An electronic contract or digital contract is an agreement made through an electronic system. This definition is contained in Pasal 1 No. 17 of the UU ITE. In other words, Pasal 1 No. 17 of the UU ITE is the legal basis for this electronic contract.
Yes, electronic contracts are considered valid as an agreement according to the meaning of “agreement” stated in Pasal 1313 of KUHPer.
What is the validity of electronic contracts?
The validity of electronic contracts is regulated in Pasal 46 paragraph (2) of Government Regulation No. 71 of 2019 concerning the Implementation of Electronic Systems and Transactions (PP PSTE). A contract is considered valid if it fulfills certain conditions, such as:
There is an agreement between the parties
Performed by legal subjects who are capable or authorized to represent in accordance with the provisions of the law
There are certain things as transaction objects
The object of the transaction must not conflict with laws and regulations, decency, and public order
What are the different types of electronic agreements?
There are four types of electronic agreements that are often used in Indonesia:
1. Shrink-wrap Contracts
This electronic contract is usually an agreement with software that is installed via a CD. The term shrink-wrap is used because the contract is enclosed in a wrapper that must be ripped off before use.
2. Clickwrap Contracts
Before installing the software, clickwrap contracts are often displayed. The content is quite long which requires you to scroll down and click “I agree” or “I agree” for the installation to continue.
3. Browse-wrap contracts
4. E-Contract Email
As the name suggests, an e-contract email is a contract that uses email as the medium. Usually, it takes the form of an exchange of messages between the parties that results in an agreement at the end of the conversation.
What are the benefits of electronic contracts?
Here are some of the benefits of electronic contracts over traditional contracts:
Electronic contracts offer various conveniences that traditional contracts do not have. It’s easier to change the contents of the contract because you can do it directly with a computer. In addition, electronic contracts can also be stored in the cloud so you can access them anywhere.
Electronic contracts do not require you to print them. You can directly send the contract to the related parties without printing it.
You can easily edit an electronic contract at any time, so if there is an error, you can fix it right away.
As mentioned above, electronic contracts can be made remotely. This means that the manufacturing process can be completely done online. So, it can save you time because you don’t have to meet in person and go through traffic jams that are time-consuming.
What is the purpose of contract management?
Contract management aims to ensure that each party involved in a contract fulfills its contractual obligations after and during the administration period, as well as contract execution.
Everything that is managed related to the agreement between the parties involved in the contract is called contract management.
What are electronic contracts used for?
Sales: Keeps the team focused on sales by eliminating repetitive and manual administrative tasks.
HR: Digital contracts increase employee productivity by enabling them to access electronic documents anywhere.
Finance: Ability to share sensitive information securely with a seamless paperless experience.
Legal: Ability contracts can send, manage, and monitor all confidential information related to law instantly and securely