What Is an eContract? Latest Regulations, Signing Process, and Legal Validity

Amid the rapid acceleration of digital transformation, electronic contracts are gradually replacing traditional signing methods due to their ability to facilitate faster contract execution, enable convenient document storage, and meet legal requirements. However, many businesses and individuals still have questions about what an electronic contract is, whether it has the same legal validity as a paper contract, how to sign an electronic contract, and which regulations must be followed. This article provides a comprehensive explanation of these matters while examining common types of eContract, the signing process, their legal validity, and key considerations to help businesses implement them effectively in their management and commercial operations.

What Are the Current Regulations on eContracts?

eContract are legally recognized in Vietnam and have the same legal validity as paper contracts, provided that they meet the requirements prescribed by the laws on electronic transactions and other relevant sector-specific regulations. Therefore, the key consideration is not whether a contract exists in paper or electronic form, but whether its formation, authentication, and storage processes comply with applicable legal requirements.

To gain a clearer understanding, it is first necessary to examine the nature of eContracts and the conditions under which they become legally valid and enforceable in practice.

What Is an eContract?

An electronic contract (eContract) is a contract that is created, sent, received and stored as a data message through electronic means.

In essence, it is still an agreement between the parties to establish, amend or terminate civil rights and obligations. The main difference is that the contract is presented electronically rather than on paper.

Compared with traditional contracts, eContracts have several key characteristics:

• They are created in an electronic environment.
• They can be signed remotely without requiring the parties to meet in person.
• They are easier to store, search and manage.
• They can be integrated with enterprise management systems such as ERP or HRM platforms.

eContracts are now widely used for employment contracts, commercial contracts, service agreements, sales contracts and both B2B and B2C transactions.

Do eContract Have the Same Legal Validity as Paper Contracts?

Yes, eContracts have the same legal validity as paper contracts when they fully meet the conditions prescribed by law. The legal validity of a contract does not depend on whether it is printed on paper or stored as electronic data. Instead, it depends on whether the contract conclusion process is lawful.

A valid eContracts must meet conditions such as:

• The contracting parties have full legal capacity.
• The contract content does not violate any legal prohibition.
• The signing process clearly reflects the voluntary agreement of the parties.
• The authentication method complies with applicable regulations, such as the use of an electronic signature or digital signature where required.
• The data is properly stored and can be retrieved when needed for verification or dispute resolution.

In practice, many businesses use electronic contracts to sign agreements with employees, customers and partners. This helps shorten document-processing time, reduce printing costs and improve management efficiency.

What Conditions Must an Electronic Contract Meet to Be Legally Valid?

For an eContracts to be legally valid, businesses must meet both legal and technical requirements.

• First, the contract must include all necessary terms applicable to the specific type of transaction. For example, an employment contract should include information about the job, salary, working hours and employee benefits. A commercial contract should clearly identify the subject matter, contract value and responsibilities of the parties.
• Second, the authentication method must be capable of verifying the identity and intention of the signatory. This is why electronic signatures and digital signatures play an increasingly important role in modern transactions.
• Third, the entire data message must be securely stored, protected against unauthorized alteration and remain accessible when requested by regulatory authorities or relevant parties.

Understanding the legal requirements is only the first step. Businesses should also understand the different types of electronic contracts and how they are applied in specific situations so that they can select the most appropriate form.

What Are the Most Common Types of Electronic Contracts?

There are three common categories of eContracts: electronic employment contracts, electronic commercial contracts and electronic civil or service contracts. These contracts are classified according to the purpose of the transaction and the parties involved. Understanding each type helps businesses choose the appropriate signing method and comply with relevant legal requirements.

After understanding the concept and legal validity of electronic contracts, businesses should examine the contract types commonly used in management and commercial activities.

What Is an Electronic Employment Contract?

An electronic employment contract is an employment contract concluded as a data message through electronic means. It has the same legal validity as a paper employment contract when it meets all conditions prescribed by law.

In essence, this type of contract still establishes an employment relationship between an employer and an employee. The difference lies in how the contract is signed and stored. Instead of printing the contract, obtaining handwritten signatures and storing physical documents, businesses can create the contract on a digital system, send it to the employee for online signing and store it electronically.

Electronic employment contracts offer several benefits:

• Shorter employee onboarding time.
• Lower printing and document-storage costs.
• Easier contract searching, updating and version management.
• Integration with HRM systems to manage the entire employee lifecycle.

Electronic employment contracts are particularly useful for businesses with multiple branches or nationwide recruitment operations because contracts can be completed quickly regardless of location.

What Is an Electronic Commercial Contract?

An electronic commercial contract is a contract concluded through electronic means for commercial activities such as the sale of goods, provision of services or business cooperation between the parties.

Unlike electronic employment contracts, electronic commercial contracts are mainly used for transactions between businesses, known as B2B transactions, or between businesses and customers, known as B2C transactions.

The contract usually includes:

• The subject matter of the transaction.
• The contract value.
• Payment terms.
• Delivery or service-provision conditions.
• The rights and obligations of the parties.
• Dispute-resolution provisions.

