Are Digital Signatures legal?

By Larry Kluger posted 12-20-2013 08:39


Are Digital Signatures legal?

“I just have to ask, are digital signatures legal?”

The short answer is, yes, of course they’re legal. Since I’m not a lawyer, though, I should add that my opinions are not legal advice. Ultimately, you, your attorney, the people who will be accepting your digitally signed documents (and their attorneys) will be the people who will make the practical decision about whether digital signatures can be trusted or not for your circumstances.

Since the laws and courts (US and International) accept digital signatures you should feel comfortable to both digitally sign documents and to accept digitally signed documents. The laws also offer safeguards if you want to use a digital signature but the recipient (the “relying party”) doesn’t want to accept your digitally signed document.

The laws often speak of “electronic signatures.” Digital signatures are the highest form of “electronic signature” and provide the best assurances to the signer and the recipient that the signature is trustworthy and legal. In Europe, the term “Advanced Electronic Signature” is preferred over the synonym “Digital Signature.”

Let’s go “inside” to explore these issues further.

Signatures represent trust between the signing party and the recipient, the “relying party.” The signer is asking to be trusted. The relying party is making a decision to trust (rely on) the signer’s signature or not. The relying party is making a number of decisions:

  • Signer identity: Is the signer who he says he is?
  • Signer’s understanding and intent: Does the signer understand what she is signing? Is it clear that she intended to sign it?

The relying party will also want to protect himself in case of a later dispute. Lawyers are professionally trained to think about possible disputes and defenses when things go wrong:

  • Signature repudiation: What is the defense if the signer later claims “I didn’t sign that!”
  • Document’s integrity: What is the defense if the signer later (falsely) claims that the document was changed by the recipient after it was signed?

The signer also has to worry about document integrity in case of a dispute: how can the signer prove that the recipient modified the document after it was signed? This is a very real worry when you simply place a scan of your signature onto a document to “sign” it. This method of “electronically” signing a document enables the recipient to easily change the document and makes it difficult for you to prove that a change had been made.

The law, courts, and your lawyers worry about disputes, not about the 99.99% of agreements that proceed amicably. Open, standard digital signatures give both signers and relying parties superb defenses anytime there is a dispute.

In the olden days (last century), setting up and using standard digital signatures was overly complicated and expensive. The good news is that centralized digital signature technology has dramatically decreased the expense of purchasing and administering a digital signature system.

So now we can answer our original question again: open, standard digital signatures are not only legal, they give the best protection for both the signer and relying party in case of disputes. And the cost is low—AIIM reported this year that 81% of their survey respondents reported ROI periods of 12 months or less for their digital signature projects.

I'll sign off now. But please use the comments to let me know your digital signature-related questions and comments.

Photo credit: Adam Wyles

#digitalsignatures #electronicsignatures