Given recent governmental measures to address the COVID-19 situation, we provide a summary of the main provisions that facilitate the continuance of business and commercial activities by using remote communication technologies, digital signatures, and digital checks.
- Remote communication technologies allow parties to participate and make decisions in shareholders and directors meetings, as well as convoking meetings. Likewise, remote communication technologies facilitate communication between partners and between partners and companies. Companies and partners can use any remote communication mean for the mentioned purposes as long as they follow the rules set forth in their company´s articles of incorporation and by-laws.
- Acts or events will be deemed as if they have occurred or been executed in companies´ domicile when remote communication technologies are used.
- E-contracting allows parties to enter into any transaction or contract provided that they do not affect third parties´ rights. Contracts executed by electronic means are recognized by Guatemalan legislation and are legally binding for parties.
- As per the Law of Digital Signatures and Communications (Ley para el Reconocimiento de las Comunicaciones y Firmas Electrónicas in Spanish), information communicated through digital means will be subject to the standard evidence rules. The following conditions will be considered when assessing the veracity of digital information: The reliability of the communication means used, the mechanism used to store the date, and the way in which the originator was identified. Notwithstanding this, the legal effects of digital communications will be determined by the rules applicable to the specific contract contained in the communication.
- If contracts or acts must be signed to comply with specific legal formalities or when there may be adverse legal consequences for not signing, this requirement will be fulfilled in digital communications when parties use a method to identify themselves and to express their intentions. Additionally, this requirement is met when parties use other means that are appropriate to the purposes for which the communication was made or when commercial practice shows that on its own or with the assistance of additional evidence, the mean can be used to identify the parties and their contractual intent.
- Digital signatures can be certified by a certifying entity and created through a secured signature creation device. Certified digital signatures will have the same legal probatory value as handwritten signatures. Digital signatures will be admitted as evidence before courts, and standard evidentiary rules will apply.
- The digital check and the truncation process are intended to adequate Guatemalan legislation to the new technics and forms used in modern financial systems and best international practice.
- In check truncation, banks receive a physical check for payment. Then, banks take a picture of the check and generate a digital check. The copy of the paid digital check has the same legal and evidentiary effects as physical checks.
We have a 24/7 service to address your legal queries related to the effects of COVID-19 in your company. Contact us through our Help Desk for immediate assistance at: [email protected]. Access to our Media Room for further information about legal aspects related to Coronavirus in Central America at this link.