Digital Contracts in Saudi Arabia: Legal, Secure, & Sign Agreements

Digital contracts are agreements concluded between two or more parties through electronic means, such as email, applications, e-commerce platforms, and other digital tools. These contracts differ from traditional agreements in their reliance on technology to document the parties’ consent, which may include digital signatures or electronic fingerprints.

Despite this, digital contracts in Saudi Arabia are governed by laws similar to those applicable to conventional contracts, while addressing specific requirements for authentication and legal validity. Consulting a skilled lawyer specializing in digital contracts, as they possess the technical and legal expertise to ensure that digital contracts comply with the legally recognized standards in the Kingdom.

What are The Digital Contracts?

Digital contracts are agreements concluded between two or more parties through electronic means, such as email, applications, e-commerce platforms, and other digital tools. These Digital contracts are governed by laws similar to those applicable to traditional contracts, while addressing specific requirements for contract authentication and the validity of digital signatures.

What sets Digital contracts apart is their reliance on technology to document the parties’ consent, which may include digital signatures or electronic fingerprints. Consulting a skilled lawyer in Digital contracts disputes in Madinah is essential, as they have the specialized expertise to understand these technical aspects and ensure that Digital contracts comply with the legally recognized standards in the Kingdom of Saudi Arabia.

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What are The Essentials of a Digital Contract?

It is not enough for a digital contract to merely reflect the parties’ will; this will must aim to create a legal effect. This requires the presence of offer and acceptance, where the offer is made first, followed by acceptance, whether the parties are together or communicating remotely via electronic means such as email or online platforms. The contract must maintain balance between the parties and allow them to review the subject matter to avoid disputes.

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Consent (Offer and Acceptance)

Offer: The first step in a digital contract, consisting of presenting the contract to the other party clearly and irrevocably. The offer can be withdrawn before acceptance unless a deadline is set. The offer must comply with consumer protection rules for remote contracts and include all essential contract elements.

Acceptance: Expresses the other party’s agreement to the offer and is made via electronic means such as digital signature, writing, clicking a consent button, or verbal acknowledgment in chat rooms. Acceptance must be explicit, final, and free from defects such as mistake, fraud, or coercion.

Capacity: Parties must have full legal capacity, being adults of sound mind capable of contracting legally.

Subject Matter

The subject matter of the obligation must exist or be capable of existence, be possible, specific, and compliant with Sharia, public order, and public morals. It should be clearly defined for both parties and legally transferable.

Cause

The cause is the purpose for entering the contract and the mutual obligations. It must exist, be lawful, and valid. If the cause is illegal or fictitious, the contract is void.

What are The Official Methods for Documenting Digital Contracts in Saudi Arabia?

• Ministry of Justice Documentation Platform (Najiz Portal)
  • Allows official registration of digital contracts electronically through the Najiz portal of the Ministry of Justice.
  • Mainly used for documenting real estate digital contracts, marriage contracts, and assignment agreements.
• Documentation Using the Certified Electronic Signature
  • Includes services such as “Tawqi’” from the Thiqah platform or “Elm,” which provide a digital signature certified by the Communications and Information Technology Commission (CITC).
  • Commonly used for digital contracts between companies, freelancers, and e-commerce stores, granting them legal validity and reliability.
• “Maqr” and “Muras” Platforms
  • Specialized in documenting commercial partnership digital contracts and partner agreements.
  • Provides an official tool for electronically registering obligations and agreements between business parties in a certified manner.
• Documentation Through Other Official Platforms
  • Includes platforms such as “Etemad,” “Madinty,” or “Moqawel.”
  • Considered semi-official documentation methods if the identity and date are verified, and are used to add an official touch to digital contracts outside the Ministry of Justice framework.

Digital Contract Signing

Digital contract signing is a symbol, number, or method used by a person to verify their identity in electronic transactions. The Electronic Transactions Law stipulates that an electronic signature holds the same legal validity as a handwritten signature, provided the following conditions are met:

• The signature is issued by the person themselves.
• It is directly linked to the contract or document.
• It can be verified and authenticated at a later time.

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What is The Difference Between Contracts and Digital Contracts?

The text can be converted into clear bullet points as follows:

• Execution Time: An electronic contract can be completed within a few days, whereas traditional contracts may take weeks or months.
• Security: Electronic contracts provide a high level of protection through two-step verification (OTP), audit logs, and digital certificates, while the security of paper contracts is comparatively lower.
• Cost: Electronic contracts are less costly as they do not require printing, sending, or storing paper documents, unlike traditional contracts, which incur additional financial burdens.
• Compatibility: Electronic contracts can be easily used across various platforms, whereas traditional contracts are limited to paper and pen.
• Environmental Impact: Electronic contracts reduce paper waste and carbon footprint, making them more sustainable compared to traditional contracts.

How to sign Contract Digitally?

In Saudi Arabia, electronic signatures are executed through a Digital Certification Certificate, which is an electronic document issued by a certification service provider to verify the identity of the holder of the electronic signature system and contains the signature verification data.

These certificates are issued by certification service providers, who are individuals or entities licensed to issue digital certification certificates or provide any related services in accordance with the Electronic Transactions Law.

Certification service providers are granted the necessary licenses to conduct this activity, with the ability to renew, suspend, or revoke these licenses through the Communications and Information Technology Commission under the Ministry of Communications and Information Technology. Additionally, the National Center for Digital Certification within the Ministry oversees all tasks related to issuing, managing, and supervising digital certification certificates.

Conclusion

Digital contracts provide a reliable legal framework for executing agreements remotely, offering significant advantages such as faster execution, enhanced security, lower costs, and reduced environmental impact compared to traditional contracts. Seeking guidance from a specialized law office, such as Etqan Law Firm, can help protect parties’ rights and ensure that digital contracts are executed in full compliance with Saudi Arabian law and Sharia principles.

The Etqan Al Mutamayza Law Firm is ready to provide the essential support you need. You can reach their team at the following mobile numbers: +966550600204, +966551020060.

Additionally, feel free to visit our branches located at:

• Jeddah: Al-Aziziyah District, Mohammed bin Abdulaziz Street (Tahlia)
• Riyadh: King Abdulaziz Street, across from the Kingdom Tower
• Dammam: Al-Ashri’a Street, Al-Badeea, Dammam 32415.

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