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With the development of different technological solutions and the ever-growing need for faster and more efficient transaction processes and less paperwork, companies are increasingly searching for ways to simplify and digitalize their contracts signing and documentation handling. Relying on general terms and conditions (“GTCs”) gains relevance in this respect. In Serbia, however, in view of the prevailingly rigid courts, one of the main challenges of this digitalization process lies in finding an efficient, but at the same time a legally certain way, to validly contract one’s GTCs.
Legal framework
To be considered validly agreed upon and binding, according to the Serbian Law on Contract and Torts (“LCT”)[1], (i) GTCs must be published in a customary manner (eg, attached to an agreement or published on a website) and (ii) GTCs must be known or should have been known by the other contracting party at the time of entering into an agreement.
Acceptance by electronic signature
Most commonly, GTCs are annexed or referred to in an agreement by stating that the GTCs are applicable to the agreement and that by signing the agreement, the other party accepts the application of the GTCs. The question becomes how to achieve this effect with less paperwork and no wet ink signatures.
A digital equivalent of a wet ink signature is a qualified electronic signature, which is by virtue of the Serbian Law on Electronic Documents, Electronic Identification and Trust Services in Electronic Business[2] explicitly given the same legal effect as a wet ink signature, thus creating the presumption of authenticity.
Other forms of electronic signatures include a simple electronic signature (eg, typically a pdf scan of a wet ink signature) and advanced electronic signatures (such as DocuSign). These types of electronic signatures are not equated with a wet ink signature and do not enjoy the presumption of authenticity the way the qualified electronic signature does. Yet, they do represent and can be used as a valid (but rebuttable) evidence of a party´s acceptance of the relevant GTCs or other terms.
Agreements are deemed concluded if the other party has accepted their terms explicitly (eg, by sending an email acknowledging acceptance) or implicitly (eg, by paying the pro-forma invoice). Most commercial agreements do not have to be concluded in written form to be valid and binding and in such cases wet ink signing or use of qualified electronic signatures is not necessary (but is desirable to secure evidence of an agreement and its content in case of a dispute).
Compared to this, for the GTCs to be binding on the parties they only need to be published and referred or communicated to the other party. This generally means that there should be no doubt about the validity of the GTCs that are included in, attached to, or referred to in the agreements validly concluded by using the above presented forms of electronic signatures.
Tacit acceptance
Tacit acceptance of GTCs is also possible. For example, GTCs that are referred to in a pro-forma invoice or on an on-line ordering platform are deemed validly agreed upon and binding if the customer paid the invoice or submitted the purchase order via the platform, provided that the application of the GTCs was clearly stipulated in the invoice or the on-line ordering platform.
Additional considerations
Depending on the industry and the nature, complexity, and frequency of the parties’ interactions, several further considerations should also be noted.
GTCs often contain provisions for which specific rules on form are prescribed. For instance, an arbitration clause is deemed valid only if agreed in writing or alternatively, if the communication between the parties enables written evidence of the parties’ agreement on the arbitration clause. This therefore requires that customer’s acceptance of the GTCs can be retrieved and verified in writing – for example that the customer’s clicking of the “I accept the GTCs” button can be retrieved.
GTCs must be modifiable and their modifications must be easy to administer. The following measures are advisable in that respect: GTCs should foresee the possibility of modifications; GTCs should not require that amendments be done in writing; GTCs could prescribe that any future amendments will be deemed accepted if not objected by the other party within a certain time period or if the other party maintains the business relationship by, for example, sending out an order.
In case of online sales, special provisions of the Serbian Law on Electronic Commerce[3] regulating online services are applicable. Before the conclusion of an agreement, service providers must provide potential users with information and notices about the GTCs and ensure that the provisions of both the agreement and the GTCs are made available to users in a way that allows for their storage, reuse and reproduction.
Comments
Using GTCs and the described options of paperless contracting is possible and advantageous. Companies should however be mindful to establish procedures for the contracting of the GTCs that avoid the flagged risks and ensure a streamlined and efficient transaction process.
[1] Zakon o obligacionim odnosima ("Sl. list SFRJ", br. 29/78, 39/85, 45/89 - odluka USJ i 57/89, "Sl. list SRJ", br. 31/93, "Sl. list SCG", br. 1/2003 - Ustavna povelja i "Sl. glasnik RS", br. 18/2020).
[2] Zakon o elektronskom dokumentu, elektronskoj identifikaciji i uslugama od poverenja u elektronskom poslovanju ("Sl. glasnik RS", br. 94/2017 i 52/2021).
[3] Zakon o elektronskoj trgovini ("Sl. glasnik RS", br. 41/2009, 95/2013 i 52/2019).
