The health situation and restrictive measures worldwide have (somehow unexpectedly) required businesses in most industries to adapt and operate in a remote work environment. This abrupt change in a day-to-day business has heightened the importance and advantage of using electronic signatures, in contrast to traditional wet ink signatures.
This is the first in a series of articles providing a general legal overview of the applicable laws and use cases pertaining to electronic signatures in Slovenia, Croatia, Serbia, Montenegro, North Macedonia, and Bosnia and Herzegovina.
In the Republic of Slovenia, electronic signatures are regulated by the Electronic Business and Electronic Signature Act (Slovenian Zakon o elektronskem poslovanju in elektronskem podpisu; “ZEPEP”) and the Regulation (EU) No 910/2014 on electronic identification and trust services for electronic transactions in the internal market (“eIDAS Regulation”).
The eIDAS Regulation, which defines three types of electronic signatures (“simple” electronic signature, advanced electronic signature and qualified electronic signature), provides that an electronic signature shall not be denied legal effect and admissibility as evidence in legal proceedings solely on the grounds that it is in an electronic form or does not meet the requirements of a qualified electronic signature, which is explicitly given the same legal effect as a handwritten signature.
In terms of evidentiary value, in case of a “simple” electronic signature and an advanced electronic signature, a burden of proof for proving the authenticity of the electronic signature lies with a person claiming its authenticity. In case of a qualified electronic signature, its authenticity is presumed.
When are electronic signatures allowed?
ZEPEP specifically confirms that an electronic form of a document shall be deemed equivalent to its written form, provided that the data in an electronic form is accessible and suitable for subsequent reference.
Use cases where electronic signatures are typically allowed in accordance with the Slovenian law:
- commercial agreements and documents, including NDAs, LOIs, purchase orders, order confirmations, invoices, sales agreements, distribution agreements, service agreements, loan agreements, lease agreements;
- consumer agreements, including agreements for purchase of goods and services, consumer loan agreements, lease agreements;
- intangible property agreements, including license agreements; and
- HR documents, including employment contracts, NDAs, and notices of termination.
When are electronic signatures not appropriate?
In certain cases, ZEPEP explicitly excludes the equivalence of an electronic form of a document with a written form.
Such cases that are accordingly not appropriate for electronic signatures include:
- legal transactions by which property rights to real estate are transferred or by which some other real right to real estate is established, including mortgage loan agreements;
- agreements regulating property relationships between spouses; and
- agreements that are to be concluded in the form of a notarial deed (e.g. share pledge agreements, share purchase agreements, etc.).
Can blockchain technology be used for electronic signatures?
Yes, provided that blockchain technology could satisfy the requirements set out in the eIDAS Regulation for electronic signatures.
At first glance, it seems that blockchain technology could easily satisfy the requirements for a “simple” electronic signature. Even a scanned signature that is attached to a document falls within the definition of a “simple” electronic signature under the eIDAS Regulation.
As for the advanced and qualified electronic signature, whether blockchain technology satisfies the requirements set out in the eIDAS Regulation needs to be assessed on a case-by-case basis. In order for an electronic signature to be recognized as an advanced, it must be (i) uniquely linked to the signatory, (ii) capable of identifying the signatory, (iii) created using electronic signature creation data the signatory can, with a high level of confidence, use under their sole control, and (iv) linked to the data signed therewith in such a way that any subsequent change in data is detectable. There are blockchain frameworks which would not satisfy the above-mentioned criteria by their very nature. For example, certain frameworks employ pseudo-anonymity, so it could be argued these frameworks are not capable of identifying the signatory.
The bar is set even higher for qualified electronic signatures, as these need to satisfy the requirements for advanced electronic signatures and have the signature created by a qualified electronic signature creation device. Whether this is feasible will also largely depend on the individual blockchain framework, but does not seem impossible (at least not from a legal perspective).
 An advanced electronic signature or a qualified electronic signature might be required by the legislation or in cases where a written form is prescribed for the valid conclusion of the agreement (e.g. employment contracts or consumer loan agreements).
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