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Overview of electronic signature law and its legality in Iceland

Iceland began recognizing eSignatures as legally valid in 2001 with the passage of the Icelandic Act on Electronic Signatures. Electronic signatures are legal for general business transactions and are considered admissible in court. However, certain exceptions do apply, which we’ll look at more closely below.

Are electronic signatures legal in Iceland?

Yes, Iceland accepts electronic signatures on most general business contracts. According to the law, a handwritten signature is not required to validate most contracts. Verbal, electronic, and written agreements are considered legally valid, though additional evidence may be required.

Iceland has a tiered legal model, which means it recognizes a qualified electronic signature (QES) as a distinct type of signature. In Iceland, a QES is given the same legal status as a wet ink signature.

Overview of Iceland’s legal model

Iceland is technically considered a civil law system, though it’s legal model is a combination of civil law and common law. The country resembles a common law system when it comes to constitutional law, taxation, banking, and currency.

It operates under a civil law system in regards to property, contracts, and criminal law. Iceland’s legal model is similar to legal systems in the following countries:

Civil law system

Civil law systems originated in Europe and are based on a core set of principles. These systems rely on legal statutes that are continually updated and establish that country’s legal precedents.

Under a civil law system, judges have very little influence over the outcome of a case. A judge usually introduces the facts of the case and applies the applicable written statute. These statutes are not open to judicial interpretation.

The 3 different types of eSignatures

Iceland recognizes three different types of electronic signatures and allows different use cases for each one. Here is a brief overview of each type of eSignature:

  • Standard electronic signature (SES): This type of eSignature is usually typed or scanned. As such, there is no obvious feature that indicates who signed the document.
  • Advanced electronic signature (AES): An AES has an advanced signature that uniquely identifies the signer. This type of signature is usually uploaded or drawn.
  • Qualified electronic signature (QES): A QES is the most secure type of eSignature. It’s uploaded or drawn and comes with an electronic signing certificate for added security.

When is an SES appropriate?

A QES is considered the most secure type of signature, but that doesn’t mean it’s always a requirement. Here are some situations where an SES is appropriate:

  • HR documents
  • Software licensing agreements
  • Commercial agreements
  • Non-disclosure agreements
  • Intellectual property licenses
  • Most general consumer agreements

When is a QES required?

Icelandic law requires that a QES is used in the following scenarios:

  • Real estate transfers
  • Employment agreements
  • Employee terminations
  • Marriage contracts
  • Wills
  • Certain financial agreements

Can I use PandaDoc software to sign contracts in Iceland?

Yes, our electronic signature software complies with the eSignature laws in Iceland. With our software, you can create secure business contracts that will stand up in a court of law. You’ll receive an electronic signing document in situations where a QES is required.