How Can E-contracts Release Opportunities for Post-COVID Business Recovery?

The global economy has been severely affected by the outbreak of the COVID-19 epidemic since 2019. Delivery services have shut down temporarily, and employees must work from home due to lockdowns. Businesses are getting worse and face unprecedented challenges in performing their contractual duties.

As a leading provider of electronic signature and electronic contract cloud platform, Fadada is committed to providing enterprises, governments, and individuals with services, including digital electronic contract signing and management services. This article will focus on how Fadada’s electronic contract solution will help enterprises recover from the epidemic.

1. What are the differences between paper and electronic contracts?

If your company uses traditional paper contracts, you need to keep the contracts somewhere, such as filing cabinets, which will either be costly to maintain or occupy office spaces. Every contract your business handles daily will require a complicated process from drafting to finalization. Moreover, it will take your employees time to print, file, and locate the document whenever needed. If the contract needs to be sent somewhere, the cost and time it takes to mail it to the right person will only increase. And there are risks of losing the contracts or faking the signature in the process.

Compared to physical contracts, electronic contracts allow businesses to revolutionize how they perform contractual duties cost-effectively and time-efficiently.

An electronic contract or e-contract refers to “an agreement formulated online. The parties interact with one another in a digital format, rather than in-person or over the phone.” Since everything is created online, an e-contract is time-efficient and transparent. The same contract will be accessible by all parties via a digital device. As a result, there is no need to negotiate in person or send the document back and forth for revision. Moreover, companies will save a lot on printing and storing paper documents. Most importantly, e-contracts are legally binding in many countries, including China, the United States, Europe, India, etc.

2. Fadada’s electronic contracts solution

By leveraging blockchain, AI, cloud, and other disruptive technologies, Fadada dramatically increases client contract signing efficiency. Users can create and manage an e-contract with the following steps.

· Real-name authentication

Individual users should provide ID cards, phone numbers, bank cards, and face recognition, while enterprise users must provide business licenses, legal person ID information, bank account information, etc.

· Contract signing

Party A will initiate the e-contract online. In the following stage, Party A and Party B can sign the contract after both parties have confirmed every detail. Facial recognition will be required during the signing process.

· Contract management

On Fadada’s electronic contract platform, e-contracts will be protected with an encryption algorithm, and they will have a hash that will be uploaded to a blockchain so that the contract can’t be altered and is accessible to all. Each contract will be stored in a blockchain-based evidence storage center as a PDF file. Users can access and download the file at any time.

· Resolving legal disputes

All electronic documents and contracts stored on Fadada’s electronic contract platform can be considered as valid evidences in a court trial to assist in resolving legal disputes.

The Fadada e-contract system is connected to the online arbitration systems of several arbitral committees in China. Users can contact the relevant online arbitration system via Fadada if a dispute arises regarding the contract signed via Fadada, which will facilitate the online settlement of the dispute.

3. How will Fadada’s electronic contract solution help enterprises combat the epidemic?

As a Hong Kong-based conglomerate, Chow Tai Fook is renowned for its jewelry design and quality. There are currently more than 5,000 Chow Tai Fook stores in China and more than 20,000 employees. Due to the complex and lengthy process for signing contracts with employees, Chow Tai Fook experienced a higher employee turnover rate following the outbreak of COVID-19.

A recruit in each store must sign a labor contract with the Human Resources department of the corporate headquarter or the Shared Services Center (SSC) of Chow Tai Fook. It will take at least two months for the contract to be signed after the epidemic, as it took only two weeks before. As a result, the risk of losing employees increases considerably since some employees are unlikely to wait that long.

With Fadada’s e-signature service, new employees at Chow Tai Fook can now electronically sign their employment contracts. To verify the identity of employees, Chow Tai Fook will use real-name authentication, and the back-end system will then automatically call the company’s electronic seal to authorize the contract.

The e-contract solution from Fadada offers Chow Tai Fook the capability of digitally managing human resources, which has dramatically streamlined the employment recruitment process and reduced the cost and time associated with contract signing.

The e-contract solution will not only benefit businesses but will also positively protect the environment. As of the first quarter of 2022, 5.2 billion contracts have been concluded via Fadada, which prevents cutting 24,270,000 trees and saves approximately 15.6 billion RMB. In the future, Fadada will continue to provide various technical solutions to more industries and contribute to the standardization and advancement of lawtech in China.