Electronic signature plays a significant role in international commerce and business. Globally, organizations of all sizes rely on e-sign technology to get vital deals completed on a daily basis. If the relevant authorities could not guarantee the validity and legality of e signatures and online transactions, electronic commerce would most probably come to a grinding halt. Notably, this is the reason why lawmakers in various countries have made it a priority to come up with national e signature legislations. And Finland is not an exception.
Finland legally recognized electronic signature in 2009, when the Act on Strong Electronic Identification and e signatures was passed. After the eIDAS regulation was enacted in July 2016, these regulations and laws were standardized across all European Union (EU) member states. This means an e signature is legal to use in the majority of business settings in Finland. However, there may be a few exceptions depending on the nature of a transaction. But most importantly, electronic signatures are admissible in Finnish courts.
A summary of Finland’s legal model
Finland operates under a civil law system. A Civil law system is a legal arrangement or plan that originates from the Roman law. The system is based on the following core principles:
- There is a written constitution which preserves the rights of its citizen.
- Unlike the common law systems, there is a modest emphasis on judicial precedent. Only legislative enactments are deemed binding for all.
- In some civil law systems, e.g., Germany, legal scholars can have a significant influence on the courts.
- Courts under the Civil Law system are specific to the underlying codes – they are usually separate administrative courts, constitutional courts, and civil courts systems that operate on the consistency of legislation and regulatory acts.
The civil law system is commonly found in Africa, Europe, Central and South America, and many countries in Asia.
The legality aspect
Under Finnish law, a wet-ink signature is not necessarily needed for a contract to be termed as valid. Contracts are generally valid if legally competent parties come to an agreement, whether electronically, verbally, or on a paper document (Contracts Act Chapter 1 Sec 1). The EU Directive 1999/93/EC and EU Regulation No. 910/2014 specifies that an e signature shall not be denied legal status and admissibility as compelling evidence in court, solely on the basis that it’s in an electronic format.
What’s more, a qualified e signature shall have the equivalent legal standing of a written signature. At times though, to prove a contract is valid, parties have to present evidence in court. Most digital transaction management solutions can generate electronic records that are admissible in court under Chapter 17 Sec. 2 of Code of Judicial Procedure to support the authenticity, existence, and validity of a contract.
The eIDAS regulation
Like we mentioned earlier, the eIDAS regulation became active in July 2016 and instituted a legal framework for e signatures across the European Union. It defines three different types of e signs:
- Standard Electronic Signatures (SES);
- Advanced Electronic Signatures (AES);
- Qualified Electronic Signatures (QES).
In tiered legal structures like Finland, Qualified Electronic Signatures are given special legal recognition in certain types of transactions. In other words, many would argue, a QES is deemed to be more authentic than other electronic signatures. However, even the different types of e signs (SES and AES) can be presented in a legal environment if the parties involved can prove the signatures are valid.
When is a Standard e signature enough?
For Finland’s case, in the following situations, a standard e sign is appropriate, and a qualified e sign isn’t necessary:
- Consumer agreements, such as retail account opening documents, order confirmations, credit card accounts, software licenses, and sales terms.
- Intellectual property licenses, such as patents, copyrights, trademarks, and other intangible property transfers
- Certain real estate documents, such as commercial and residential lease agreements, purchase, and sales contracts.
- HR documents, including employment contracts, benefits paperwork, Non-Disclosure Agreements (NDAs), employee onboarding paperwork, but excludes termination notices.
Instances where an e signature isn’t appropriate
Electronic signature isn’t appropriate on occasions where specific requirements state otherwise. Below are a few instances where a wet ink signature would be necessary:
- Signing share certificates
- Documents that must be notarized
- Employee termination letters
- Signing issue certificates
- Employee termination letters
- Documents which transfer the rights to a property or asset
- Certain corporate certificates or documents
Can eSign Genie software be used in Finland?
You can use our platform to carry out nearly all kinds of business transactions, and the e-documents associated with it, are admissible in Finland’s courts of law. Conveniently, our diverse library of contract templates will also make it easy for you to create different types of electronic forms and contracts. And once you are finished, the software allows you to type, draw, or upload your signature to new agreements, effortlessly. Learn more about what eSign Genie can do for you here.
DISCLAIMER: The information in this eSign Genie blog is for general purposes only and is not meant for companies to use as legal advice. Please confer with your attorney for legal consultation for your location and specific use cases.