Legality of eSignatures in European Union
Background
Electronic signatures have streamlined the document verification process, enhancing efficiency both within the EU and globally. These digital methods facilitate swift, environmentally friendly signings, cutting down on paper and expediting deals. Nevertheless, when implementing eSignatures in the EU, it is vital to grasp the essential factors.
Security is paramount. The chosen eSignature provider must offer robust protection, including encryption, authentication, and audit trails, to prevent unauthorized access and ensure document authenticity. Services such as BoldSign provide these security measures to meet compliance and safety needs.
Ultimately, eSignatures offer significant advantages and are widely accepted. Still, adherence to legal norms, ensuring security, and selecting a user-friendly service is vital for their successful integration into the EU.
What is an electronic signature
Under the regulations of the European Union on electronic signatures, they are defined as electronic data connected to or logically linked with additional electronic data utilized by the signatory for signing. In the European Union, these types of signatures are considered legally binding on most documents as long as they can be unequivocally linked to the individual signing, and there is proof to verify their legitimacy, ensuring the document has not been tampered with or counterfeited. Additionally, the signatory’s intention to sign must be clear, indicating deliberate consent to the conditions outlined in the document. Electronic signatures are accorded the same legal standing as their handwritten counterparts provided these conditions are met.
Forms of electronic signature
An electronic signature encompasses a variety of digital forms attached to an electronic document or procedure. These forms can be:
- Using app login credentials to give permissions.
- Signing with a stylus or finger on a touchscreen device.
- Entering a name into an email as a form of signing off.
- Confirming agreement on a web page with a click post-verification.
- Adding a digitized image of a handwritten signature.
- Employing a spoken command to serve as an oral consent.
Overview of the regulation of electronic signatures in the European Union
Operations entailing the use of electronic signatures within the 27 member states of the European Union are regulated by the:
- Electronic Identification and Trust Services Regulation [eIDAS]1 .
- E-Commerce Directive [2000/31/EC]2.
As a rule, the regulation deems electronic signatures legal in the completion of transactions. eSignatures under the regulation are categorized into three categories:
- Simple Electronic Signature
- Advanced Electronic Signature
- Qualified Electronic Signature
A standard electronic signature is data in electronic form which is attached to or logically associated with other data in electronic form and which is used by the signatory to sign3.
Advanced Electronic Signature is explained as an electronic signature meeting the requirements set out in Article 264. It decrees that Advanced Electronic Signature must be:
- Uniquely linked to the signatory.
- Capable of identifying the signatory.
- Created using means that the signatory can maintain his control.
- Linked to the data it relates to so that any subsequent change to the data is detectable.
Uniquely linked to the signer
A secure electronic signature must be uniquely connected to the person using it. The signature must be uniquely made with methods only the signer can access, like a private key and confidential info, to verify their identity.
Use and incorporation remain in their sole control
The person using the secure electronic signature must have sole control over the means of creating the signature. Typically, this requires managing a key pair or two-factor authentication, with the signer exclusively holding the private key to prevent signature forgery.
Identify the person using the technological process
The process used to create the signature must be capable of identifying the person signing. This may include using a biometric signature, a Personal Identification Number (PIN), an email address or even a company registration number.
Track down any alterations made after signing
It is essential to preserve the authenticity of the signed document. Modifications made to the document post-signature should be identifiable. This is commonly accomplished through an audit trail. Audit trails record the signer’s IP address, timestamps of key signing events, and location, providing proof of identity, timing, and signature place.
Qualified Electronic Signature is an advanced electronic signature that is generated using a certified device for creating electronic signatures and relies on an accredited certificate specific to electronic signatures.
Article 325 sets out a validation set of standards to be met by the one for a qualified eSignature. These are:
- A statutory compliant certificate at the time of signing.
- A qualified trust service provider issued a valid certificate when signing.
- Signature validation data corresponds to the data provided to the relying party.
- The unique set of data representing the signatory in the certificate was correctly provided to the relying party.
- The use of any pseudonym is clearly indicated to the relying party if used at the time of signing.
- The electronic signature is of a qualified electronic signature creation device.
- The integrity of the signed data has not been compromised.
- Meets validity standards of an advanced eSignature.
Under Article 25 of the eIDAS6, Qualified electronic signatures are deemed to bear the same legal validity granted to wet-ink signatures.
Summary
| Type of Signature | Statute and Sections of relevant laws | Unique Features | Legal Validity |
|---|---|---|---|
| Simple Electronic Signature | Electronic Identification and Trust Services Regulation. Article 26 |
|
|
| Advanced Electronic Signature |
|
| |
| Qualified Electronic Signature | Electronic Identification and Trust Services Regulation. Article 32 & 26 |
|
|
Scope and limitations of eSignature transactions
Electronic signature transactions and their utilization do not have universal legal acceptance for document finalization. Consequently, there are specific types of transactions and uses for which electronic signatures are suitable, and others are not. Below is an analysis of this matter, accompanied by a summarized table of the transactions.
