eSignature Legality in Iceland

E-Signature Legality Summary

Under Icelandic law, a written signature is not necessarily required for a valid contract - contracts are generally valid if legally competent parties reach an agreement, whether they agree verbally, electronically or in a physical paper document. To prove a valid contract, parties sometimes have to present evidence in court. Leading digital transaction management solutions can provide electronic records that are admissible in evidence under Icelandic law (Article 44 of the Icelandic Act on Civil Procedure No. 91/1991), to support the existence, authenticity and valid acceptance of a contract.

The stated objective of Icelandic Act  NO. 28/2001 (the "Act") was "to provide for the legal effect of electronic signatures".  The provisions of the Act are similar to eIDAS in that the Act defines "electronic signatures", "Advanced Electronic Signatures (AES)" and Qualified Electronic Signatures ("QES").

An "Electronic Signature" is defined as "data in electronic form which are attached to or logically associated with other electronic data and which are used to authenticate the origin of the latter data" (The Act, Article 3.1).  An AES is an electronic signature "uniquely linked to the signatory"  (The Act, Article 3.2) and a QES is and AES supported by a "qualified certificate" and "created using a secure signature-creation device"  (The Act, Article 3.3). 

Notable Changes in E-Signature Law Since 2020

None. 

Documents That May be Signed Electronically

Use cases where an electronic signature other than SES may be required include:

• QES - contracts to purchase or transfer real estate (Article 7 of Act 40/2002 on Real Estates)

• QES or handwritten - Residential Lease Agreements (Article 4 of the Icelandic Rent Act No 36/1994)

• QES - employment agreements (based on Bargain Collective Agreements (implementing EU Directive 91/533/EBE, Act No 35/1985 etc.)

• QES - termination of employment agreements (Article 1 of Icelandic Act No 19/1979 Respecting Labourers’ Right to Advance Notice of Termination of Employment etc.)

• QES - wills (Article 40 of the Icelandic Inheritance Act No 8/1962) and several other applications and legal acts on the basis of that same Act

• QES - marriage settlement or contracts (Article 80 of the Icelandic Act in Respect of Marriage No 31/1993)

• QES - memorandum of association for companies, such as public limited companies (Article 3 of the Icelandic Act No 2/1995 on Public Limited Companies)

• QES - request for a financial reorganization, composition with creditors or bankruptcy proceedings (Article 6 of Icelandic Bankruptcy Act No 21/1991), and certain other measures in relation to such proceedings such as filing of claims

• QES - request for deprivation of legal competence (Article 8 of Act No 71/1997 on Legal Competence)

• QES - subpoenas and defense statements in civil and criminal cases (Act No 91/1991 on Civil Procedure and Act No 77/2008 on Criminal Procedure)

• QES - insurance contracts, notice of termination etc. (Article 15 of the Icelandic Insurance Contracts No 30/2004)

• QES - import declarations (in certain instances), request for binding classifications, opinion from the customs etc. (Icelandic Customs Act No 88/2005)

• QES - tenancy agreements (Article 8 of the Icelandic Tenancy Act No 80/2004)

• QES - Data Processing Agreements between controllers and processors (Article 13 of the Icelandic Data Processing Act No 90/2018)

Further Guidance

Use cases that are specifically barred from digital or electronic processes or that include explicit requirements, such as handwritten (e.g. wet ink) signatures or formal notarial process that are not usually compatible with electronic signatures or digital transaction management.

• Formal notarization - real property transfer contracts and deeds

• Formal notarization - residential lease agreements

• Formal notarization - certain contracts associated with family law, including wills, and marriage contracts and contracts of inheritance

• Formal notarization – articles of incorporation of a company with limited liability

• Handwritten - employment contracts
  

[1] An AES is an “advanced electronic signature”, a type of electronic signature that meets the following requirements: (a) it is uniquely linked to the signatory; (b) it is capable of identifying the signatory; (c) it is created using means that are under the signatory’s sole control; and (d) it is linked to other electronic data in such a way that any alteration to the said data can be detected.

[2] A QES is a specific digital signature implementation that has met the particular specifications of a government, including using a secure signature creation device, and been certified as ‘qualified’ by either that government or a party contracted by that government.