What is a Digital Signature?
A digital signature, or electronic signature, is a digitised signature used to verify a signer's identity. As with other types of signatures, the purpose of a digital signature is to ensure that the signer is identical to the person he or she claims to be.
The advantage of a digital signature is that a signatory can sign a document quickly and easily. A signatory is able to avoid the convoluted routine of printing, signing, scanning, sending, printing, signing and scanning documents. Instead, they can easily sign a document using Adobe, a national identification process (such as the Danish Nem-ID system) or a private sector product, such as Contractbook's digital signature. Contractbook employs a two-step authentication process through email and mobile phone. You can read more about it here.
In many countries and jurisdictions, a digital signature has the same legal status as a pen and paper signature. Other countries still require a physical signature on a document (called a “wet” or an “ink” signature). You can read more about this below.
In general, Danish law does not require a written signature to make a contract valid. This means a contract is valid regardless of whether the parties reach an oral agreement, physically sign a document or use a digital signature. Having said that, it is difficult to enforce an oral contract in Denmark if there is a dispute. Further, certain documents or processes in Denmark require a specific type of signature. To establish a company and submit its associated founding documentation, for example, one must use the Nem-ID system.
Denmark also follows the EU's eIDAS Regulation (Electronic Identification Authentication and Trust Services) which became effective in 2014 (see below).
Background to the eIDAS Regulation
In 2011, the European Commission amended its original 1999 electronic signature directive. In doing so, it took a further step towards creating a pan-European digital market, where all European member states recognise each other's electronic signature laws. The EU adopted the eIDAS Regulation (Electronic Identification, Authentication and Trust Services) in 2014.
Purpose of the eIDAS Regulation
The purpose of eIDAS is to generate security and trust in electronic signatures by designing a system of electronic signature mutual recognition across the 28 EU member states and Switzerland. The underlining intention is to create what the EU calls interoperability and transparency. By having a common digital market, the EU can prevent cybercrime. It also makes it easier for its citizens to trade and contract across the EU member states.
Legal effect of a digital signature under the eIDAS
Under the Regulation, a digital signature has the same legal effect as a handwritten signature throughout the EU. But before a digital signature is valid, parties must provide unique identification information of the signatories. Further, the signature must link to the data to which it relates in a way that allows detection of any subsequent change to the data.
Most English-language countries outside the EU (ie the United States, Canada, Australia and New Zealand) also recognise digital signatures. They are also valid in several Asian, South American and African countries. This site provides an overview of the laws in each country, which vary widely from country to country.
In the U.S., the Uniform Electronic Transactions Act 1999 (UETA) regulates digital signatures. It harmonises the laws across 47 states, including Washington D.C.(Illinois, New York and Washington are the three states that have not adopted UETA, though each has adopted its own law governing electronic signatures.) Digital signatures have the same legal status as physical or wet signatures: "If a law requires a record to be in writing, an electronic record satisfies the law."