Covid-19 and the use of electronic signatures in Sweden

Introduction

Covid-19 affects people and businesses globally and may impact the ability to physically meet and sign documents, or even the ability to print, sign and scan certain documents. In this situation, contracting parties may consider using electronic signatures instead of physical “wet ink” signatures for a smoother – and more secure – signing process.

An electronic signature is generally more advanced than a physical “wet ink” signature, but there are various kind of systems providing electronic signatures. However, the following elements should always be captured in the signing process; i) proper identification of the signatories; ii) manifestation of the intent to sign the document; and iii) maintenance of the integrity of the document being signed.

General use of electronic signatures and application under Swedish law

Electronic signatures are generally valid under Swedish law and can be used for almost all business contracts, corporate documentation and applications. The general rule under Swedish law is that a contract is considered binding if; i) there is a complete offer and a clear acceptance of that offer; ii) the agreement involves two or more parties; and iii) no ground for invalidity is applicable. Provided that these requirements are met, an electronic signature is generally just as good as a wet ink signature. It should also be noted that it is possible to collect more data/evidence when a document is signed by electronic signature, than in the case of a scanned or couriered wet ink signature.

eIDAS and national regulation

The use of electronic signatures is harmonized at EU level through the EU Regulation no. 910/2014 on electronic identification and trust services for electronic transactions in the internal market (“eIDAS“), but national regulation is allowed regarding which type of signature that is required for a particular document. The regulation is technology neutral and provides for three types of electronic signatures, namely standard, advanced and qualified electronic signatures. The main difference between them is the security and identification requirements. The eIDAS stipulates that an electronic signature cannot be denied legal effects merely on the basis of it being an electronic signature and, furthermore, a qualified electronic signature should have the same legal effects as a handwritten signature. The eIDAS also states that a qualified signature recognized by one EU member state should be recognized also by other member states. As for national regulation, there are i) few formal requirements for entering into agreements, ii) a written signature is not necessary for a binding contract and iii) when a specific type of signature is required, it is usually stipulated as part of regulation governing the relevant contract. Furthermore, there are no general limitations as to what can be presented as evidence in Swedish courts, meaning that there are few restrictions for the use of electronic signatures under Swedish law.

Use cases and limitations

The above indicates that most commercial agreements, HR documents, lease agreements, sale and purchase agreement, licenses etc. may be signed using a standard electronic signature. This means that the possibilities for using electronic signatures should be quite wide in any line of business.

However, corporate documents or documents pursuant to the Swedish Companies Act (Sw. Aktiebolagslagen), Annual Reports Act (Sw: Årsredovisningslagen) or the Auditing Act (Sw: Revisionslagen) must be signed using an advanced electronic signature. Moreover, whenever there is a requirement that a document must include a handwritten signature, or where there can only be one original copy of a document, an electronic signature is often difficult to use. As an example, share certificates are bearer instruments that cannot be signed using an electronic signature as these require both a handwritten signature and that there is only one copy of the document.

Another special case is termination of employment, which must be delivered personally or via registered letter to the employee. However, this does not mean that a notice of termination cannot be signed electronically, it just means that a physical copy of the notice must still be delivered to the employee.

Thus, when determining whether you should use electronic signatures in your business, it is important to ensure that there are no such signature requirements for the type of documents that you intend to use electronic signatures for, which could prevent such use.

Verification of electronic signatures

As stated above, an electronic signature typically captures more verification data about the signatory than a scanned wet ink signature. The tools for verification vary depending on the service being used. Some providers have an evidence packages included in the signed document, or a separate certificate detailing the events that have occurred prior to and during the signing of the document, whereas others allow the verification of the signature through a webpage or OCR-code. The best starting point is to check the respective signature providers’ webpages, where many have descriptions on how to verify an electronic signature from their system.