The electronic signature considered more closely

The world is digitizing at a rapid pace. The corona crisis and associated social distancing and travel restrictions have added to this over the past year. Contracts are also frequently concluded online. But in that context, what about a signature? Can you always replace a so-called "wet" signature on paper with a digital variant? Does a digital signature in a PDF document suffice? And does this electronic or digital signature then also have the same legal force? In this blog, we take a look at the digital signature.

What is the function of a signature?

A normal, non-electronic signature has no well-defined definition in the law. It follows from the literature that the purpose of such a signature is to establish a connection between a natural person (the signer), and a text on the instrument he or she is signing. In many cases, a signature can also be considered a will. By signing, for example, a seller's offer is accepted by the buyer. In addition, a signature on a deed also has a certain evidential function when there is a dispute between parties regarding, for example, the authenticity of a deed. In principle, an electronic signature performs the same function. At the time a digital signature is made then this electronic signature is the link between the natural person (the signer) and the electronic data.

What is the definition of an electronic signature?

Unlike the "wet" signature, the digital signature is regulated by law. However, the law does not refer to digital signature, but to a so-called electronic signature. In normal speech, the terms are often used interchangeably. The electronic signature has the same legal effects as a handwritten signature, provided that it meets the legal definition of the electronic signature. Electronic signatures are: "data in electronic form attached to or logically connected with data in electronic form and used by the signer to sign. Thus, the electronic signature has four requirements:

• it consists of electronic data;
• that are attached to or logically connected to;
• Other electronic data; and
• used by the signer to sign.

Three types of electronic signatures

The law distinguishes three types of electronic signatures. Each type has its own level of reliability. The higher the level, the more requirements the law places on the signature. The three types of electronic signatures are:

• the ordinary electronic signature;
• the advanced electronic signature; and
• the qualified electronic signature.

The ordinary electronic signature

An ordinary electronic signature has the same legal effect as a handwritten signature, if the method used thereby for signing is sufficiently reliable, considering the purpose for which the electronic signature was used and considering all other circumstances of the case. This is an open standard. It is therefore important to look at the purpose of the electronic signature, after which it must be assessed whether a sufficiently reliable signature has been used for this purpose. An ordinary electronic signature can thus, for example, be a scanned signature from a paper medium. Such as a signature placed in a PDF document. But it can also be, for example, the name of the signer in typed form.

The advanced electronic signature

The advanced electronic signature has the advantage over the ordinary electronic signature that it provides a presumption of sufficient reliability. Such a signature thus provides an evidential advantage since the legislature assumes that the requirement of sufficient reliability is met. An advanced electronic signature is an electronic signature that meets four requirements:

• it is uniquely linked to the signatory;
• allows identification of the signer;
• is created using electronic signature creation data that the signatory, with a high level of trust, can use under its sole control, and;
• is attached to the data signed with it in such a way that any subsequent modification of the data can be detected.

The effect of these requirements is to create a stronger link between the identification of the signer and the signed digital 'document'. It additionally provides assurances that the 'document' has not been altered after signing. Unlike an ordinary electronic signature, an advanced electronic signature requires the use of an identifier with a high level of trust. A commonly used means for this is iDIN identification (online identification through the bank). However, it is unclear whether this method is actually sufficient for the advanced electronic signature.

The qualified electronic signature

Finally, there is also the qualified electronic signature. This signature goes one step further and is created, for example, by attaching a personal code of the signer to the document via cryptographic technology. Although qualified signatures are very reliable, they are often somewhat cumbersome to use. Additional hardware is often required to sign documents. In addition, the signer must also be identified through a special procedure.

Independent of the distinction between the different types of signatures, it is important to note that the ordinary electronic signature is sufficient in principle, as long as the signature is sufficiently reliable. The advanced and qualified signature, however, involve more safeguards to ensure this reliability. At the moment an ordinary electronic signature cannot be considered sufficiently reliable, this can lead to serious consequences. For example, the Court of Zeeland-West-Brabant recently ruled that no valid surety agreement had been concluded between a lender and a guarantor to secure the repayment of a money loan. The court held that the use of an ordinary electronic signature to sign the surety agreement was not sufficiently reliable. Thus, the lender could not enforce the surety agreement against the guarantor. Borrower had since been declared bankrupt. With the bail bond going under, lender could only file its claim in borrower's bankruptcy.  

Signing of deeds and evidence

Under the law, a signature is also required to give probative value to a deed. The law distinguishes between authentic deeds and private deeds. Authentic deeds are those that have been drawn up in the required form and by the authorized official (think, for example, of a notarial deed). Negotiated deeds are those that have not been drawn up in the required form and by a competent official. Thus, placing a signature under a typical contract makes it a private deed. Such deeds are in principle form-free. The law also offers the possibility of drawing up private deeds electronically. These electronic deeds must also bear - in this case - an electronic signature. Both written and electronic deeds have the same probative value. Provisions included in private instruments provide conclusive evidence between the parties. As a result, the court is not free in its appreciation, but is obliged to take the contents as true. With respect to third parties who are not parties to the private deed, a private deed has free probative value. In such a case, the judge may himself determine what value he attaches to the deed.

Conclusion

Our signature may be completely obvious in everyday use, but it has an important function in our law. In this respect, the law is well prepared for the digitization of our society and gives the electronic signature the same legal force as a "wet" signature. So in principle it makes no difference whether an agreement is signed with pen or with a digital signature. However, it is important that the electronic signature can be established with sufficient reliability. In some cases, therefore, an advanced electronic signature is better suited. Not only to prevent fraud, but also to be sure that the right person has signed the agreement.  

Do you have questions about signing agreements digitally? If so, please contact one of our specialists: Valerie Lipman or Joost van Dongen.