eSignature Legality in Taiwan

eSignature Legality Summary

Under Taiwan law, a written signature is not necessarily required for a valid contract - contracts are generally valid if legally competent parties reach an agreement, whether they agree verbally, electronically or in a physical paper document (Article 153 of the Civil Code). Parties can use any form of electronic signature, with the consent (express or implied) of the other party, to create valid contracts and documents of any kind that are not subject to a specific statutory form requirement. To prove a valid contract, parties sometimes have to present evidence in court. Leading digital transaction management solutions can provide electronic records that are admissible in evidence under Article 363 of the Taiwan Code of Civil Procedures, to support the existence, authenticity and valid acceptance of a contract.

Use Cases for Standard Electronic Signature (SES)

Use cases where an SES is typically appropriate include:

• HR documents such as regular employment contracts, NDAs, employee invention agreements, privacy notices, benefits paperwork and other new employee onboarding processes, except termination notices

• commercial agreements between corporate entities including non-disclosure agreements, purchase orders, order acknowledgements, invoices, other procurement documents, sales agreements, distribution agreements, service agreements

• consumer agreements (excluding consumer loan agreements), but including new retail account opening documents, sales terms, services terms, software licenses, purchase orders, order confirmations, invoices, shipment documentation, user manuals, policies

• residential and commercial lease agreements

• software license agreements

• copyright, patent and trademark licenses

• transfers of intangible property (e.g., patent and copyright assignments)

Use Cases That Are Not Typically Appropriate for Electronic Signatures or Digital Transaction Management

Use cases that are specifically barred from digital or electronic processes or that include explicit requirements, such as handwritten (e.g. wet ink) signatures or formal notarial process that are not usually compatible with electronic signatures or digital transaction management.

• Notarization – real property transfer contracts and deeds

• Handwritten - application Documents required under Land Expropriation Act, Construction Act, Sand and Gravel Excavation Act, Factory Management Act, and some other administrative regulations

• Handwritten - securities transactions and listing documents required by the Financial Supervisory Commission under Securities Transaction Act, Merger and Acquisition Act, Regulations Governing the Administration of Shareholder Services of Public Companies (Ruling dated August 17, 2016 No. 10500309771 by the Financial Supervisory Commission)

• Handwritten - notices of insurance contracts and evidential documents for insurance claims under the Insurance Law required by the Financial Supervisory Commission (Ruling dated March 31, 2016 No. 10502561091 by the Financial Supervisory Commission)

• Handwritten - documents regarding the issuance and amendment of passport by the Ministry of Foreign Affairs

• Handwritten - service agreement where a foreign worker provides home care service

• Notarization - contracts made for the obligations of the transferring, creation, or altering of rights over the real property, it shall be made in the notarization made by the notary public. (Article 166-1 of the Civil Code, but note that this article has not yet come into effect)

[1] Pursuant to Article 2(3) of the ESA, “digital signature” (“DS”) means an electronic signature generated by the use of mathematic algorithm or other means to create a certain length of digital data encrypted by the signatory’s private key, and capable of being verified by the public key. This definition is similar to that of AES in Europe.

[2] Pursuant to Article 10 of the ESA, digital signature certificate (“DSC”) means a digital signature is employed in an electronic record in circumstances where law or regulation requires a handwritten signature or seal (see Article 9 of the ESA), then with the consent of the other party, using an electronic signature is permissible if the digital signature meets the following requirements: (a) it shall be supported by a certificate issued by a certification-service-provider whose certification practice statement is approved by Taiwan government; and (b) the certificate is still valid and is not used contrary to its limitation of use. The DSC is similar to the QES in Europe.