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Digital contract management

in practice

Digital contract management

Due to the current pandemic, which has been waging since spring 2020, and the restrictions on contact associated with this, many companies have become aware of the practical relevance of digital or contactless contracts. As a result, it is no wonder that the demand for software in this area is growing rapidly. 

Most companies and private individuals still associate the preparation and conclusion of contracts of any kind with a physical document, with the original copy signed by all the parties involved. However, there have been different providers of e-signature procedures up to the conclusion of contracts via blockchain for quite some time. Indeed, contract management does not stop even after the contract has been drawn up and signed. In most cases, the contract needs to be managed continuously throughout its term, for example, to manage ongoing payments and benefits. As a result, the digitisation of contracts does not end with the digital signature on the contract document. In addition, entrepreneurs, in particular, can gain a number of advantages by using digital contracts and comprehensive contract management systems. 

The creation of a central contract database, which enables all of a company’s contracts to be accessed with a single click, as well as automation-supported analysis for the improvement of future contract processes, are just a few of the many other advantages. In summary, it allows every single business process to be automated to an even greater extent than has been the case in most companies to date. However, the digitisation of contracts also brings an array of benefits for private individuals. For example, the smartphone app ‘pia – Prove It All’ enables every private individual to create and conclude contracts and minutes on their smartphone in a simple, legally compliant manner, using blockchain time certification. In any case, it is to be expected that the current COVID-19 pandemic and constantly advancing technology will lead to a larger and more comprehensive range of digital contract management software being available in the future. 

Data protection 

However, as soon as contract documents contain personal data and are stored in digital form (and are, by extension, also processed automatically), they are generally subject to the application of the GDPR, unlike physical, paper-based contract documents. In this context, the rules and regulations of the GDPR must therefore be observed in each instance. This includes, inter alia, the mandatory requirement of a processing base according to art. 6 GDPR. In particular, the transparency and information obligations under art. 12 and 13 GDPR and the general principles under art. 5 GDPR should also be mentioned. However, these are merely some of the legal provisions of the GDPR and do not represent an exhaustive list by any means. 

Austrian legislators have already reacted to this trend, too, enacting the Signature and Trust Services Act (Signatur- und Vertrauensdienstegesetz, SVG). This law regulates all the provisions concerning electronic signatures and electronic seals. In practice, the qualified electronic signature according to section 4 para. 1 SVG, which fulfils the legal requirements pertaining to written form, is particularly important. 

A qualified electronic signature has, in principle, the same effect as a handwritten signature. Consequently, it is therefore also suitable for replacing signatures that would normally be given in the course of signing a contract. Exceptions to this rule include testamentary dispositions and notarial certifications or notarial acts.

Author:

Mag. DANIEL SÖLLNER, Associate at LANSKY, GANZGER + partner

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