Digital technology is gaining greater acceptance across different fields. There’s no doubt it is changing the way we relate and do business. With several innovations becoming more dynamic and forceful, it will be very hazardous to swim against the tide. The best means to remain relevant is to stay afloat in the digitized marketplace. Therefore, many countries have pushed forward to make the use of electronic signatures legal on digital documents. In this regard, Japan is among the first countries to allow for the use of electronic signatures on valid legal documents. Doing this has ease documentation within Japan for the past two decades.

  1. Why eSignature is important
  2. eSignatures and legal provisions in Japan
  3. Is eSignature legal in Japan?
  4. Uses cases for electronic signature
  5. Use cases that are not suitable for Electronic signatures
  6. Local technology framework
  7. Validation of Electronic Signatures
  8. Electronic Contracts in Japan
  9. Summary and conclusion

Electronic Signature in Japan

Why eSignature is important

An electronic signature in Japan is a crucial tool for digital transaction management. Several companies ranging from SMBs to Multinational corporations are adopting eSignature to accelerate workflows and digitize existing processes. A lot of people still question the legality of utilizing electronic signatures in a different part of the World.

Within the last few months, there has been an astronomical increase in the use of digital media for business operations, including documentation and validation with electronic signatures in Japan. More than ever, it has become critical for more countries within the world to accept the use of electronic signatures as more individuals and organizations are opting to work through online media.

eSignatures and legal provisions in Japan

Japanese law recognized electronic signature since 2000 when the eSignatures and Certification Business Act was passed into law. This law has paved the way for the active usage of digital signatures in Japan, especially as the country has always been technologically advanced and oriented. The nation’s legal framework is a remix of the Anglo-American legal systems and the Roman civil law. Civil laws govern some aspects such as property, family relations, contract, succession, and criminal law, while the principles and the statues of the standard law extraction are pronounced in aspects such as procedure, constitutional law, taxation, corporations, labor relations, insurance, banking, and currency. The basis of the Japanese civil law systems is on the ancient Roman law. This is distinguishable based on their dependence on combining some set of rules, as well as principles that are codified and readily available for citizens and legal luminaries. Those codified laws are constantly revised to reflect the prevailing environment with a strong emphasis on civil law nations. The revision process is crucial as it ensures fair use of these processes for all parties involved.

Is eSignature legal in Japan?

A written signature is not a necessity for a valid agreement or contract in Japan. The only exception is if the contract or agreement is subject to any statutory form conditions. Therefore, this makes the Japanese legal system quite flexible and accommodates different strands of individuals. Contracts are valid if the parties reach a consensus, whether verbally, electronically, or using a physical document such as a paper. The E-signature law in Japan sees electronic signatures as one of the means of sealing a contract or entering into agreements. This also includes the requirements for the presumption of legal affirmation. To ascertain the validity of a contract, parties may need to provide evidence in a court of law. Generally, the courts in Japan have holistic discretion in the admittance and the evaluation of evidence. As such, digital or electronic documents that are affixed with electronic signatures are usually considered valid, just like physically signed documents. A top-notch digital tool for managing transactions is very crucial to produce electronic records that are tenable as evidence in the court. It also goes a long way to support not only the existence but the authenticity, as well as the valid acceptance of the contract. Therefore, any individual who decides to affix an electronic signature on a digital or electronic document should ensure that they make use of the appropriate tools, which adhere to standards and rules as stipulated by the law of the land.

Uses cases for electronic signature

These are some examples where eSignature is usually suitable: HR documents like new employee onboarding processes and benefits documentation.

  • Commercial contracts between corporate organizations, plus NDAs, sales agreements, procurement documents.
  • consumer agreements such as new retail record opening papers.
  • Some real estate papers-sales and purchase agreements, general lease contracts, and related papers for commercial and residential real estate.
  • Intellectual Property Transfer agreements.

Use cases that are not suitable for Electronic signatures.

