Enforceability of Digital Signature and Other Means to Execute Private Contracts

Published by Vanessa Machado Silveira | Informatives | 18 . January . 2021

Our law and tradition recognize acts that are more or are less formal. Formal acts depends on certain rites without which they will not be valid. Less formal acts are left up to the interested parties. In general, acts can be implemented at a distance, but there are  acts that shall fulfill legal requirements and signed in person. Examples of the formal acts are purchase and sale of real-estate properties; and of the latter, purchase and sale of goods and products.

The pandemic moment that we continue to experience has accelerated the use of digital signatures as adequate means to implement contracts which to not call follow a specific legal form.  Within the available alternatives we single out the digital signature meeting the ICP-B criterion (*see note below).  In addition to being recognized as valid, the ICP-B criterion is trustworthy and less bureaucratic.

The digital signature type ICP-B* is a reliable, valid, and less bureaucratic format, recommended for parties to sign contracts.  Nevertheless, some types of contracts require specific legal procedures, thus the request for legal support before signing any document is essential to mitigate future claims.

The Contracts team of F/A Advogados is available to legally assist you in this respect.

Below is important information about the validity of digital signatures and other means of executing contracts in general.

1.         Valid Format

Contracts in general can be implemented verbally or in writing; and the latter, in different formats.

Beyond doubt the written format – printed and signed by the parties and two witnesses, and notarized by a notary public – is traditionally the most adopted by contracting parties.  This is because it affords legal certainty, which is always desirable, mainly in a scenario of conflict between the parties.

But with the technical and digital evolution, and as noted above more so due to the current pandemic, the electronic execution of contracts has become common practice amongst many a transaction.

The practical advantages of implementing documents electronically are evident: this means affords more agility, simplicity, convenience, and cost reduction.  We note as examples that notarized signatures of the contracting parties are no longer necessary, and neither is the existence of documents or paper files.

Note that the digital signature is not a novelty in the Brazilian legal system.  It was adopted in 2001 by Provisional Act No. 2.200-2/2001.  This statute created the ICP-B  and afforded authenticity, integrity, and due legal validity to electronic documents.

The contracting parties of private contracts meeting the conditions noted above can freely adopt any means of electronic signatures.  But only the digital signature with electronic certification ICP-B confers deemed veracity of the signatories’ declarations and affords authenticity to the document.  This results from the ICP-B electronic certification being based on a cryptographic system.  This condition meets technical requirements imposed by applicable legislation and confers to the document the same status as written document with signatures notarized by a notary public.  As a result, it is one of the most recommended signature alternatives.

As a result, contracts executed by means of digital signatures with ICP-B technology are valid and afford all corresponding legal consequences.

But there are other available alternatives that can be used for the relevant parties to enter into valid contracts.  Below are the two most commonly used alternatives to digitally implement contracts:

  • Digital by other Certifiers.  This is an electronic signature solution resulting from a means different from ICP-B certification, with application of other technologies (e.g., password).  This solution is used by those who do not have digital certificates, which is required for ICP-B certification and not for this alternative.
  • Scanned.  This is a document containing the parties’ signatures as an image (e.g., .pdf scanned).  This alternative is frequently used to avoid the exchange of documents, thus conferring it logistic convenience to various signatures and/or signatures from outside of Brazil.

In consequence of its becoming popular and being offered in several formats, including for the reasons noted above, Decree No. 10,278/20 was recently enacted.  This Decree provides for the requirements of digital documents for affording the same effects as the original documents.

Pursuant to Section 6 of the Decree, any means of evidencing authorship, integrity, and confidentiality of the document will be valid between individuals, provided that the relevant parties choose them by common accord or that they do not oppose it.


2.         Precautions

As noted, in the last years we have evolved in terms of implementing certain types of contracts.  This evolution, as several other aspects of our current lives, is mainly centered in practicality, velocity, and convenience.

All this is desirable, but we call your attention to minimal precautions that need be taken before assuming contractual rights and obligations.  This is particularly true when the contract is not implemented by means of the traditional method of having printed documents signed by all present contracting parties, or by means of the ICP-B certification which, as noted above, affords the same assurances of written documents.  The precautionary items include:

  • Need to follow a set form, if required as a matter of mandatory law, such as the purchase and sale of real-estate properties, including for purposes of being legally enforceable against third parties;
  • Vulnerability of each type of digital signature;
  • Implementing precautions to evidence the validity of contractual execution, such as saving and storing all documents evidencing the negotiation up o signing, including e-mails in .pdf and complete information of the witnesses; and
  • Capturing in the very contract the parties’ free choice of the adopted alternative (e.g., by means of whereas clauses; specific clause).

*ICP-B – Brazilian Public Key Infrastructure is commonly referred to by the acronym ICP-Brasil or ICP-B.  ICP-B is the federal system of digital certification in Brazil.  This is the Brazilian public body public key infrastructure (usually referred to in English as “public key infrastructure”).  It is a structure formed by one or more certifiers called Certification Authorities – CA which, through a set of techniques and support procedures to a cryptographic system based on digital certificates, confirms the identity of the electronic media user or confirms the authenticity of a document supported by or filed in electronic media. For more information, see https://www.gov.br/iti/pt-br.

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