Jurisprudence on signing with a one-time identifier

We remind you that an electronic signature with a one-time identifier is data in electronic form in the form of an alphanumeric sequence, which is added to other electronic data by the person who accepted the offer (offer) to conclude an electronic contract, and is sent to the other party to this contract ( Article 1 of the Law on electronic commerce" ).

An electronic contract signed with an electronic one-time identifier is considered to be concluded in writing from the moment of its signing, i.e. maintaining an alphanumeric sequence of data (password). At the same time, such an agreement is considered concluded if the parties have reached an agreement on the essential terms of the agreement.

According to Art. 638 of the Civil Code of Ukraine , the contract is concluded if the parties have reached agreement on all essential terms of the contract. The essential terms of the contract are the terms of:

- scope of the contract

- conditions defined by law as essential or necessary for contracts of this type

- as well as all those conditions on which an agreement must be reached at the request of at least one of the parties.

Given the specifics of concluding such electronic contracts, judicial practice in this area has its own peculiarities.

We offer to consider some interesting judicial practice related to the signing of an electronic transaction with an electronic one-time identifier.

Jurisprudence on signing with a one-time identifier

Regarding the conclusion of a credit agreement in electronic form

On June 14, 2022, the Supreme Court, as part of the panel of judges of the Second Judicial Chamber of the Civil Court of Cassation, considered case No. 757/40395/20 (proceedings No. 61-16059св21), dismissed the cassation appeal of PERSON_1, and left the decisions of the first and appellate courts unchanged.

In this ruling , the Supreme Court stated:

"According to the circumstances established in this case, the disputed contract between the parties was concluded in electronic form, with the use of an electronic signature. At the same time, PERSON_1, through his personal account on the defendant's website, submitted an application for obtaining a loan under conditions that he considered convenient for himself and confirmed the conditions for obtaining a loan by pressing the corresponding button, after which "Equifin Ukraine" LLC sent the plaintiff a one-time identifier in the form of an SMS code, which the plaintiff used to confirm the signing of the credit agreement.

Having established that without receiving an SMS message, without logging into the company's website using the login and password of the personal account, the credit agreement between the plaintiff and the defendant would not have been concluded, the court of first instance, with the conclusions of which the appellate court agreed, reasonably believed that the conclusion of the credit agreement of the contract in the proposed form corresponded to the internal will of the plaintiff, this transaction, in accordance with the Law of Ukraine "On Electronic Commerce", is considered to be equivalent in terms of legal consequences to a contract concluded in writing...".

( Decision of the Supreme Court dated 14.06.2022 in case No. 757/40395/20 )

On January 12, 2021, the Supreme Court, as a member of the panel of judges of the First Judicial Chamber of the Civil Court of Cassation, considered case No. 524/5556/19 (proceedings No. 61-16243 St. 20), dismissed the cassation appeal of PERSON_1, and left the decisions of the first and appellate courts unchanged .

In this ruling , the Supreme Court stated:

"The electronic contract is concluded and executed in accordance with the procedure provided for by the Civil and Economic Codes of Ukraine , as well as other legal acts. An electronic contract concluded by exchanging electronic messages, signed in accordance with the procedure specified in Article 12 of this Law , is considered to be legally equivalent to of an agreement concluded in writing. Each copy of an electronic document with a signature affixed to it, defined in Article 12 of this Law, is the original of such a document. An electronic agreement is considered concluded from the moment the person who sent the offer to conclude such an agreement receives a response about the acceptance of this offer in according to the procedure defined by part six of this article. The response of the person to whom the offer to conclude an electronic contract is addressed about its acceptance (acceptance) can be given by: sending an electronic message to the person who made the offer to conclude an electronic contract, signed in the manner provided for in Article 12 of this Law ; filling out the application form (form) on the acceptance of such an offer in electronic form, which is signed in accordance with the procedure provided for in Article 12 of this Law ; taking actions that are considered acceptance of an offer to conclude an electronic contract, if the content of such actions is clearly explained in the information system in which such an offer is placed, and these explanations are logically related to it ( Article 11 of the Law of Ukraine "On Electronic Commerce" )....

...The purpose of signing the contract is the need to identify the signatory, confirm the signatory's agreement with the terms of the contract, as well as confirm the integrity of the data in electronic form.

If there is an electronic form of the contract, then it must be signed with an electronic signature...