Documents that can be signed
Electronic signatures can be employed to affix signatures and provide countersignatures on a diverse array of documents, such as:
- Human Resources
- Procurement
- Software License Agreements
- Insurance Industry
- Educational Field, Etc.
Exempted transactions
Even though the eIDAS does not expressly provide for any transactions excluded from being completed by electronic signature, a collective effort of the states saw the establishment of the E-Commerce Directive [2000/31/EC]7.
The directive gave EU Member States discretion to exclude certain categories of contract that may be excluded from the electronic execution model. This, therefore, allows each member to choose the transactions that may be exempted from using an electronic signature. These transactions are8 :
- Field of taxation
- Activities of notaries or equivalent professions to the extent that they involve a direct and specific connection with the exercise of public authority.
- Transactions relating to agreements or practices governed by cartel law.
- Gambling activities, which involve wagering a stake with monetary value in games of chance, including lotteries and betting transactions.
- The representation of a client and defense of his interests before the courts.
It should, however, be noted that the position varies across the 27 member states.
Summary transactions under EU
| Transactions that can be used [Under the eIDAS] [subject to the jurisdiction laws] | Exempted transactions. [Under Article 1 Section 5 of the E-Commerce Directive [2000/31/EC] [For EU cross-border transactions] |
|---|---|
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To ensure the authenticity of an electronic signature, it’s advisable to follow these best practices in addition to complying with all applicable legal requirements:
- Confirm the signer’s identity and, in business dealings, verify that the individual is duly authorized to act on behalf of the company in affixing their signature.
- Secure explicit agreement from the individual signing, which may be incorporated in the contract itself or in a separate accord, to signify their intention to use the specified electronic signature for the document in question.
- Safeguard the document to prevent any modifications after the application of the signature.
- Keep an exhaustive log of the signing procedure, recording each step the signer performs.
How does BoldSign help
The following elements of compliance available within BoldSign can be used to comply with European Union eSignature laws:
- Secure and unique signing link: A secure and unique link to sign a document is sent directly to the signer’s email address. This helps ensure that the document is only accessed by the intended signer and cannot be tampered with.
- Password protection:Senders can specify a password that needs to be entered before viewing and signing a document. This adds a layer of security to the signing process.
- Audit trail: The signer’s IP address and timestamps for all significant events in the signing process are recorded in an audit trail. This provides a record of who signed the document when they signed it, and from where they signed it.
- Digital signature: The final signed document is digitally signed with an AATL compliant certificate. This ensures that the document cannot be tampered with without invalidating the signature.
- Consent: Signers are asked to confirm their intent to sign electronically and are also informed that they have an option to opt out. This helps to ensure that the signer is aware of the implications of signing electronically and that they have given their consent to do so.
- Custom terms: Getting your signers to agree to a custom set of terms. This can be useful to ensure additional security or that the signer understands the terms of the document.
- QES compliance: BoldSign offers fully compliant qualified electronic signatures (QES) that are simple, secure, and legally binding across the EU. QES guarantees that your essential documents are protected with the highest level of e-signature security, giving you peace of mind in your digital transactions. Using BoldSign, you can confidently manage your important documents while ensuring compliance with EU regulations.
Disclaimer: Information on this page is intended to help businesses understand the legal framework of electronic signatures for this particular country.
However, Syncfusion, its officers, directors, stockholders, affiliates, attorneys, accountants, employees or agents cannot provide legal advice. You should consult your own personal attorney regarding your specific legal questions. Laws and regulations change frequently, and this information may not be current or accurate. To the maximum extent permitted by law, Syncfusion provides this material on an “as-is” basis. Syncfusion disclaims and makes no representation or warranty of any kind with respect to this material, express, implied or statutory, including representations, guarantees or warranties of merchantability, fitness for a particular purpose, or accuracy.
Syncfusion makes no warranties of any kind, including but not limited to the information or the product, whether express, implied, statutory or otherwise. To the maximum extent permitted by law, Syncfusion disclaims all conditions, representations and warranties, whether express, implied or statutory with respect to this information without limitation any implied warranty of merchantability, fitness for a particular purpose, accuracy or currentness of this information.
Syncfusion nor their officers, directors, stockholders, employees, affiliates, attorneys, accountants or agents shall be liable for indemnification, nor does this create an express or implied, contractual or statutory, equitable or otherwise, under this Agreement. The officers, directors, stockholders, affiliates, attorneys, accountants or agents will not have any liability in any form.
1 Regulation (EU) No 910/2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC -[https://eur-lex.europa.eu/eli/reg/2014/910/oj]
2 Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (‘Directive on electronic commerce’) – [https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32000L0031]
3 Regulation (EU) No 910/2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC – Art. 3 (10) -[https://eur-lex.europa.eu/eli/reg/2014/910/oj]
4 Ibid 3(11) and 26
5Regulation (EU) No 910/2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC – Art. 32 – [https://eur-lex.europa.eu/eli/reg/2014/910/oj]
6Ibid, Art. 25
7Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (‘Directive on electronic commerce’) -[ https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32000L0031]
8 Ibid Art 1(5)
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