eSignature Legality Guide

A significant update is the amendment to the Act on Trust Services for Electronic Transactions, effective from 1 July 2022, which introduced the option for signatures to be notarized electronically (i.e., using a notary’s electronic signature). Another change, effective since September 2021, allows for electronic notarial deeds, which notaries can prepare based on remote (electronic) identification of the signer.

These legislative changes have greatly reduced the range of legal acts (mainly contracts) that require written form and handwritten signatures, as electronic signatures are now permitted in nearly all cases where Czech law previously required a notarized (verified) signature or a notarial deed, rather than just a written form.

The eIDAS Regulation is technology-neutral and defines an electronic signature as “data in electronic form which is attached to or logically associated with other data in electronic form and which is used by the signatory to sign.”

There are three categories of electronic signatures under the eIDAS Regulation: SES, AES, and QES.

• SES, or "simple electronic signature," refers to any electronic signature that does not meet the criteria for higher levels such as AES or QES. For example, typing your name at the end of an email can be considered a simple electronic signature.
• AES, or “advanced electronic signature,” is a type of electronic signature that must: (a) be uniquely linked to the signer; (b) be capable of identifying the signer; (c) be created using means under the sole control of the signer; and (d) be connected to the signed data so that any changes can be detected.
• QES, or "qualified electronic signature," is a specific form of digital signature that meets strict government requirements, including the use of a secure signature creation device, and is certified as "qualified" by the government or an authorized entity.

Article 25(1) states that an electronic signature cannot be denied legal effect or admissibility as evidence in legal proceedings solely because it is in electronic form or does not meet QES requirements. Articles 25(2) and (3) grant QES the same legal status as a handwritten signature and ensure that a QES recognized in one EU member state is accepted in all others. Recital 49 allows national laws to specify which type of electronic signature is required in particular situations.

Additionally, Section 6 (2) of the Act on Trust Services defines a "recognized electronic signature" (RES) (in Czech: uznávaný elektronický podpis) as either (i) an AES based on a Qualified Certificate or (ii) a QES (as defined by the eIDAS Regulation). The Czech Republic provides a publicly accessible list (in Czech) of authorized Qualified Certificate providers.

Examples of transactions where an SES is generally suitable include:

• Business contracts between companies, such as purchase orders, order confirmations, procurement documents, sales contracts, and service agreements
• Consumer contracts, including terms of sale, service terms, software licenses, purchase orders, order confirmations, shipping documents, user manuals, and policies (excluding consumer loan agreements)
• Software license contracts
• Non-exclusive licenses for copyright, patents, and trademarks

Transactions where a higher level of electronic signature than SES may be required or strongly advised include:

• RES - Consumer loan contracts (Section 6 of Act No. 145/2010 Coll., on Consumer Credit, as amended)
• RES - Standalone acknowledgments of debt (Section 2053 of the Civil Code)
• RES - Agreements to terminate co-ownership of real estate or businesses (Section 1141 of the Civil Code)
• RES - Construction contracts (Section 1170 of the Civil Code)
• RES - Novation or settlement agreements if the original obligation was in writing or relates to a time-barred right (Section 1906 of the Civil Code)
• RES - Guarantee declarations (Section 2018 of the Civil Code)
• RES - Residential real estate lease contracts and lease termination notices (Sections 2237 and 2286 of the Civil Code)
• QES - Wills (with certain exceptions) (Section 1532 of the Civil Code)
• QES - Declarations of disinheritance (Section 1649 of the Civil Code)
• RES - Commercial agency contracts (Section 2483 of the Civil Code)
• RES - Power of Attorney, unless it concerns only a specific legal act (Section 441 of the Civil Code)
• RES - Consents for certain interventions affecting an individual's physical integrity (Section 96 of the Civil Code)
• RES - Proposals to expel a member from an association (with some exceptions) (Section 240 of the Civil Code)
• RES - Confirmations of contribution obligations to a foundation (Section 332 of the Civil Code)
• RES - Package tour certificates (Section 2525 of the Civil Code)

In addition to the documents listed above, an RES is necessary for executing agreements related to the creation, modification, or termination of employment relationships (Sections 34 (2), 49 (2), 50 (1), 60, 66 (2) of Act No. 262/2006 Coll., Labor Code, as amended). However, the Labor Code imposes additional and often complex procedural requirements for electronic communications between parties, which can discourage the use of electronic signatures for these agreements.

Furthermore, as mentioned earlier, recent amendments have made it possible for legal acts (such as contracts) that require a verified (notarized) signature or a notarial deed to be signed using a notary’s electronic signature (specifically a QES). However, using electronic signatures for these documents may still lead to legal uncertainties or issues with authorities refusing to accept electronic documents. As a result, the following types of transactions no longer require handwritten signatures, but the use of electronic signatures for these documents has not yet been fully tested in courts and may carry a higher risk of complications or delays:

• Agreements for the purchase (or other transfer of ownership) or other in rem dispositions (such as mortgages) of real estate (Section 560 of the Civil Code in conjunction with Section 7 of Act No. 256/2013 Coll., as amended, Cadastral Act, and Section 62 (1) of Regulation No. 357/2013 Coll., on Cadastre Register, as amended) – RES + qualified time stamp
• Formal notarization – certain family law contracts, such as matrimonial property regime agreements (including prenuptial contracts) (Section 716 of the Civil Code)
• Formal notarization – contracts for pledges of movables, enterprise pledges, and mortgage contracts for real estate not registered in the Cadastre Register (Section 1314 (2) of the Civil Code)
• Formal notarization – certain inheritance law instruments, such as inheritance contracts (Section 1582 (2) of the Civil Code), inheritance sales (Section 1714 (3) of the Civil Code), renunciation of succession rights (Section 1484 of the Civil Code), contracts for inheritance alienation (Section 1714 of the Civil Code), and appointment of an estate administrator (Section 1556 of the Civil Code)
• Formal notarization (notarial deed) – certain corporate law documents, such as Memorandum of Association/Foundation Deed for limited liability and joint stock companies (Section 8 (1) of Act No. 90/2012 Coll., on Business Corporations and Cooperatives, as amended), and their amendments
• Formal notarization – documents related to foundations/endowment funds (Section 309 of the Civil Code), merger agreements for foundations (Section 383 of the Civil Code), and decisions to change a foundation’s legal form to an endowment fund (Section 391 of the Civil Code)
• Formal notarization – articles of association for unit owners (Section 1200 of the Civil Code)
• Formal notarization – legal acts by individuals who cannot read or write (with certain exceptions) (Section 563 of the Civil Code)
• Formal notarization – personal declarations by family enterprise members waiving their right to a share of profits (Section 701 of the Civil Code)
• Formal notarization – trust by-laws (Section 1452 of the Civil Code)
• Marriage property regime contracts (notarial deed)
• Inheritance contracts and inheritance sales

If the legal requirements for electronic signatures or their permitted uses are not met, the resulting documents may be considered invalid and unenforceable in court due to a lack of proper legal form. Additionally, this could lead to penalties under the laws governing the underlying transaction.

If such a civil law consequence arises from a trust service provider’s failure to comply with legal requirements, affected parties may seek compensation from the provider.