Digital signatures: which are legally binding and which are not?

This article has been written in response to the growing number of clients who have contacted us seeking advice regarding digital signatures, a process which is exponentially growing together with (mis)information in mass media and across internet sites.

In this sense, it is important to be well acquainted with the relevant information to prevent us from being harmed in our good faith.

Any document susceptible of being signed in a handwritten form is susceptible of being digitally signed, as set forth in the Digital Signature Act under section 1 (passed in 2001):

“It is hereby acknowledged and accepted that the use of electronic or digital signatures and their legal effects in the conditions herein set forth”.

Section 3 provides as follows: “Digital signatures provide the same legal standing as handwritten signatures when required by law. This principle is applicable to all cases required by law to bear a signature or sets forth consequences in the absence thereof," except for some provisions stipulated in section 4.

Now, the important question is: what is a digital signature? The confusion is such that many professionals have stated that a picture pasted over a text in a computer is a “digital signature” and, therefore, it is binding. Absolutely not: such a document is as valid as a photocopy. This item is clarified in section 2 of the above-mentioned law:

“A digital signature is the result of applying a mathematical scheme to a digital document, containing information exclusively known by the signer, enabling the signer to have total control over such information. A digital signature must be susceptible of being verified by third parties in such a manner that allows the disclosure of the signer’s identity and the detection of any alteration of the digital document after signature simultaneously”.

A brief analysis of this article, skipping technical aspects in detail, will reveal that digital signatures are more like fingerprints rather than handwritten calligraphic styles. It is a combination of letters and digits represented by a mathematical algorithm in such a way that ensures the signer’s consent to a particular document.

That said, we will analyse the legal force of other electronic signatures (e-signatures) that do not meet the requirements set down by law.

They can be defined as: “a sequence of integrated data in electronic form, which is logically associated with other data in electronic form, used by the signatory for his/her identification, lacking any of the legal standards or requirements to be considered a digital signature. If an e-signature is repudiated, the authorship shall be proved by the enforcing party”.

Electronic signatures are a generic category by exclusion (from the “photo pasted over a document” up to documentation approval through the AFIP digital platform). All of them have something in common: they do not provide the same legal standing as digital signatures do. If one party denies or repudiates the authorship of an electronic signature, then the enforcing party must prove such authorship to the Courts. In this sense, we stress the importance of digital signatures. Other electronic signatures are subject to the production of evidence by the parties involved; even if evidence is produced (an unreliable and burdensome legal step) there will be a subsequent delay in any court proceedings of, at least, one year for enforceability purposes.

On the other hand, law clearly defines which documents can be signed digitally (obviously, only digital ones). One key factor is that digital documents are independent from the format in which they are stored; the essence is not the impression of the document but the digital file itself. In this regard, there is a key difference with a paper format since any unaltered copy operates as a new original (unlike paper formats where photocopies are relatively valid).

The digital document itself, is a code of zeros and ones, displayed in such a way that shows a result where consent is given through a mathematical algorithm. This lawful definition of “digital document” encompasses a wide range of documents susceptible to be signed or to be given consent. Not only texts but also, audios, videos, images and basically any file capable of being stored in a digital way and vested with integrity.

Another aspect to be considered is the presumption relative to sender, authorship, and integrity. This means that if someone claims that a digital signature has not been consented, that a digital document has been tampered with or that an automatic release digitally signed has not been signed by the sender, the claiming party must produce evidence to prove it faithfully. Although evidence on the contrary is admitted, these types of presumptions are nearly impossible to be distorted.

A great benefit coming soon is that digital signatures will help to create paperless and environmentally friendly offices and workplaces. Law sets forth that keeping digital files with digital signatures replaces contracts or documents in paper format as long as “they are available for consultation and provenance, destination, date and time, sending and/or receipt can be clearly determined”.

Finally, as regards the Digital Signature Act, users shall have the following obligations: to keep a strict control over data used to create digital signatures, to use reliable devices, to renew or cancel the certificate if data is presumed to be unsafe and to report any change in the data concerned.

What is the benefit of having a digital signature?

Basically, the major benefit is the possibility to perform any act requiring consent without the need to be physically present. Nowadays, digital platforms and digital signatures allow the execution of commercial agreements, to issue pay stubs or to establish a company in a completely legal form. This dynamic enhances the corporate market in terms of contracts and paperwork.

How can digital signatures be created?

By two means: with or without a physical device (token). The first alternative demands an investment (the purchase of the device) and, in both cases, to contact a Certificate Authority. The procedure without token is free of charge as part of the public policy program to shorten the digital gap and also there are private companies providing this service.

Further information is available here. At our law firm we are strongly committed to the legal analysis of available technological tools since they can add value and transform the reality of our community and the legal personnel who seek our advice. As usual, we remain at your disposal for further details. 

Diego J. Nunes is a Partner at Estudio Nunes & Asoc.

About Estudio Nunes & Asociados:

A full service law firm, Estudio Nunes & Asociados Abogados was founded in 1981 by Dr. Sergio Héctor Nunes and specialises in offering corporate, commercial, civil, labour and administrative legal advice.

We strive to offer comprehensive legal consulting to our clients, companies and individuals, providing technical professional and innovative solutions, all tailor made to the needs of each client's complex requirements.

Together as One, Estudio Nunes & Asociados Abogados is a Member of the Alliott Global Alliance of independent professional firms.