With the rapid expansion of telework due to COVID-19, the digitization of business processes is also accelerating. In addition to ICT tools for communication and collaboration such as cloud storage and web conferencing, electronic contracts are also attracting increasing attention recently. The easy-to-understand reason for this is to solve the ridiculous reality of having to push a stamp to go to work. It’s for By digitizing contract work based on paper and stamps, an increasing number of companies will rush to create an environment in which contract work can be carried out with customers and business partners even during telework.
The above is not the only advantage of establishing a mechanism for electronic contracts and electronic seals, but first, what is an electronic contract in the first place? I will explain the basic part. If you are interested in electronic contracts, please refer to it.
What is an electronic contract?
In normal contract work, the person in charge on both sides affixes their names and seals (or only affixes their seals) to the paper-based contract, which serves as proof of the conclusion of the contract.
On the other hand, an electronic contract is a contract that is created digitally with the electronic signature and time stamp of the person in charge. And receive a time stamp, and finally, it will be stored on cloud storage or file server.
Electronic signature and time stamp
An electronic signature is a signature issued by a government-approved certificate authority to prove that the contract was created by the person in charge. This has the effect of denying the possibility that the contract has been falsified or falsified and strengthening the legal effect.
The timestamp is the same information attached to the contract, and at the time when the time stamp is stamped, “the existence of the document (existence proof)” and “the document has not been tampered with (non-tamper proof)” ” is the role.
Can a contract be verbal?
As an aside, did you know that a business contract can be concluded without a written contract? In fact, if both parties verbally agree to “do this”, the contract is deemed to have been concluded at that point.
Why create a contract? Even if a contract is concluded only verbally, human memory is ambiguous, and it does not remain as a reliable record. In addition, it may develop into a big problem later in the company. Therefore, in order to prevent troubles later on regarding the content of the contract, it is common to create a contract and to reach a mutual understanding before the contract is concluded.
In other words, even if you need a contract to avoid trouble, you don’t need a stamp. In fact, the Cabinet Office, the Ministry of Economy, Trade and Industry, and the Ministry of Justice have jointly explained that the Japanese government can confirm that the document is not a forgery if it can prove how the document was created even if it does not have a seal.
So are electronic signatures and timestamps really necessary in electronic contracts? develops into a discussion. In this regard, unlike a paper contract, it is considered an essential element to make the contract legally enforceable.
Contracts created as digital files can be easily altered by parties or third parties. Even if the contract was mutually agreed at the time of the contract, it is easy to create a contract that is different from the agreed content due to falsification later. That is why it is necessary to prove that “the contract was definitely drawn up by the parties at the time” by means of electronic signatures and time stamps.
Electronic contract law
The introduction of electronic contracts requires an understanding of the relevant laws. Here are three representative laws.
Electronic Book Preservation Law
This is the law that provides the basis for recognizing the validity of electronic contracts. The official name is “Law Concerning Exceptions, etc. for Preservation Method of National Tax-Related Accounts and Documents Created Using Computers”. Historically, it was enacted in July 1998 as a law that allowed “electronic storage of national tax-related books and documents” when computers were spreading to general households.
e-document law
In order to make the Electronic Book Preservation Law more practical, this law incorporates the digitization of national tax-related books, which have been required to be preserved in paper form. Enforced in April 2005, it allows “digitization by scanner”, which was impossible until then.
electronic signature law
This law was enacted for the purpose of establishing a legal basis and information infrastructure for proving non-falsification of contracts, etc., using the aforementioned electronic signature and time stamp technologies. The official name is called “Law Concerning Electronic Signature and Certification Business”.
Is it possible to cut the revenue stamp fee with an electronic contract?
One of the merits of introducing electronic contracts that you should know is that “cutting revenue stamps” is widely recognized. Revenue stamps, as you know, are given to contracts in contracts that reach a certain amount. Revenue stamps have a long history, appearing in Japan in 1873. In 2005, then Prime Minister Junichiro Koizumi responded to a question by Sakurai, a member of the House of Councillors of the 162nd Diet, as to why.
“Stamp tax is based on the fact that it is presumed that there are economic benefits behind documents prepared in connection with economic transactions and that the preparation of documents clarifies the facts of transactions and stabilizes legal relationships. It is a document tax that requires a light burden on a wide range of documents—”
Since the cost of revenue stamps can be reduced, there is a great advantage to electronic contracts alone. By the way, the cost of revenue stamps is stipulated in Article 2 of the Stamp Tax Law, and a stamp tax of 200 yen will be charged for general merchandise transactions of 50,000 yen or more and less than 1,000,000 yen. In addition, the “contract that forms the basis of continuous transactions” costs a flat fee of 4,000 yen regardless of the amount specified, so it is an amount that cannot be ignored for companies with many transactions. By the way, the answer above also says:
Electronic contracts essential for business efficiency
Electronic contracts are now becoming essential for companies aiming for complete telework. As mentioned above, even at companies that were forced to work from home due to the spread of the new coronavirus infection, there were many employees who came to work only to stamp their stamps. In modern society, the time, effort, and efficiency required for paper-based contracts are becoming a major problem. Also, from the perspective of work style reform, the use of paper is regarded as one of the major issues and causes. It goes without saying that business will accelerate if contract work is digitized and streamlined. Why don’t you take this opportunity to consider electronic contracts?
