In China, legal contracts can be concluded electronically. The Civil Code recognises that contracts can be formed in writing, orally, or in other forms, including electronically.
Key provisions:
Article 469: Electronic data (such as emails or exchanges via digital platforms) that can display specified contents in a material form and be accessed for future reference qualifies as a written form.
Article 491: For contracts formed through electronic data, the contract is established when a letter of confirmation is executed or when an online order is successfully placed, provided the commodity or service information meets the conditions of an offer.
Exceptions: Certain contracts cannot be concluded electronically, including:
Documents involving personal relationships (e.g., marriage, adoption, or succession).
Suspension of public services (e.g., water, heat, or gas supply).
For online sales contracts, a "click-to-accept" process is valid, provided the terms do not violate Chinese law. However, clauses that unreasonably restrict parties' rights may be deemed unenforceable.
Governing Laws and Dispute Resolution
China imposes no specific restrictions on the choice of governing law, contract language, or forum for disputes in digital contracts.
Business-to-Business (B2B) vs. Business-to-Consumer (B2C):
B2C contracts: The Implementation Rules of Consumer Rights and Interests Protection Law (Article 17) prevent businesses from unreasonably limiting consumers' choice of dispute resolution methods (litigation or arbitration).
Dispute Resolution Mechanisms:
Digital contract disputes can be resolved through:
Negotiation or mediation by consumer organisations or industry associations.
Filing complaints with relevant authorities.
Arbitration or litigation.
Online dispute resolution mechanisms offered by e-commerce platforms.
For cross-border disputes, Article 73 of the E-Commerce Law encourages establishing international e-commerce dispute resolution mechanisms.
Electronic Signatures
Recognition of E-Signatures:
The Electronic Signature Law governs the use of electronic signatures, giving them the same legal validity as traditional wet-ink signatures or seals if they meet specific conditions.
Definition and Scope:
Electronic signatures are data linked to an electronic form used to identify the signatory and indicate their approval of the content.
The term “data telex” refers to information generated, sent, received, or stored electronically, optically, or magnetically.
Exclusions: E-signatures cannot be used for:
Personal relationships (e.g., marriage).
Real estate transactions.
Suspension of public services.
Technical and Provider Requirements:
No mandatory registration or licensing for e-signature providers.
The law defines no specific technical format for e-signatures, focusing on their functional validity.
Breach of Digital Contracts
Special Forums:
For breaches of digital contracts, remedies include standard options like damages, permanent injunctions, or specific performance. Additionally, the following forums are available:
Mediation by consumer organisations or industry bodies.
Online dispute resolution mechanisms offered by e-commerce platforms.
Enforcement:
Remedies for breaches of digital contracts mirror those for traditional contracts, ensuring uniformity in enforcement and protection of rights.
China’s legal framework ensures that digital contracts are widely recognised and enforceable while providing mechanisms for resolving disputes efficiently. However, exceptions and compliance with specific regulations are crucial for ensuring enforceability.
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