The growth of digital commerce has made electronic commercial contracts increasingly common in industries such as e-commerce, logistics, software, technology services and finance.

Who Can Be a Party to an Electronic Commercial Contract?

The parties to an electronic commercial contract include organizations or individuals that have the legal rights and capacity to enter into the agreement.

There are generally three main groups:

• Businesses: The most common parties, participating as sellers, buyers or service providers.
• Individuals: Individuals may participate as consumers or legally registered business operators.
• Intermediary organizations: These include e-commerce platforms, transaction platforms and authentication service providers that support the contract conclusion and implementation process.

Each party has its own rights and obligations and is responsible for fulfilling its commitments throughout the contract term.

Correctly identifying the type of electronic contract and the participating parties is the foundation for selecting an appropriate signing method. The next important question is how to sign an electronic contract in compliance with regulations while ensuring its legal validity.

After understanding the different types of electronic contracts, users are generally most concerned about the practical process: how to sign an electronic contract quickly while still ensuring legal validity. The following section explains the standard implementation process used by businesses.

How Can Businesses Sign Electronic Contracts in Compliance With Regulations?

A compliant eContracts signing process consists of four main steps: preparing the contract, authenticating the parties, signing electronically and storing the completed contract. These steps help ensure that the transaction is legally valid and easy to manage. Businesses need more than an electronic contract file. The entire contract conclusion process must comply with applicable legal requirements.

The following section explains each step in detail.

Standard Electronic Contract Signing Process

There are four steps to signing an electronic contract in compliance with regulations.

Step 1: Prepare the Contract Content

The business prepares a contract containing all necessary provisions, such as:

• Information about the parties.
• Rights and obligations.
• Payment or salary terms.
• Contract duration.
• Termination and dispute-resolution provisions.

Standardizing contract templates helps reduce errors and speeds up the signing process when a business needs to execute contracts with multiple employees or customers.

Step 2: Authenticate the Parties’ Identities

After the contract is created, the parties must be authenticated before signing.

Depending on the specific transaction, authentication may be completed through:

• A system account.
• A one-time password, or OTP.
• An electronic signature.
• A digital signature.
• Other authentication methods permitted by law.

This step helps prove that the signatory is the actual party entering into the contract.

Step 3: Sign the Contract Electronically

After authentication, the parties sign the contract through an electronic platform.

The system records information including:

• The signing time.
• The signatory.
• The document version.
• The transaction log.

As a result, the entire signing process is recorded and can be reviewed when necessary.

Step 4: Store and Manage the Contract

After the signing process is completed, the contract must be securely stored for management and retrieval purposes.

An effective contract-management system should support:

• Fast contract searches.
• Version management.
• Access control.
• Revision-history tracking.
• Contract retrieval during inspections or dispute resolution.

For businesses managing large numbers of contracts, centralized storage can significantly reduce processing time and operating costs.

What Is the Role of an Electronic Signature in a Contract?

An electronic signature is a method used to confirm the signatory’s identity and intention in an electronic environment.

It is one of the key elements that helps an electronic contract receive legal recognition.

The main functions of an electronic signature include:

• Verifying the signatory’s identity.
• Demonstrating agreement with the contract content.
• Reducing the risk of a party denying the transaction after signing.
• Improving security and verifiability.

In practice, many businesses also use digital signatures to provide a higher level of authentication and integrate with enterprise management systems, electronic invoicing platforms or employee-record systems.

It is important to note that not every signature placed on a PDF file or every image of a handwritten signature is considered a legally valid electronic signature in all circumstances.

Its legal validity depends on the authentication method and the regulations applicable to each type of transaction.

Can Electronic Contracts Be Signed Remotely?

Yes. Businesses can sign eContracts remotely when the contract conclusion process properly authenticates the parties, records their intention and stores the data message in accordance with legal requirements.

This is one of the reasons electronic contracts have become widely used for:

• Recruiting employees in different locations.
• Signing contracts with overseas partners.
• Supporting remote or hybrid working arrangements.
• Conducting commercial transactions through digital platforms.

Instead of spending several days printing, delivering and manually signing documents, businesses can complete the entire process within minutes while significantly reducing operating costs.

The signing process is only one part of electronic contract implementation. In practice, many businesses still question whether electronic contracts are truly more effective than paper contracts and which format they should choose. The next section examines this issue.

What Are the Differences Between Electronic Contracts and Paper Contracts?

Both eContracts and paper contracts can be legally valid when they comply with applicable regulations. However, electronic contracts offer significant advantages in processing speed, management capability and digital integration. Paper contracts may still be suitable for certain traditional transactions or businesses that have not yet adopted digital transformation. The appropriate format depends on the company’s size, management needs and operating strategy.

After understanding the electronic signing process, businesses should assess the advantages and disadvantages of each contract format before making a decision.

Comparison Between Electronic Contracts and Paper Contracts

From a management perspective, eContracts and paper contracts differ across several important criteria.

