Enforceability of contracts executed by using electronic means in Armenia

1) Is a contract legally enforceable if the parties exchange scanned copies of signed documents by email?

Yes, under the legislation of the Republic of Armenia, a contract may generally be legally valid if the parties exchange scanned copies of the signed contract by email. The mere exchange of scanned copies does not invalidate the contract, provided that the parties’ intention to enter into the contract and the authenticity of the documents can be established. However, certain types of contracts may require notarization, state registration, or another special form, in which case exchanging scanned copies alone may not be sufficient.

2) What requirements must be met for an electronic signature to be considered valid and legally binding?

For an electronic signature to be considered valid and legally binding, its authenticity must be verified, meaning that the verification of the electronic signature must positively identify the signatory. In addition, there must be no sufficient evidence that the electronic document was altered or forged after it was transmitted or stored. Where these requirements are satisfied, an electronic document protected by an electronic digital signature has the same legal effect as a document bearing a handwritten signature. 

3) Can a contract be executed entirely electronically without a paper original?

A contract may be executed entirely electronically without a paper original, provided that the requirements applicable to electronic documents and electronic digital signatures are satisfied. The original of an electronic document exists on an electronic medium, and identical copies of the electronic document are considered originals and have equal legal effect.

4) Are contracts and agreements concluded through online platforms or mobile applications legally enforceable?

Under Armenian law, contracts and agreements concluded through online platforms or mobile applications may be legally enforceable. A contract may be concluded through an electronic platform, website, mobile application, or similar means by performing a clear action aimed at concluding the contract. It must be possible to verify the authenticity of the electronic data, properly identify the contracting party, and ensure that the contract can be retained and reproduced without alteration.

5) How can a party prove in court that an electronic document was actually signed by a particular person and that its content has not been altered?

Proof of the authenticity of the signature and the integrity of the document’s content in court may be established through the following methods:

• verification of the signature certificate: providing data from an accredited certification authority;
• cryptographic integrity verification: demonstrating that the content of the file corresponds to the data secured by the electronic signature. Any alteration to the document automatically invalidates the electronic signature;
• appointment of a forensic technical examination: an official forensic examination of the file and its software metadata to verify the integrity of the file and the authorship of the signature;
• use of electronic document management systems or government platforms: if the document was signed through official secure government or corporate systems that record timestamps and logs, the relevant system log files and timestamps may be submitted to the court.

6) Can a contract be considered validly executed if one or both parties sign it using a facsimile signature?

Yes, a contract may be considered concluded if one or both parties have signed it using a facsimile signature. In this case, it is important that both parties have agreed to the use of the facsimile signature. In other words, the use of a facsimile signature does not, in itself, deprive the contract of legal effect if the parties have agreed to its use. If there is no such legal basis, signing the contract by facsimile may be challenged as non-compliance with the requirements for the written form of the transaction. 

7) In what circumstances does the law require a specific form of signature or a paper original despite the possibility of executing the contract electronically?

The legislation of the Republic of Armenia allows the conclusion of contracts in electronic form. However, there are exceptions where the law strictly requires either a qualified electronic signature or a physical paper original. These cases include:

• transactions requiring notary certification, for example real estate sale and purchase, mortgages, wills. These require a paper original or the physical presence of the parties before a notary;
• labor relations: the conclusion, amendment, or termination of employment contracts in electronic form is permitted only if the official electronic signature;
• documents containing secrets: certain contracts involving state or banking secrets strictly require physical paper procedures.

8) What risks should businesses consider when using electronic methods to execute and sign contracts?

When using electronic methods to conclude and sign contracts, businesses need to consider several key categories of risks.

• legal risks are associated with the possibility of challenging the validity of the contract or signature, as well as non-compliance with the legally prescribed form of the transaction;
• security risks include transferring electronic signature keys, ID cards, or passwords to third parties, as well as documents being signed by employees who exceed their authority or whose authority has already expired;
• technical risks may arise from changes to the content of a document, loss of files, or failures of electronic platforms;

Litigation and evidentiary risks relate to the need to prove who actually signed the document, whether its content was altered, and how the transaction was concluded, using electronic records, system logs, metadata, or computer forensics.

9) Which types of contracts cannot safely be executed entirely electronically?

Transactions that require mandatory notarization, state registration, or a specific form prescribed by law cannot be safely concluded entirely electronically. These include, for instance, real estate gift agreements, family and inheritance agreements, prenuptial agreements and agreements on the division of marital property, annuity and lifelong maintenance agreements, and agreements for the transfer or pledging of business interests.

10) Who bears the risk if an account or electronic signature is compromised and a third party signs the contract?

The risk of an electronic signature being used by a third party primarily relates to the signatory’s obligation to safeguard the electronic signature means and prevent their use by others. If a third party uses them, the owner must prove that this occurred without their knowledge or consent. If it is established that the third party unlawfully gained access to the electronic signature or account, and the owner promptly reported the incident and took the necessary security measures, liability may be attributed to the third party.

Author: Ani Hakobyan