E-Signature Regulations

Does your jurisdiction maintain a list of trusted entities to qualify e-signatures?

In accordance with the eIDAS Regulation, trust services and trust service providers are registered by the Hungarian National Media and Infocommunications Authority. The list of the qualified trust service providers is available here: http://webpub-ext.nmhh.hu/esign2016/szolgParams/main.do.

Please provide a quick overview of the law, i.e., types of contracts that qualify for use with e-signature.

Formality requirements, i.e. the legal necessity to make a declaration in writing requires special awareness and assessment, as it can be deducted from the technology neutral, abstract provisions of the Hungarian Civil Code that the Hungarian legislator intended to let the judicial practice to decide on what constitutes “written”’, including on the document signed electronically. Written formalities are required in many cases, for example, for sale and purchase agreements of real estates, lease agreements or pledge and surety agreements. It may also be the case that the law only requires certain contractual clauses to be in writing (such as a clause on liquidated damages).

If the Hungarian Civil Code requires written form for a document (e.g. agreement on the establishment of pre-emption rights, repurchase rights, purchase options or put option right) it shall be deemed written if it is made in a form that represents (i) the unchanged reproduction of its content (requirement of authenticity of the declaration), (ii) the identification of the declarant (requirement of the integrity of the declaration) and (iii) the identification of the time when it was made. The preparation of an electronic document that is signed with an ‘advanced’ electronic signature with a time stamp or with a ‘qualified’ electronic signature can fulfil the requirements of the Hungarian Civil Code.

In the Hungarian corporate law, advanced electronic signatures with a time stamp or qualified electronic signatures may be used when a written form is required (e.g. for the delegation of representation rights to employees of the company).

In employment law, the Hungarian Labour Code however, does not prescribe as a validity condition that the declarant must sign its declaration. It has been repeatedly recognised in several court cases that even an e-mail can meet the requirements of written form under the Hungarian Labour Code.

What is the legality of e-signatures in your jurisdiction? Are there key exceptions?

According to the eIDAS Regulation, the term of electronic signature refers to the methods of signing an electronic document by electronic means. The current legislation distinguishes between three types: (i) advanced electronic signatures, (ii) qualified electronic signatures and (iii) simple electronic signatures.

(i) Advanced electronic signature
Advanced electronic signature means an electronic signature which is (i) uniquely linked to the signatory; (ii) capable of identifying the signatory; (iii) created by using electronic signature creation data that the signatory can, with a high level of confidence, use under his sole control; and (iv) linked to the data signed therewith in such a way that any subsequent change in the data is detectable. (Article 26 of the eIDAS Regulation)

As detailed above, the Hungarian Civil Code requires the identification of the time when the declaration was made. On the contrary, this condition is not prescribed by Article 26 of the eIDAS Regulation on advanced electronic signature. This results in many confusions, as electronic signatures that meets the requirements of eIDAS Regulation on advanced electronic signature, may not be considered as a valid written declaration under Hungarian law if the date of the signature cannot be detected.

To prove the date and time of the electronic signature, an “electronic time stamp” can be applied, which is a suitable means of identifying the time of a declaration.

(ii) Qualified electronic signature

According to Article 25 (2) of the eIDAS Regulation, a qualified electronic signature has the same legal effect as a handwritten signature. As a result, the qualified electronic signature provided by a trust service provider can have the same effect as a handwritten signature.

In order to create a private document “with full evidentiary value” under Hungarian law, the declarant can sign the document with a qualified electronic signature or by authenticating the electronic document with an authentication service (so called “AVDH” service).

What is the e-signature law enforceable in your jurisdiction?

In Hungary, provisions on electronic signatures are determined by 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 (“eIDAS Regulation”), which is directly applicable.

Formality requirements in civil law (the necessity to make a declaration in writing) are regulated by Hungarian Act V of 2013 on the Civil Code (“Hungarian Civil Code”) and by certain sectoral legislation such as Hungarian Act I of 2012 on the Labour Code (“Hungarian Labour Code”), Hungarian Act CCXXXVII of 2013 on Credit Institutions and Financial Enterprises or Hungarian Act LXXVI of 1999 on Copyright.

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