also simplifies the storage and handling of employment documents. It will no longer be necessary to archive all employment documents in paper form, but it will be sufficient to store them electronically, which will facilitate their subsequent search, storage, as well as cooperation with other departments or employees who would need access to these documents. It should also not be overlooked that the HR agenda normally includes payroll and benefits, where the Judgment also brings more certainty to the validity of legal actions.
We remind you, however, that these new benefits of the Judgment will only apply in private legal actions. In the case of electronic signatures, the recognised electronic signature, which we have defined above, must continue to be used in relation to public authorities.
Conclusion
Electronic signing has many advantages. Until now, however, in private legal actions, the parties could be burdened with uncertainty as to the (in)validity of the legal action thus concluded. Although some of the professional community was inclined to the same conclusions before the Judgment was issued, the Judgment now provides a form of legal certainty in the event of a dispute arising from electronically signed documentation.
Persons who sign a document with a simple electronic signature do not have to worry about whether the document will be valid and effective or whether it will meet the requirements for a written legal transaction. A private law document signed with a simple electronic signature will be treated as a document that would have been signed with a physical signature without official verification.
The judgment represents a necessary step towards the digitalisation of legal proceedings, responding to the challenges of a contemporary world moving increasingly to virtual planes. In practice, electronic signing of private law documents will facilitate the work of employees across disciplines and save both time and factual costs.
If you have any questions about electronic signatures or information and communication technology law, we are at your disposal. Do not hesitate to contact us.
[1] „The validity of a juridical act made in written form requires the signature of the acting person. The signature may
be replaced by mechanical means, where it is typical to do so. Another legal regulation provides how a document can be
electronically signed when making juridical acts by electronic means.”
[2]„Only a qualified electronic signature may be used for signing with an electronic signature if the electronic document is signed by which a) the State, a territorial self-governing unit, a legal person established by law or a legal person established or founded by the State, a territorial self-governing unit or a legal person established by law, or a body thereof, or another part thereof (hereinafter the „public signatory”) performs an act or acts legally, or b) a person not referred to in point a) performs an act in the exercise of his/her competence.”
Mgr. Jakub Málek, managing partner – malek@plegal.cz
Mgr. Karel Janeba, junior lawyer – janeba@plegal.cz
Gina Agatha Renotière, legal assistant – renotiere@plegal.cz
2. 1. 2025