Name
Global FinTech Guide
Country _ Name
Hong Kong
SectionTitle
Signature requirements
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The signature requirements pertain the legal or contractual requirements in order to make a legally effective declaration of intent or a legally binding contract.


Possibility to replace a specific formal requirement of making a binding declaration of intention

The Electronic Transactions Ordinance (Cap. 553) (“ETO”) gives electronic records, contracts, and signatures the same legal status as their paper counterparts. 

The definition of “electronic signature” under the ETO is wide. It consists of any letters, characters, numbers, or other symbols in digital form attached to or logically associated with an electronic record and executed or adopted for the purpose of authenticating or approving the electronic record.

Digital signatures as a form of electronic signature are also recognised under the ETO. A digital signature is a more secure form of electronic signature supported by a recognised digital certificate that is generated using asymmetric encryption technology and has been authenticated.

Under the ETO, an offer and acceptance of an offer may be in whole or in part expressed by means of electronic records, and the validity or enforceability of a contract will not be denied solely because an electronic record has been used for the formation of a contract, whether in whole or part.

Further, electronic signatures are recognised for the purpose of most contracts provided that the criteria set out in the ETO are met. There are no express requirements for the electronic signature to be in a certain form or format. Please also see (f) below.

Presence of any specific formal requirements to effectively conclude a loan agreement

There are no specific formal requirements to effectively conclude a loan agreement, as long as the key elements to form a valid contract – being (i) offer; (ii) acceptance; (iii) consideration; and (iv) intention to create legal relations – are present. Typically, lenders will require much more than the presence of these four elements, such as, collateral/security.

Process of conclusion of a contract by using a qualified electronic signature in practice

Electronic signatures – Under section 6(1) of the ETO, for contracts not involving a governmental entity, an electronic signature is valid if: 

  1. it is attached to or logically associated with the relevant electronic record for the purpose of identifying the signatory and indicating the signatory's authentication or approval of the information contained therein;
  2. the method used to attach or associate the signature is reliable and appropriate having regard to all the relevant circumstances; and
  3. the person to whom the signature is to be given consents to the use of such method.

Digital signatures – Under section 6(1A) of the ETO, for contracts involving a government entity, a digital signature is valid if:

  1. supported by a recognised certificate (i.e. digital certificate issued by a certification authority);
  2. generated within the validity of such certificate; and
  3. used in accordance with the terms of such certificate.

In Hong Kong, there are two recognised certification authorities under ETO: (1) Postmaster General offering Hong Kong Post Certification Authority services; and (2) Digi-Sign Certification Services Limited. 

Legal consequences to a contract in case of not fulfilling formal requirements

If the formal requirements are applicable to a specific contract and they are not fulfilled, the contract has not been validly entered into. 

Usual practice of signing contractual agreements in the B2B sec

tor There is no publicly available information. From our experience, electronic or digital signing is gaining momentum especially among multinational companies; but local companies predominantly still sign contractual agreements in the traditional manners.
 

Usual practice of signing contractual agreements in the B2C sector

There is no publicly available information.

From our experience, in the e-commerce sector, to the extent that any click-wrap contracts satisfy the elements of forming a valid electronic contract (i.e. offer, acceptance, consideration and intention to create legal relations), these contracts are legally enforceable.

In click-wrap contracts, customers may scroll down to the bottom of the entire set of terms and conditions on screen and click an “I accept” button (or similar) before such goods can be ordered, services procured, or information accessed. No paper record is generally created nor is the Internet user’s signature (whether electronic or paper) typically required. 

The documents requiring “wet-ink” signatures in order to be valid are set out under Schedule 1 to the ETO:

  1. Testamentary documents
  2. Trusts (other than resulting, implied or constructive trusts)
  3. Powers of Attorney
  4. Documents that are required to be stamped/endorsed under Stamp Duty Ordinance (e.g. a lease, sale of property, sale of stock)
  5. Government conditions for the grant of land or government leases
  6. Deeds / documents concerning land and property transactions
  7. Oaths and affidavits
  8. Statutory declarations
  9. Judgments / court orders
  10. Warrants issued by a court or a magistrate
  11. Negotiable instruments

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