In addition to facilitating the provability of facts and statements, recording the declarations in writing is also a condition of validity in many cases, so its significance is undeniable. When we think of a writing format the first thing to come to mind is hand-signed documents. However, since the development of technology, various digital solutions, such as electronic signatures, e-mail or SMS, have become more and more widespread. However, the question is whether these modern solutions really meet the criteria for writing. Given that this is a relatively recent and constantly evolving issue, to which we can find different answers in each area of law, we will explore this topic in a series of articles, what may be interesting to all market player. In this article we will present the legal basis of writing and find out in which cases it is mandatory. We will then go around what are the challengers of the "traditional" written form due to modernization. And finally, we present which areas of law we will examine in detail in our series.
1. Legal basis of writing
When can we talk about the written format?
Writing is an aspect related to the formality of declarations and, in many cases, a requirement.
By formality we mean in what form the statement appears to the outside world, in what form it is recorded and how it can be recalled later.
Based on the Hungarian law the formality of the statement may be
- written (e.g. signed contract)
- oral (e.g. order something from the waiter)
- implicit conduct (e.g. handing money to the bus driver, nodding, etc.)
As to when a statement considered to be written, it is necessary to start with the provisions of the Civil Code[i]. The basic principles laid down in the Civil Code apply in relation to most areas of law, except where we find different or supplementary rules in relation to the given area of law (such as labour law).
According to the Civil Code, the essential content of a legal statement must be in writing[ii], and it shall be signed by the declarant[iii] in order to meet the requirement of written format.
The Civil Code states that, in addition to the above, the declaration shall be deemed to be in writing even if it
- ensures the unchanged recall of the content of the statement, AND
- allows the identity of the declarant to be established, AND
- allows the date of making the statement to be determined.
Based on the above it is important that, from a legal point of view, a written form is not the same as recording something in a readable form (e.g. a text message), the statement must also certify who made the statement. This means a signature or other certification of the declarant.
When is the written format mandatory?
Both law and an agreement between the parties may require that a particular statement can be made only in a specific form. This usually means excluding statements made by implicit conduct, or even oral statements, and requiring a written format.
The legislation includes several cases where the parties do not have the opportunity to choose, since the statement can only be made validly in writing. It is mandatory to put in writing, for example, the real property sale and purchase contract, the penalty clause or, for example, the request for payment addressed to the debtor in connection with liquidation proceedings.
It could also happen that written format is compulsory not by law, but by agreement of the parties. It obviously has practical reasons, since it is easy to prove the existence or content of a written statement (if we have the document), whereas it is much more difficult to reconstruct an oral statement, for example, witnesses often forget, remember poorly, or have inconclusive testimony.
2. Forms of writing
As we have seen above, in many cases it is necessary to make a legal statement in writing. The question is whether a communication that is considered written in the ordinary sense (e.g. email, messenger, sms) qualifies as a written statement from a legal point of view.
Past - Paper and Pen
In the past, it was easier to decide whether a statement was written, since written communication was mostly on paper, which, if it contained the essential content of the statement and the signature of the declarant, could be considered written without discussion.
Present - The rise of technology
However, advances in technology have opened a lot of new opportunities to make statements, and today, instead of pen and paper, most people communicate electronically.
The range of these new solutions is endless, just think of a message sent via e-mail or SMS, or a signed and scanned or even electronically signed document sent through them.
However, these innovations have been the subject of widespread debate, as they are able to transform the traditional system of written communication in a few years, which has developed over thousands of years. Furthermore, as we will see below, we find different positions not only between individual countries, but also between certain areas of law in one country.
3. Point of views regarding to certain digital solutions
Attempt at unification – eIDAS Regulation[iv]
Naturally, the EU has recognised the need to develop a unified position regarding to digital solutions. However, this only provides guidance on digital identification and electronic signatures, and does not apply to the most common everyday solutions such as e-mail or other text messages, e.g. WhatsApp, SMS, etc.
The Regulation divides electronic signatures into three categories:
- simple electronic signature
- advanced electronic signature
- qualified electronic signature
With regard to simple signatures (e.g. signatures drawn on a screen), the Regulation stipulates that its legal effect and admissibility as evidence shall not be denied in legal proceedings solely on the grounds that it is in an electronic form or that it does not meet the requirements for qualified electronic signatures. However, since it does not prove that it actually originates from the person authorized to sign the document, in many cases it is not considered legally appropriate (e.g. when concluding contracts).
Advanced electronic signatures, which meet the requirements of the Regulation (e.g. they can only be linked to the signatory), are accepted in more cases. Where public administrations in EU Member States provide an online service with such a signature, it must also be accepted in the other Member States. [v]
However, only qualified electronic signatures have the equivalent legal effect of a handwritten signature, which has an additional requirement compared to an advanced electronic signature that a qualified trust service provider[vi] issues a so-called qualified certificate as part of the document.
Differences between countries
Although the Regulation specifies how Member States shall judge the types of electronic signature, as countries use electronic signatures through different service providers, in practice it can be difficult to use a foreign document.
In addition, the Regulation does not provide assistance for documents arriving from outside the EU, so we will have to wait for a globally uniform electronic solution.
We often receive an e-signed document from costumers from the United States in a form that we have not seen before, so its authenticity is questionable for us, even though it is quite possible that it was issued by a fully accepted service provider there.
Differing perceptions between different areas of law
As to the question of which of the electronic ways of communication qualifies as written format in the legal point of view, different positions have emerged not only between individual states, but also between the individual areas of law in Hungary.
Based on the judicial practice, we can see, for example, that there is a stricter perception in civil law and that judges are more likely to decide that the electronic document must contain at least an advanced electronic signature to achieve written format.
On the other hand, in the field of labour law, we can find more permissive jurisprudence and the absence of a written form does not usually cause the invalidity of a statement that can only be made in writing if the legal declaration obviously originated from the employer and there is no doubt as to its reality.
4. Examination of e-writing in each area of law
In the following parts of our series, we will try to explore the individual areas of law to get a comprehensive picture of the perception and current situation of electronic writing in Hungary.
As mentioned above, the aspects contained in the Civil Code serve as guidelines for all areas of law, so in the next article we will examine civil law.
We then present the special rules and the most important judicial practice in the following areas of law in separate articles:
Part III – Management of claims
Part IV – Company law
Part V – Labour law
Section VI - Dispute resolution
We recommend following our series to all participants in business life, as the legal compliance of electronic communications is an issue which has effect to the enforceability of contracts, the outcome of litigation and the result of disputes related to employment relationships.
[i] Act V of 2013 on the Civil Code
[ii] Section 6:7 (1) of the Civil Code
[iii] Section 6:7 (2) of the Civil Code
[iv] Regulation (EU) No 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market
[v] If they established by using formats defined by the Commission or with reference methods when alternative formats are used. Article 27 (1) and (5) of the Regulation
[vi] Organisations that take responsibility for the electronic identification of signatories and for the issuance of e-signers and other electronic certificates (such as time stamps) using effective authentication technologies.