Criteria	Electronic Contract	Paper Contract
Format	Electronic data	Paper document
Signing method	Online signing	In-person signing
Processing time	A few minutes	May take several days
Storage	Electronic and easy to search	Physical document storage
Sharing	Immediate	Requires copying or physical delivery
Version management	Easy to track	Difficult to control
Cost	Lower over the long term	Includes printing, delivery and storage costs

This comparison shows that electronic contracts do not change the legal nature of a transaction. Instead, they change how businesses manage the entire contract lifecycle.

For example, a company recruiting 300 employees per year may need thousands of printed pages and many hours of HR administration to print, sign and store paper contracts. An electronic process allows the entire workflow to take place through one centralized system.

However, paper contracts may still be appropriate in situations where the parties are not ready to use electronic methods or where the transaction must follow a traditional process.

Should Businesses Transition to Electronic Contracts?

Yes. Businesses should transition to electronic contracts when they want to improve management efficiency, reduce operating costs and accelerate digital transformation. There are at least three important reasons for this transition.

First, electronic contracts save time.

The process of creating, sending, signing and storing contracts can be completed quickly without printing or delivering physical documents. This is particularly beneficial for businesses with multiple branches or organizations recruiting employees across different locations.

Second, electronic contracts improve document management.

All contracts can be stored centrally in one system, allowing HR and Legal teams to:

• Search for contracts by employee or partner.
• Track revision history.
• Manage contract expiry dates.
• Control access based on user roles.

As a result, businesses can significantly reduce the risk of lost documents or the use of incorrect contract versions.

Third, electronic contracts support comprehensive digital transformation.

Electronic contracts can be integrated with HRM, ERP and other enterprise management systems. This creates an end-to-end process covering recruitment, onboarding, employee-record management, performance evaluation and contract termination or liquidation.

However, the transition involves more than replacing a paper contract with a PDF file. Businesses must establish appropriate processes, select a suitable platform and standardize contract templates to maintain consistency across operations.

Once a business decides to implement electronic contracts, another important question is what information should be included in an electronic contract template and what should be considered when creating and storing the contract.

Key Considerations When Creating and Storing Electronic Contracts

Creating a legally compliant contract is only the first step. Businesses must also manage and store contracts correctly to ensure that they can be retrieved and used as evidence when necessary.

Key considerations include:

• Standardizing templates for each type of contract.
• Managing document versions to prevent the use of incorrect files.
• Assigning access rights based on user roles.
• Storing contracts centrally rather than distributing them through email or personal computers.
• Tracking revision history and signing time.
• Establishing regular data-backup mechanisms.

A common mistake among businesses is storing multiple versions of the same contract or sending contracts through email without a centralized management system. This makes it difficult for HR or Legal teams to locate documents and determine which version is the final legally effective contract.

As a company grows, it may need to manage thousands of contracts each year. Manual contract management not only increases operating costs but also creates significant compliance and information-security risks.

How Can Businesses Effectively Manage Electronic Contracts?

Effective electronic contract management involves more than online signing. It covers the entire process of creating templates, obtaining approvals, storing documents, controlling access and retrieving information through one centralized system.

This is a modern management approach that helps businesses reduce manual work and strengthen data control. After understanding contract templates and the signing process, businesses should establish a comprehensive management system to maximize the benefits of electronic contracts.

Common Legal Risks When Signing Electronic Contracts

Common risks include:

• Failing to authenticate the correct signatory.
• Using contract templates that have not been standardized.
• Lacking appropriate data-storage and retrieval mechanisms.
• Failing to manage document revision history.
• Applying unclear access permissions that may lead to unauthorized changes.

These errors may create difficulties when businesses need to resolve disputes or conduct internal document reviews.

Managing Electronic Employment Contracts With HRM Software

When integrated into an HRM system, an electronic employment contract is no longer an isolated document, it becomes part of the employee’s entire lifecycle.

Businesses can:

• Automatically generate contracts using employee data.
• Synchronize information when employee details change.
• Manage contract terms and expiry dates.
• Track signing and approval history.
• Share documents based on access permissions.
• Connect contracts with attendance, payroll and employee-record data.

As a result, HR teams no longer need to manage multiple disconnected files or track signing status through email.

SunFish HR – Manage Electronic Contracts and the Entire Employee Lifecycle on One Platform

For businesses seeking a professional electronic contract management solution, SunFish HR enables the complete digitalization of the process, from template creation and approval to document signing, storage and management through one integrated HRIS platform.

With SunFish HR, businesses can:

• Apply digital signatures directly through the system and mobile application, allowing documents to be approved anytime and anywhere.
• Centrally manage contracts and documents with flexible access permissions and convenient search functions.
• Use smart templates that automatically populate employee data and optimize the contract-creation process.
• Integrate all HR functions on one platform, including attendance, payroll, benefits, training, recruitment, OKR management, employee performance evaluation and workforce analytics.

Instead of managing hundreds or thousands of contracts manually, businesses can establish a modern, transparent operating process that is ready to support their digital transformation journey.

Contact the SunFish HR team for advice on a comprehensive human resource management solution tailored to your organization’s operating model.