eSignature Legality in Japan

E-Signature Legality Summary

The Act regulates the use of electronic signatures generally. There is an implementing ordinance that establishes criteria for certification businesses, and an enforcement order that governs the terms of validity for certification businesses.

In Japan, national law applies throughout the country. Local governments can set forth local rules in relation to their local administrative matters, but the effect of such local rules must be within the national law set forth by the central government.

Types of Electronic Signature

An “electronic signature” means a measure taken with respect to information that can be recorded in an electromagnetic record (a record that is prepared by an electronic form, a magnetic form or any other form not perceivable by human senses and that is used for information processing by computers), and which falls under both of the following requirements:

• A measure to indicate that such information was created by the person who has taken such measure, and
• A measure to confirm whether such information has been altered.

Japan also supports Accredited Certification Businesses (“ACBs”), which can “place on an electronic certificate, etc. (which means an electromagnetic record prepared for certifying that matters used to confirm that the user has performed the electronic signatures are pertaining to such user), a mark to the effect that such business has obtained the accreditation.”

Documents That May be Signed Electronically

To create a binding and enforceable contract under Japanese law, except for the limited type of contracts discussed below, it is not legally required for the contract to be in writing or signed. However, it is common in Japan to create a contract in writing and electronically sign and/or affix a company seal/stamp to it in order to provide proof of the parties’ intent to enter into the contract.

Regarding the use of electronic signatures, the following categories typically do not impose any requirements on the use of electronic signatures:

• HR
• Procurement
• Corporate Resolutions
• NDAs
• Software Licensing
• Healthcare
• Banking
• Real Estate
• Lending
• Chattel Paper
• Insurance
• Education
• Life Sciences
• Technology sector
• Documents to notarized
• Documents to be Recorded
• Consumer Transactions
• Government Filings (depends the type of document).

Further Guidance

Under Japanese law, contracts can be executed not only for hardcopy documents with wet signatures, but also electronic documents with electronic signatures. However, some laws or regulations still require executing contracts in the form of hardcopy documents.

An electromagnetic record (except for those drawn by a public official in the exercise of his official functions), will be presumed to be authentic if an electronic signature:

1. is based on proper control of codes and objects necessary to perform the signature such that only that person can substantially perform, and
2. is performed by the person in relation to the information recorded in the electromagnetic record.

If an electronic signature does not meet such requirements, and its validity is challenged, the party seeking to enforce the electronic signature may need to provide further evidence to support the authenticity of the electronic signature. Such evidence may take the form of the method of authenticating the signer, evidence that the document was rendered tamper-evident and had not been altered, or an audit log detailing all actions taken by the signer during the transaction.