Effectiveness of Electronic Signature e Other Forms of Execution of Private Agreements

Published by Vanessa Machado Silveira, Débora Lopes Ferreira de Paula Menezes | Informatives | 8 . August . 2022

Our law and tradition, both, recognize acts vested of more or less legal requisites, as per the level of Public control. There are acts over which the Public imposes some conditions, and if those are not properly met, the respective acts may be deemed ineffective. The other acts are entirely subject to the parties involved. In general, those may be implemented from afar, through digital means, however, there are acts that must be physically signed. Both acts must fulfill some legal requirements that will be herein summarized. An example of an act with more legal requisites (thus more formal) is the Sale & Purchase Agreement for real estates; an example of a less formal act is the selling of non-regulated products.

The pandemic time in which we still dwell, and the internationalization of business has accelerated the use of digital signatures as an adequate means to execute agreements in general. Among the present alternatives, we highlight the digital signature with ICP-B standards (*please see note below). Besides the fact it is widely recognized as valid, the ICP-B is trustworthy and less bureaucratic.

The Contract Law Team of Farroco Abreu is available for legal advice in this matter.

Bellow there is important information about the effectiveness of the digital signature and other means to execute agreements in general.

1. VALID FORMAT

Agreements in general may be formalized verbally or in writing, and the latter, through various formats.

Beyond doubt the written – printed and physically signed by the parties and two witnesses and notarized by a notary public – is traditionally the most commonly used way to execute agreements. This is because it affords legal certainty, which is always desirable, mainly in a scenario of conflict between the parties.

But with the digital and technological enhancements, and more than ever, due to the current context, the electronic execution of agreements offers promptness, simplicity, convenience, and cost reduction. We note as examples that depending on the kind of signature, notarized signatures of the contracting parties are no longer necessary, and neither is the existence of documents or paper files.

Please note that electronic signatures are not entirely a novelty in the Brazilian legal system. They have been implemented in 2001 through the Provisional Act  (“MP”) nº 2.,200-2/2001. This MP has established the ICP-B and afforded authenticity, integrity, and due legal validity to electronic documents signed.

The fast consolidation of this structure, imposed by the pandemic, has motivated the creation of the Law no 14,063/2020, that merged the innovations of the MP about this matter, modernizing the previous rules and systematizing the usage of the electronic signatures, mainly focused on the interactions among public entities, but with applicability to private relations.

The parties in private agreements may freely chose between any of the types of electronic signatures with legal enforceability. Those are:

  • Digital ICP-B-featured Signature – “Qualified Signature”: The qualified signature that features ICP-B certification, by itself, offers the same legally assumed faithfulness of the signing parties’ declarations and the authenticity of document. This is a result of the ICP-B, an infrastructure based on an encrypted system. This condition fulfills the technical requests demanded by the law and makes gives the document the equivalent effects of a notarized hard copy. Thus, it is one of the most recommended kinds of signature.
  • Digital by other certifications – “Advanced Electronic Signature”. This signature uses data to create a signature that is highly trustworthy, operable and solely controlled by its respective signing party, to whom it associates exclusively. It does not bear the ICP-B features and it is considered a means of signing that uses different technology. It is mostly used if parties do not have digital certificates.
  • Without a Certificate/Digitally Scanned Document – “Simple Electronic Signature”. It allows the signing parties to be identified and attaches or associates electronic data to the signing party. It is the digital representation of the physically signed document, as an image or a pdf-format scanned image. This kind of signature is commonly used to avoid the usage of printed paper and for the record of signatures collected outside of Brazil.

Note: Several digital signature platforms offer, the types abovementioned, depending on the signature requisites and how it is registered.

In consequence of its becoming popular and being offered in several types, also for the reasons noted above, the Decree No 10,278/20 was published. This Decree provide for the requirements of digital documents for affording the same effects as the originals.

According to the Section 6 of such Decree and other related rules, any means of evidencing authorship, integrity and confidentiality of the document will be deemed as valid between private parties, provided it has been chosen through a valid agreement of the signing parties or accepted as valid by the person against whom the document shall be enforceable.

Additionally, from time to time, several new legal acts are being published, regulating procedures of public entities about electronic signature and its enforceability.

2. PRECAUTIONS

Parties should have attention to certain precautions that should be taken  before assuming contractual rights and obligations. This is particularly true when the agreement is not implemented by means of the traditional method of having printed documents signed by all present contracting parties , nor by the Qualified Signature type. The main precautions include:

  • Specific format obligation, if legally mandatory for enforceability against third parties;
  • Observing the vulnerabilities of each digital signature type;
  • Implementing precautions to guarantee the validity of the agreement execution, such as properly saving and storing in pdf format all documents evidencing the negotiation process, until the signature, including e-mail and complete witness information; and
  • Confirm in the agreement, the parties’ free choice to sign via an electronic signature type (i.e., in the whereas/recitals or specific clause).

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*ICP-B – Brazilian Public Keys Infrastructure, is commonly referred to by the acronym ICP-Brasil or ICP-B, which is the Brazilian national system of digital certification. It is an Infrastructure consistent of one or more certifiers named Certifying Authorities – “AC” which, through a set of techniques and support procedures to an encryption system, based on digital certificates, confirms the identity of the electronic media user or the authenticity of a document, whether it is supported by or stored electronically. For more information, please see https://www.gov.br/iti/pt-br

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