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Is It Secure to Use E-Signatures for Commercial Transactions in Thailand?

September 1, 2021

This article discusses the topic of e-signatures and electronic transactions in Thailand. For reasons which we will cover in this article, it is often best to seek legal advice before using e-signatures in the Kingdom.

Electronic signature has been recognized by law in Thailand since 2001, with the Electronic Transactions Act B.E 2544 („Act“). Under Thai law, a written signature is not necessarily required for a valid contract; however, some requirements must be followed to comply with the Act. The Act states that contracts cannot be denied on the premise that they are concluded electronically. It is crucial to note that not all electronic signature applications or technology are allowed under the Act

A. Electronic Transactions Act B.E 2544 (2001)

According to the Electronic Transactions Act B.E 2544 (2001), „transaction“ means any act related to civil and commercial activity. „Electronic transaction“ means a transaction in which an electronic means is used in whole or in part.

According to Section 8 of the Act, in the case that the law requires the transaction to be made in writing if the transaction is generated in an electronic form without being altered, then it is deemed that such information is already made in writing. Furthermore, according to Section 9, an electronic signature shall be deemed complete if 1) it can identify the signatory and the signatory can verify that they are the signatory, and 2) the electronic signing is deemed appropriate and credible for the contracting parties.

Often, there is no clear practice of the authority to accept or consider the agreement signed electronically. However, in order to comply with Act, the following conditions must be met: 

  • Able to identify the owner of e-signature or digital signature and;
  • Able to track back to the tools or processing that were used in the signing process such as technology, program, or Company (Public Key Infrastructure: PKI technology);
  • Any change that may or may not happen to the signature must be able to be detected; and
  • In cases where the law requires a signature, the ability to generate a certificate of completion once the documents have been signed.

 

B. Timestamping

Electronic time stamp provides electronic documents with the reliable Timestamping Authority (TSA) and verifies the validity of reference times. It can be used with a digital signature to certify the existence of documents by having the TSA act as a witness or a trusted third party because they do not have any interest in such documents. It can also be used to verify that a time-stamped electronic document is valid.

C. Using electronic signature services

Electronic document signing services (such as DocuSign or Adobe Sign) can be applied based on the service’s specific features. However, we do not advise our clients to use e-signature because it may cause issues such as determining the signer’s intent or validating signatures. Furthermore, e-signature is still relatively new in Thailand, and not all government departments accept them. Moreover, we suggest that e-signature should be used in combination with e-timestamping to validate the document at all times.   

Cases where it is not usually recommended to apply electronic signature:

  • Transactions that may require registration with government authorities typically may not be conducted using an electronic signature, such as:
    • Contracts of sale of immovable property, large ships, or floating houses
    • Gift contracts relating to the items mentioned above
    • Contracts of sale with right of redemption relating to the above-mentioned items
  • Hiring immovable property for a period of 3 years or more (except lease contracts up to 3 years and other contracts related to real estate, which can be signed validly via any form of electronic signature) (Sec. 538 of CCC)
  • Mortgage contracts
  • Transactions concerning family or succession (Royal Decree Prescribing Civil and Commercial Transactions which are Exempted from the Application of the Law on Electronic Transactions, B.E. 2549 (2006)

Cases where an electronic signature may be permitted:

  • HR documents such as work contracts and as part of the employee onboarding process
  • Corporate agreements between commercial organisations such as NDAs, purchasing documents, and some types of sales contracts
  • Certain types of consumer agreements or documents
  • Real estate documents such as lease contracts and other related property documents

D. Company seal

 According to our research, in cases where a company affidavit is required, even if the e-signature is valid, the corporate seal is still needed in the signing process. So, if a document or contract lacks the company seal, its legitimacy may be questioned in court.

E. Conclusion

 It is important to recognize that not all applications, services, or technologies are accepted under the Electronic Transaction Act B.E 2544 (2001). The use of electronic document signing services should be subject to the definition of electronic transaction and effective under the law. Therefore, a proof of agreement made and signed through the signing service should be provided.

 It should be noted that many government officials still require hard copies; often, they do not accept documentation related to electronic transactions. Furthermore, we do not recommend e-signatures for high-value transactions.

Feel free to contact us if you have any questions at [email protected]


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