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Beware of electronic form

A year has passed since introduction into the Polish civil law of revolutionary but not widely noticed changes in the form of legal transactions. A few examples will illustrate how important these changes are.

These amendments to the Civil Code created a separate form of legal transaction, “electronic form.” This cut off the controversies that existed over whether electronic form was a separate form or only a mutation of written form. For a year electronic form has possessed its own autonomous status. The consequences of this status can be significant. Both the legal system and the practice still require some time to get used to this new form. This is plain to see from the controversies that may arise in the practical application of these rules. Situations that are particularly hard to resolve may arise in the case of contractual provisions stipulating the form of legal transactions (pactum de forma).

Imagine that a contract contains a provision according to which the contract must be concluded only in written form, or will be invalid. In that case, will the contract be valid if the parties enter into it in electronic form?

To answer this question, two situations should be distinguished. First, the parties may provide for written form under pain of invalidity, but not mention anything about electronic form. It appears that in this situation the key provision will be Civil Code Art. 781 §2, under which a declaration of will made in electronic form is equivalent to a declaration of will made in written form. The rule of the equivalence of these forms set forth in that provision was not excluded by the parties, so it should be found that it still applies.

It is much harder to find a solution in a situation where the contract requires written form under pain of invalidity while expressly prohibiting the use of electronic form. In such case, will the parties’ submission of their declaration of will in electronic form result in effective conclusion of a contract? On one hand, this is an act that seems to conflict with a provision of the contract. On the other hand, the act exerts the legal consequences specified by law (Civil Code Art. 781 §2), leading to equivalence of an electronic statement with a statement made in written form. It might be argued that the intention of the parties in this case was to exclude the application of Civil Code Art. 781 §2, but this raises the question whether application of this provision can be excluded. It should be pointed out in this context that the original proposal for the bill introducing this provision expressly allowed for the parties to exclude its application, but that wording was ultimately not adopted.

It also seems that in analyzing this scenario, it is insufficient to rely on Civil Code Art. 781 §2 alone. Art. 25(2) of the EU’s eIDAS Regulation expressly provides, “A qualified electronic signature shall have the equivalent legal effect of a handwritten signature.” This provision does not refer to equivalence with written form, but equivalence with a handwritten signature. In other words, a qualified electronic signature is simply analogous to a handwritten signature. It does not seem that this rule expressed in the eIDAS Regulation can be excluded by contract.

The reverse situation is less controversial. If the parties include in their contract a requirement for electronic form, it should be understood that conclusion of the contract in traditional written form, with handwritten signatures, will conflict with this provision of the contract even if the parties did not expressly exclude traditional written form. This is because the equivalence of form does not work in the other direction, as the Civil Code does not make a handwritten signature equivalent to an electronic signature.

But it is not only the permissible scope of the parties’ intent with respect to the form of the transaction that appears problematic here. Electronic form also appears to have caused problems for lawmakers. An excellent example is found in the Telecommunications Law, which provides in Art. 56(2) that a contract for telecommunications services shall be made in written or electronic form. This provision was introduced several years ago to make it easier to enter into contracts with telecoms online. But with introduction into the Civil Code of electronic form as a separate form, this provision suddenly changed its meaning. Because “electronic form” under the Civil Code requires the use of a qualified electronic signature, the scope of this provision of the Telecommunications Law became greatly narrowed. This is to be changed by an amendment to the Telecommunications Law currently being considered in the Parliament, which would include in this provision a reference also to “document form.”

In short, it is essential to pay attention to the context and manner in which the term “electronic form” is used. This term now has a very specific legal meaning, and it cannot be arbitrarily used to refer to any electronic manner of entering into a transaction.

Krzysztof Wojdyło, New Technologies practice, Wardyński & Partners