In today’s digital world, electronic transactions and communications have become the norm. From signing contracts to filing tax returns, digitization has simplified many aspects of our lives. A central component of this digital transformation is the digital signature. But the question arises: Are digital signatures actually legally valid?
Digital signatures: what are they?
A digital signature is a cryptographic tool that guarantees the authenticity and integrity of a digital document or message. It serves as an electronic fingerprint of the signer and confirms that the document or message has not been tampered with since the signer signed it. In detail, a digital signature works by using public-key cryptography. In this process, the signer generates a pair of keys – one public and one private. The private key, which is secret and known only to the signer, is used to sign the document. The public key, which is publicly available, is used to verify the signature. When a document is digitally signed, a hash of the document is created, which is then encrypted with the signer’s private key. This encrypted hash is the digital signature. It is sent together with the document. When the recipient receives the signed document, he uses the signer’s public key to decrypt the encrypted hash and obtain the original hash. At the same time, the receiver creates a new hash of the received document. If both hashes match, the document is authentic and has not been modified since it was signed. Through this process, the digital signature provides a strong guarantee of the authenticity and integrity of digital documents and messages. It enables recipients to act with confidence, as they can be sure that the document actually originates from the specified signatory and has not been tampered with.
Legal validity of digital signatures:
The short answer to the question of whether digital signatures are legally valid is: Yes, they are. However, the longer response depends on several factors, including the country where the digital signature is used and the type of transaction it supports. In many countries, including the U.S. and EU, digital signatures are legally binding and treated in a similar way to handwritten signatures. In the USA, the legal validity of digital signatures was established by the Electronic Signatures in Global and National Commerce Act (ESIGN) of 2000. In the EU, legal validity was established by Regulation No. 910/2014 on electronic identification and trust services (eIDAS). In Germany, digital signatures were legally recognized by the Signature Act (SigG) in 2001. According to §126a of the German Civil Code (BGB), electronic documents with a qualified electronic signature are equivalent to a handwritten signature.
Evidential value of digital signatures:
In addition to legal validity, there is also the question of the probative value of digitally signed documents. According to the Signature Act, the qualified electronic signature is considered a handwritten signature and thus establishes the presumption of authorship and integrity of a document. The evidential value of digital signatures is based on the security of the cryptographic processes used. When a document has a digital signature, the recipient can be sure that the document originates from the signer and that it has not been changed since it was signed. However, this is only the case if the cryptographic methods used are secure and the signer’s private key has not been compromised. Unlike encryption, which ensures the confidentiality of information, the digital signature provides authenticity and integrity. While encryption makes the information unreadable to third parties, the digital signature confirms that the information actually comes from the specified sender and that it has not been altered. One problem that arises with the evidential value of digital signatures concerns services such as DocuSign. These services provide an easy way to digitally sign documents, but the probative value of their signatures can be questioned. The reason for this is that the private key used to create the signature is controlled by the service and not by the signer. This means that the service would theoretically be able to create or modify the signature without the signer’s knowledge or consent. This is where blockchain technology can provide additional security. By storing transactions immutably in a decentralized registry, the blockchain can securely prove the authenticity and origin of digitally signed documents. In addition, the blockchain could be used to leave control of the private key with the signatory, which would increase the probative value of the digital signature.
Additional safety measures:
However, it is important to note that not all digital signatures are the same. In some cases, such as highly sensitive transactions, additional security measures may be required, such as advanced or qualified digital signatures, which provide additional authentication and security controls.
Conclusion:
Digital signatures are an indispensable tool in today’s digital world. They not only provide a convenient way to sign documents and messages, but also ensure their authenticity and integrity. Digital signatures are legally recognized in many countries, including the US, EU, and Germany. To achieve maximum evidential value, complementary technologies such as blockchain can be useful.
