A contract without a seal is still valid; the issue is proving it later

This guide is for foreign founders, managers and staff who sign contracts for a company in Korea. Many people believe that a contract without the company's registered seal is void. It is not. As a rule, Korean law does not require a written document or a seal to form a contract. A seal matters for proof, not for whether the contract exists.

A seal is about proof, not formation

The difference shows when a dispute arises. Article 358 of the Civil Procedure Act (민사소송법) says that a private document is presumed genuine if it bears the signature, seal or thumbprint (무인) of the person or their agent. With a signature or seal, the document is presumed to be authentic, and the party that denies it has to overturn that presumption. Without one, there is no presumption. The party that submits the document then has to prove that it is authentic (진정성립).

Electronic documents and electronic signatures

Article 4(1) of the Framework Act on Electronic Documents and Transactions (전자문서 및 전자거래 기본법) says an electronic document is not denied legal effect merely because it is in electronic form. Article 4(2) adds a rule for guarantees. An electronic document showing the intent to guarantee, made by a guarantor in the course of its own business, is treated as the writing required by the main text of Article 428-2(1) of the Civil Act (민법), despite the proviso to that paragraph.

Article 3 of the Digital Signature Act (전자서명법) works in two steps. It refers to a signature, a signature with seal, or a name with seal (서명, 서명날인 또는 기명날인).

• Paragraph 1: an electronic signature is not denied effect as a signature, signature with seal or name with seal merely because it is electronic.
• Paragraph 2: where an electronic signature is chosen as the way to sign or seal under a law or an agreement between the parties, that electronic signature has the effect of a signature, signature with seal or name with seal.

The condition in paragraph 2 is the key in practice. If the parties agreed to use electronic signatures, the electronic signature has the effect of a signature or seal. This is why companies that introduce e-contracts first add a clause to their master agreement or trading terms allowing contracts to be concluded electronically. That way they do not have to argue the point for each contract.

Four ways to sign, compared

The table uses four Korean terms. The registered corporate seal (법인 인감) is the company's official seal, and the seal certificate (인감증명서) proves it. A use seal (사용인감) is a separate seal the company uses for everyday documents. A use-seal declaration (사용인감계) is the document that confirms the use seal is authorized.

Stamping a seal across the boundary between pages (간인) is not a step the law requires. It is a custom that shows no middle page of a multi-page contract was swapped. Page numbers, a stated total page count or a recorded hash value of an electronic document achieve the same purpose. Once you move to e-contracts, the step disappears and an integrity check takes its place.

What records to keep

Evidence comes from a bundle of records, not from one seal.

• The basis of authority to sign (corporate register (법인등기부), power of attorney, use-seal declaration)
• How the identity of the person who signed or sealed was checked
• A record of when the final version was settled
• Material showing that the final version and the signed version are identical
• Proof that the other party received the contract
• For e-contracts: the agreement clause, access and authentication logs, and document integrity information

E-contracts have the edge on the last item. A paper contract leaves no record of who stamped it and when. An e-contract system keeps the authentication time and access details. In a dispute, the amount of material you can submit is very different. If an unpaid claim goes to court, see Objection to a payment order.

Where the presumption can break

The presumption in Article 358 is not absolute. Even when there is a signature or seal, the other party may argue that the seal was misused or the signature was forged. Whether the presumption still holds then becomes a question for the court again.

So the fact that a seal was stamped is not enough to feel safe. A use seal is a particular risk because many people handle it, and it is not obvious who stamped it under what authority. Keep a use-seal log (사용인감 대장) that records the date of use, the counterparty, the document title and the person who approved the use. Then you can explain what happened.

With e-contracts, the identity check itself becomes the point of dispute. The strength of the evidence depends on whether you used mobile phone identity verification (휴대전화 본인확인), a joint certificate (공동인증서) or business authentication (사업자 인증). The larger the deal, the stronger the authentication you should choose.

Checklist

• Judge contract formation and proof separately.
• First check whether the law requires writing or a seal for this type of contract.
• Put a clause on electronic signing in your master agreement.
• Specify the electronic signature method and agree on it between the parties.
• Set internal rules on when to use the registered corporate seal and when to use the use seal.
• When you use a use seal, provide the use-seal declaration with it.
• If an agent signs, match the scope of the power of attorney to the contract.
• Check the gap between the issue date of the seal certificate and the contract date.
• Mark page numbers and the total page count on multi-page contracts.
• If you decide to skip the seal across pages, record the substitute method in the document.
• When revised drafts go back and forth, record when the final version was settled.
• Decide where the signed original is kept and who is responsible for it.
• Keep a record, such as an email, that the other party received the contract.
• Check how long the e-contract system keeps authentication and access logs.
• Decide the retention period after the contract ends and when the records will be destroyed.