The legal validity of contracts signed with advanced electronic signatures

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Contracts signed with the advanced electronic signature have legal validity.

Given that in some cases doubts arise to the truth of this statement, due to the mere fact that a contract is signed through an electronic medium such as the advanced electronic signature, in this post we want to explain and answer those questions. And we will do so by taking into account the laws in force that govern the legal validity of contracts in Spain and the law regulating eSignatures in Europe (which applies to all member states).

The legal validity of contracts

In Spain, the legal effects of contracts are governed by the Spanish Civil Law.

The Spanish legal system has granted autonomy to parties, giving them freedom to agree or negotiate the aspects that are of their interest (provided they are not illegal and do not violate morality and good manners). Therefore, such agreements shall be binding for the parties.

The latter is based on the fundamental principle of the Spanish Civil Law called “pacta sunt servanda“, and on the effects of Article 1258 of the Spanish Civil Code, which states: “contracts are perfected by mere consent, and since then they are compelling, not only to the fulfillment of what they expressly agreed, but also to all consequences that, according to their nature, are in accordance with good faith, use and law.”

What conditions must a contract meet to have legal validity?

Consent, previously expressed by a handwritten signature, can now be expressed by an electronic signature.

As indicated by the Spanish general norms of Law, in order for the concerted act by the parties to have legal validity, it is important that the following elements concur, as stated by the Spanish Civil Law:

that there is the will or consent of the parties (articles 1.262 to 1.270),
that there is an object or contractual purpose (articles 1271 to 1273) and
that the mentioned object is based on a legal cause (articles 1274 a 1277).

The current use of technological means allow for the consent to be manifested regardless of the place where the parties are located.

This means that the consent which was once expressed through a handwritten signature in a given scenario, nowadays can be formalized in different scenarios by using an electronic signature solution.

In case a contract is signed electronically, it will have legal validity when the same elements mentioned in the previous paragraph occur, which apply equally to the contract signed in person.

How to prove that a contract signed with the electronic signature has legal validity?

Electronic signatures allow the acts issued by the parties to be valid and legally binding.

In contracts formalized in virtual environments there is legal validity when it can be demonstrated that the consent has been given by the party/s linked to the contract by an electronic signature, fulfilling the legal requirements already mentioned:

that there is the will or consent of the parties (articles 1.262 to 1.270),
that there is an object or contractual purpose (articles 1271 to 1273) and
that the mentioned object is based on a legal cause (articles 1274 a 1277).

In this regard, there are currently technological tools or solutions that offer the advanced electronic signature service.

These solutions, such as Signaturit’s advanced eSignature solution, allow to comply with the legal standards required by law, thus enabling the acts issued by the parties to be valid and legally binding.

At a technical level, the advanced electronic signature, as we explain in the next section of this blog post, is the electronic signature that allows to identify the signer and to detect any subsequent change to the signed data. This signature is linked to the signer in a unique way and to the data to which it refers, and has been created by means that the signer can keep under his/her exclusive control.

At Signaturit, to fulfill these requirements, we collect electronic evidences such as geolocation, biometric data encryption and time stamping come together to create a document that technically certifies the signer’s will.

Legal requirements for the advanced electronic signature

The regulatory framework for advanced electronic signatures in the EU is established by Regulation (EU) No. 910/2014, known as eIDAS, which concerns electronic identification and trust services for electronic transactions in the internal market.

In Spain, the electronic signature is governed by Law 59/2003 of December 19, concerning the electronic signature, which was modified by Law 56/2007 of December 28, of Measures to Promote the Information Society, and by Law 25/2015 of July 28, of second chance mechanism, reduction of the financial burden and other measures of social order.

The Regulation (EU) No. 910/2014 repealed the previous Directive 1999/93 – which transposition gave rise to the Spanish Law 59/2003 on electronic signature. This law is still in force (tacit derogation) and will disappear when a new national regulation replaces it.

Article 26 of Regulation (EU) No. 910/2014 indicates the legal requirements of advanced electronic signatures, requiring the following:

“it is uniquely linked to the signatory;
it is capable of identifying the signatory;
it is created using electronic signature creation data that the signatory can, with a high level of confidence, use under his sole control; and
it is linked to the data signed therewith in such a way that any subsequent change in the data is detectable”.

Article 25 of the same regulation establishes the probative value of the advanced electronic signature when it states:

“An electronic signature shall not be denied legal effect and admissibility as evidence in legal proceedings solely on the grounds that it is in an electronic form or that it does not meet the requirements for qualified electronic signatures. (…)”

According to all of the above, the advanced electronic signature enjoys recognition and legal support in the European Union. The use of the same is becoming increasingly common, being the responsibility of each company to choose the appropriate tool.

If it is intended for consent in legal acts to be supported by evidence (have probative value), therefore it is important to use an appropriate and legally valid technological instrument.

It is specifically relevant that this instrument complies with the legal requirements established by Regulation (EU) No 910/2014 for the advanced electronic signature, which have been previously commented.