...Not every electronic legal agreement requires the creation of a separate electronic contract in the form of a separate electronic document. An electronic contract can be concluded in a simplified form, or classically - in the form of a separate document.

An electronic signature, a one-time identifier, is data in electronic form in the form of an alphanumeric sequence, added to other electronic data by the person who accepted the proposal (offer) to conclude an electronic contract, and sent to the other party to this contract.

This is a combination of numbers and letters, or only numbers, or only letters, which the applicant receives by e-mail in the form of a password, sometimes in the "login-password" pair, or an SMS code sent to the phone, or in another way.

When placing an order made under a login and password, an electronic document is created, in which the person who created the order is indicated using the information system (website of the online store).

... The courts, having established the factual circumstances in the case, on which the correct resolution of the dispute depends, correctly applying the norms of material law, reached a well-founded conclusion that the contested financial loan agreement was signed by the plaintiff using a one-time identifier password, i.e. with proper and admissible evidence the conclusion of the disputed deed between the parties is confirmed. Without receiving a letter to the e-mail address and/or SMS message, without logging in to the company's website using the personal account login and personal account password, the credit agreement between the plaintiff and the defendant would not have been concluded. The parties have reached an agreement on all essential terms of the deed, which refutes the arguments of the cassation appeal in this part...".

( Decision of the Supreme Court of January 12, 2021 in case No. 5 24/5556/19 )

On February 9, 2023, the Supreme Court, as part of the panel of judges of the Cassation Administrative Court, in case No. 640/7029/19 (proceedings No. К/9901/35352/19) satisfied the cassation appeal of Galaxy Financial Company LLC, the decision of the court of first instance and the decision of the appellate court the court canceled and passed a new resolution on the satisfaction of the claim.

In this ruling , the Supreme Court stated:

"... the panel of judges considers it necessary to pay attention to the fact that the principle of the legal force of an electronic transaction is most fully reflected in the requirements for the form of the transaction. This is confirmed by the legal norms established at the level of international documents: the first part of Article 8 of the Convention of the United Nations Organization on the use of electronic communications in international agreements - a communication or contract cannot be rendered invalid or enforceable solely on the grounds that it is made in the form of an electronic communication; Article 5 of the Model Law on Electronic Commerce of the United Nations Commission on International Trade Law - information cannot be deprived of legal force, validity or legal protection only on the grounds that it is drawn up in the form of data communication. A similar provision is contained in the first part of Article 8 of the Law of Ukraine "On Electronic Documents and Electronic Document Management " : the legal force of an electronic document cannot be denied solely because it has an electronic form....

...the panel of judges notes that the loan agreements dated 07/24/2018 N 18421, dated 08/28/2018 N 24380, dated 09/08/2018 N 26487, dated 10/12/2018 N 31949, dated 11/26/2018 N 40258 were signed by the borrowers using a one-time wow password of the identifier, that is, the conclusion of transactions between the parties is confirmed by proper and admissible evidence. Without receiving a letter to the e-mail address and/or SMS message, without logging in to the company's website using a personal account login and personal account password, loan agreements between borrowers and lenders would not have been concluded.

Similar conclusions were reached by the Supreme Court in the resolutions dated 03/23/2020 in case No. 404/502/18 (proceedings No. 61-8449св19); from 09.09.2020 in case No. 732/670/19 (proceedings No. 61-7203св20), from 12.01.2021 in case No. 524/5556/19 (proceedings No. 61-16243св20), from 28.04.2021 in case No. 234/7160 /20 (proceedings No. 61-2903св21), dated 10.06.2021 in case No. 234/7159/20 (proceedings No. 61-18967св20), dated 18.06.2021 in case No. 234/8079/20 (proceedings No. 61-2904св21), dated 12.08.2022 in case No. 234/7297/20 (proceedings No. 61-11504св21)...".

( Decision of the Supreme Court of February 9, 2023 in case No. 640/7029/19 )

So, it can be seen that the legal practice has developed in the field of concluding loan agreements.

Offer your customers to sign documents with a one-time identifier and you will receive:

1. arranged signed legally significant documents from your clients, for example, consent to the processing of personal data, acceptance of the terms of providing your services, etc.
2. ordered customer register
3. access and the ability to work with documents anywhere and at any time
4. the possibility of losing documents is excluded
5. Your managers will spend less time on processing documentation with the client

Call +38 (093) 1776558 (Aleksii) for details