CONSIDER APPLICABLE LAW
Agreements can be entered into in many ways and “legal validity” does not play a role in most cases. Unless two parties try to transfer ownership of a registered property on a napkin. When considering optimizing signing processes, a few things need to be considered. For example, what kinds of parties are entering into these agreements and what is the governing law. When agreements are being made across borders, local laws and relative and absolute competence need to be considered.
ENTERING INTO AGREEMENTS: FREEDOM OF CONTRACT
When studying law, one learns that agreements are made without people realizing it. Even as early as we are born, we enter into the elusive “social contract”. When we buy coffee in the morning on our way to work, we enter into the first complex legal agreement. We do not sign anything though. Why not? Moreover, is it still legally valid?
Freedom of contract is one of the most important principles of property law. This means that the parties themselves can choose who, about what, and how they make agreements. These proceedings should not be pushed by an external control such as governmental interference. Only in specific cases does the law state special requirements. When buying a house, for example, an authentic deed of delivery must be drawn up by the notary. Other examples are the establishment of a legal entity or the agreement of a non-competition clause. In other words, oral agreements are just as valid as written ones. Why then take the trouble of drafting and signing agreements?
EVIDENCE IN CIVIL LAW AND THE RELEVANCE FOR DIGITAL SIGNING: WHAT CAN YOU PROVE?
The fact that we make parties draft and sign 100 paged documents is a consideration of evidential value. We can put this as “it’s not about what you agree upon; it’s about what you can prove.” When examining the “validity” of a digital signature, we must therefore not only look at property law, but also the rules regarding evidence in civil court.
CIVIL LAW EVIDENCE: HOW AUTHENTIC IS A DIGITAL SIGNATURE?
In civil law, there are again few rules when it comes to argumentation and evidence. People often confuse the way of providing evidence in criminal cases with evidence in cases between private parties. Even illegally obtained but authentic evidence may be used in civil court.
Ultimately, it comes down to how authentic a digital signature is. If a counterparty can within reason deny or argue about who signed, the agreement can be disputed. A judge will investigate this on a case-by-case basis.
B2B VS. B2C VS. B2G: OPTIMISING DEPENDS ON GOVERNING LAW
The new legislation on digital signing is probably the most interesting when it comes to communication and agreements between government and citizens / legal entities. The latest installation of framework legislation gives governments the opportunity to optimize processes. Between each other and between them and private persons and entities.
Companies must be well aware of which processes they want to optimise with digital signing, and which law governs these processes. Consumer law protects agreements between consumers and companies (B2C). Labor law governs agreements between employer and employee. Agreements between companies (B2B) are only covered by “general” law. This is a dangerous environment to make deals and contracts since there is virtually no legal protection. The parties, the form, the content, and argumentation and providing evidence are free.
INTERNATIONAL DIGITAL SIGNING
In order to promote cooperation and efficiency within the European Digital Market, the EU regularly introduces new legislation on this subject. The latest installation is Regulation (EU) n ° 910/2014 (eIDAS), effective as of 1 July 2016. This framework provides a foundation that gives digitally signed agreements more authenticity. In the Netherlands, digitally signed documents have been acknowledged for years. This does however not detract from the fact that other member states have different rules regarding evidence in court.
It also seems that the eIDAS regulation is more focused on public bodies. After all, it does not directly influence the way in which agreements can be disputed nor does it affect the providing of evidence in civil court. Article 25 (1) of the Regulation is an open door under Dutch law since there is no inadmissible evidence in civil court.
Documentaal is a leading company helping clients to close their digital loop. From document creation, contract drafting, document sharing up to signing offers, contracts, and orders digitally with keys based on the public key infrastructure (PKI).
Barry van Varik @ Documentaal
Bachelor of Law
Usefull links from our partner: Validsign digital signatures