Specific conditions like handwritten (wet ink) signatures or formal notarial procedure which are not compatible with eSignatures or for the management of digital transactions are barred from an electronic method in Japan. Formal notarization includes voluntary guardianship contracts, testamentary files(civil code), specific fixed tenure real estate lease contracts, and some particular government filings within the jurisdiction of a power of attorney. In general, many countries, including Japan, are considering the possibility of expanding the use of electronic signatures on these exceptions as the change in circumstances on the world stage has forced many of these activities to be conducted via online media.

Local technology framework

Japan accepts the idea of independent accreditation for signatures made by an accredited certification body. The responsibility of accrediting qualified digital certificate vendors, also known as Specified Certification Business, is laid on the government ministries. This system makes the creation and use of electronic signatures in Japan easy and straightforward as the entire process is decentralized, which is usually more efficient.

Additionally, since the use of electronic signatures is mostly skewed towards business dealings between two or more organizations, significant requirements have been captured within the Japanese Electronic Signature Act of 2000. As a result, all documents appended with electronic signatures must be checked to verify that the information from within was generated by the right signatory. Also, care must be taken to ascertain the integrity of the data to prevent corruption of information via transmission. All these requirements are usually fulfilled by the Specified Certification Business Unit within the Japanese Government.

Concerning international use of information of owners of electronic signatures, the law allows for the storage of data outside the country. Nonetheless, such storage is defined by the country’s Information Protection Law.

Validation of an Electronic Signature

There are specific criteria for an electronic signature to be valid in Japan. These requirements are:

  • The owner of the electronic signature must append their signature while understanding what they are doing.
  • The information on which the electronic signature is appended must be known to the signatory.

Additionally, it is also worth knowing that in Japan, the legal process recognizes the difference between an electronic signature and a digital signature (certificate-based). This essential distinction accounts for acceptance and enforcement of the two types of signatures. Nonetheless, the law necessitates the need for authentication of signatures using private and public keys. This requirement made the rollout of digital signatures easy and straightforward.

A digital signature is an advanced form of an electronic signature that is also used within Japan. This type of signature is typically utilized for everyday governmental documentation. Just like with an electronic signature, Japanese law requires documents to follow the strict authentication process. Likewise, documents appended with digital signatures are accepted in a court of law.

Electronic Contracts in Japan

At the core of electronic contracts in Japan is the electronic signature. This type of signature serves as formal consent from all the parties involved. Luckily, in the country, the creation of a contract is easy and straightforward. However, strict procedures exist to protect customers from exploitation by companies during electronic transactions. As a result, the law ensures that consumers reconfirm offers to ensure a fair transaction at all times. Additionally, the law protects companies from the carelessness of consumers as long as contracts are signed through the established procedure.

As a result, two conditions must be fulfilled to establish an electronic contract. The first is that clients must unambiguously comprehend what type of transaction they are partaking in while clicking an agreement button on a webpage. Secondly, the terms of the contract must be simple, and apparent for the consumer to peruse. These two conditions, if met establish an electronic contract. The process of clicking and agreeing with the terms of the contract serves as the electronic signature.

Consumers are usually given leeway to withdraw consent within a limited window of time. However, this is usually based on the discretion and the requirements of the business. In most cases, clients are given a few days during which the contract may be canceled.

Summary and conclusion

As a technologically progressive country, Japan has been at the forefront of the advancement in digital development and the use of digital documents right from the get-go. Over the years, the law had been redefined to ease the use of legal electronic signatures. In addition, the country subscribes to a tiered method of authenticating virtual signatures. It permits both digital and electronic signatures. Electronic signatures are legally accepted, and they are enforceable within the Japanese law. However, for such electronic signatures to be valid on a digital document, such a signature must be generated following specific guidelines. Notwithstanding, not all documents can be affixed with an electronic signature for validation. Some documents require physically written signatures for validation. Additionally, the decentralized nature of the accreditation of an electronic signature within Japan makes the use of electronic signatures and documents simplified.