Navigating the Digital Marketplace: e-contract formation in Bahrain

clicking a button or checking a box, as mentioned above. Other e-contracts require more sophisticated authentication methods for accepting the contract (i.e., using electronic signatures through platforms such as DocuSign and the likes). The legal landscape in Bahrain requires the parties to comply with certain legalities which are discussed further below.

Benefits of e-contracting

Compared to traditional paper contracts, e-contracts offer several advantages that can benefit businesses in the digital marketplace. For example, e-contracts can reduce transaction costs, especially for high-volume agreements, by eliminating the need for printing, mailing, and storing paper documents. E-contracts can also speed up the contracting process by allowing quick electronic sending and signing of documents. They could potentially enhance the security and privacy of the contract data by using both digital and physical security measures. Moreover, e-contracts can contribute to environmental sustainability by reducing paper use and waste.

However, e-contracting also poses some legal challenges and risks that need to be addressed. One of the main challenges is ensuring the validity, enforceability, general legal compliance of e-contracts. Therefore, it is important for businesses to be aware of the applicable laws and regulations in their jurisdictions and the jurisdictions of their counterparts.

Legal landscape in Bahrain

Different jurisdictions may have different laws and regulations that affect the validity and enforceability of e-contracts and electronic signatures. In Bahrain, e-contracts are governed by the Electronic Communications and Transactions Law (Decree Law No. 54 of 2018, as amended) (“ECTL”), which applies to all transactions and documents of all types, was enacted in 2018 to facilitate the development of the digital economy and promote legal certainty for electronic transactions.

Different jurisdictions may have different laws and regulations that affect the validity and enforceability of e-contracts and electronic signatures. In Bahrain, e-contracts are governed by the Electronic Communications and Transactions Law (Decree Law No. 54 of 2018, as amended) (“ECTL”), which applies to all transactions and documents of all types, was enacted in 2018 to facilitate the development of the digital economy and promote legal certainty for electronic transactions.

The law recognises the validity and enforceability of e-contracts, as long as they meet certain conditions for the reliability, data integrity, and security of electronic information. The ECTL also provides for the legal recognition of ‘electronic signatures’ (defined as data in electronic form used to identify the signatory and indicate their intention), provided that these are (i) ‘reliable’ in the circumstances; and (ii) proven in fact to have fulfilled the function of identifying the signatory and indicating their intention/acceptance.

The law outlines factors to consider when determining the reliability of an electronic signature method, such as the regularity of system audits, the existence of declarations regarding the method’s reliability, and the security of the system used. Trust service providers accredited in Bahrain (i.e., having received accreditation status from the Telecommunications Regulatory Authority) benefit from presumptions of reliability under the ECTL.