Legality of eSignatures in Nepal

Background

Electronic signatures are rapidly transforming the document authentication landscape in Nepal and globally by introducing efficient and environmentally conscious methods that are gaining momentum. The shift from paper to digital signatures accelerates the completion of various dealings.

It is crucial to select an electronic signature tool that aligns with the nation’s legal stipulations, specifically the Electronic Transactions Act, for successful adoption in Nepal¹. This is to ascertain the legal validity of electronic signatures compared to their handwritten counterparts in Nepal. Despite the growing acceptance, it’s essential to recognize that some documents may still need a physical signature, and seeking legal consultation is advisable to navigate variable regional laws².

The importance of security surrounding electronic signature platforms cannot be understated. Services must integrate robust protection features such as data encryption, verification of signer identities, and provision of audit trails to deter wrongful access and guarantee document authenticity. For instance, BoldSign offers these imperative security features that comply with legal and security protocols.

Enterprises in Nepal must emphasize legal conformity, elevate security measures, and choose user-friendly platforms to integrate electronic signatures into their business frameworks. This approach boosts productivity and ensures the protection of their business exchanges.

Overview of the digital signature regulation

The operation of digital signatures in Nepal is governed by:

Electronic Transaction Act³
Electronic Transactions Rules⁴

A digital signature is an eSignature used to verify an electronic record. It is created by a person who has the original electronic record and the signer’s public key, using asymmetric cryptography. A digital signature helps determine⁵:

If the electronic record was signed using a private key that matches the signer’s public key.
If the original electronic record has been altered after it was signed.

Digital signatures are deemed to be valid for use in cases where there is a legal requirement for certification of information, records, or data by affixing a signature⁶.

A secure digital signature is designed so that, together with a security procedure, it can be verified that the signature is valid and non-altered in an electronic record⁷.

The scope and limitations of eSignature transactions

The use of electronic signatures is not legally recognized for all document types. Some transactions are appropriate for eSignatures, while others are not. Below is a brief analysis and a summary table of these transactions.

Documents that can be signed

Electronic signatures can be employed to affix signatures and provide countersignatures on a diverse array of documents, such as:

Legal opinions
Offer letters
Memoranda & internal correspondences
Non-disclosure agreements
Purchase orders
HR
Procurement
Employee onboarding, etc.

Exemptions

In limiting the scope of use of electronic signatures, the Act exempts transactions from the following regulations⁸:

Negotiable instruments
Deed of will, deed of mortgage, bond, deed of conveyance, partition, or any such deed on the transfer of the title in any immovable property.
Any other document which demonstrates title or ownership in any immovable property.
Power of Attorney, statement of claim, statement of defense, or any such other documents as may be used in court proceedings.
Statement of claim, counterclaim, statement of defense, or any such other document as may be submitted in writing in the proceedings of any Arbitration.

Summary

Permissible transactions	Exempted transactions
Legal opinions Offer letters Memoranda & internal correspondences Non-disclosure agreements Purchase orders HR Procurement Employee onboarding	Deeds Power of attorney Conveyancing Title documents Negotiable instruments Transactions in court or arbitration proceedings

How does BoldSign help

The following elements of compliance available within BoldSign can be used to comply with Nepal eSignature laws:

Secure and unique signing link: A secure and unique link to sign a document is sent directly to the signer’s email address. This ensures that the document is only accessed by the intended signer and cannot be tampered with.
Password protection: Senders can specify a password that needs to be entered before viewing and signing a document. This adds another layer of security to the signing process.
Audit trail: The IP address of the signer and timestamps for all significant events in the signing process are recorded in an audit trail. This provides a record of who signed the document, when, and where.
Digital signature: The final document is digitally signed with an AATL-compliant certificate. This ensures that the document cannot be tampered with without invalidating the signature.
Consent: Signers are asked to confirm their intent to sign electronically and informed that they could opt out. This ensures that the signer is aware of the implications of signing electronically and has given their consent.
Custom terms: Get your signers to agree to a custom set of terms. This can be useful to ensure additional security or that the signer understands the terms of the document.

Disclaimer: The information on this page is intended to help businesses understand the legal framework of electronic signatures for this particular country.

However, Syncfusion’s officers, directors, stockholders, affiliates, attorneys, accountants, employees, or agents cannot provide legal advice. You should consult your personal attorney regarding your specific legal questions. Laws and regulations are subject to frequent changes, and the information may not be current or accurate. To the maximum extent permitted by law, Syncfusion provides this material on an “as-is” basis. Syncfusion disclaims and makes no representation or warranty of any kind with respect to this material, express, implied, or statutory, including representations, guarantees, or warranties of merchantability, fitness for a particular purpose, or accuracy.

Syncfusion makes no warranties of any kind, including but not limited to the information or the product, whether express, implied, statutory, or otherwise. To the maximum extent permitted by law, Syncfusion disclaims all conditions, representations, and warranties, whether express, implied, or statutory, with respect to this information, without limitation of any implied warranty of merchantability, fitness for a particular purpose, accuracy, or currentness of this information.

Syncfusion nor its officers, directors, stockholders, employees, affiliates, attorneys, accountants, or agents shall be liable for indemnification, nor does this create an express or implied, contractual or statutory, equitable or otherwise, under this Agreement. The officers, directors, stockholders, affiliates, attorneys, accountants, or agents will not have any liability in any form.

¹Electronic Transactions Act, 2063 (2008) –https://nepaltradeportal.gov.np/resources/docs/The%20Electronic%20Transactions%20Act,%202063%20(2008).pdf
²Anna Nordén, ‘Electronic signatures in a legal context,’ in Cecilia Magnusson Sjöberg, editor, I.T. Law for I.T. Professionals – an introduction (Studentlitteratur AB; 2005) pp. 152-154;
³Electronic Transactions Act, 2063 (2008) – https://nepaltradeportal.gov.np/resources/docs/The%20Electronic%20Transactions%20Act,%202063%20(2008).pdf
⁴Electronic Transactions Rules 2064 (2007) – https://radiantca.com.np/assets/nav_file/Electronic%20Transaction%20Rules%202064.pdf
⁵S. 2 (o)
⁶S.5
⁷S.9
⁸S.77

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We’re using BoldSign successfully in our b2b SaaS platform - as it’s embedded to allow seasonal farm workers and their agribusiness employers to e-sign their employment onboarding documents for the first time. It’s part of the total solution saving the workers and HR managers 50% more time compared to their traditional pen/paper manual process.

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