Digital Signatures in Contracts (Part 2)

November 5, 2024

The advancement of digital technologies has transformed the way contracts are formalized in Brazil. With the digitization of documents, digital signatures have become an essential tool for companies and professionals seeking efficiency and legal security in their processes. Digital signature solutions stand out by enabling documents to be signed electronically with legal validity, reducing bureaucracy and costs, while also meeting the integrity and authenticity requirements set by law.

A key milestone for digital signatures in Brazil is Provisional Presidential Decree #2,200-2/2001, which established the Brazilian Public Key Infrastructure (ICP-Brasil) and also supports other forms of digital signatures. This regulation ensures that documents signed with ICP-Brasil certification have legal validity, guaranteeing authenticity, integrity, and non-repudiation, making them equivalent to physical documents with handwritten signatures (Article 10, Paragraph 1). Qualified digital signatures are especially useful for contracts of higher value or complexity, where greater legal certainty is desired, as the signatory’s identity is verified and their intention to sign the agreement is confirmed. These signatures function as a unique, non-transferable form of authentication, similar to how an ID is used to verify a signature in a notary's office.

In Paragraph 2, Decree #2,200/01 allows the parties to mutually agree on the use and validity of signatures with other encryption standards. This shows that the legislation permits the validity of digital signatures regardless of the encryption method used.

“Article 10. Electronic documents covered by this Provisional Presidential Decree are considered public or private documents for all legal purposes.

“The statements contained in electronic documents produced using the certification process provided by ICP-Brasil are presumed to be true in relation to the signatories, in accordance with Article 131 of Law #3,071, of January 1, 1916 – Brazilian Civil Code.

“Paragraph 2. The provisions of this Provisional Measure do not preclude the use of other means to prove the authorship and integrity of electronic documents, including those using certificates not issued by ICP-Brasil, as long as they are accepted by the parties or by the person to whom the document is presented.”

In addition to the previously mentioned Provisional Presidential Decree, Law #14,063/2020 also governs the use of electronic signatures in interactions with public entities, legal entities, health-related matters, and software licenses developed by public entities. Its primary aim is to protect citizens' personal and sensitive information, as stipulated in Items X and XII of Article 5 of the Brazilian Federal Constitution and Law #13,709/2018 (Brazil’s General Data Protection Act). This law categorizes digital signatures into three levels: simple, advanced, and qualified. Each level offers a different degree of security, with qualified signatures being the most secure as they require ICP-Brasil certification. Although advanced signatures do not offer the same level of assurance as qualified signatures, they can be used when both parties agree to accept and recognize their validity. For instance, the DocuSign platform supports simple and advanced signatures, but also integrates with ICP-Brasil certificates, enabling the use of qualified signatures in electronic documents such as commercial and financial contracts.

The Brazilian Civil Code also supports the validity of digital signatures, particularly in Article 107, which states: “the validity of a declaration of intent does not depend on any special form, except where the law expressly requires it.” This means that as long as the authenticity and integrity of a document are ensured, contracts signed digitally are legally valid.

1. Executive Title

In 2023, Law #14,620/23 amended Article 784 of the Code of Civil Procedure, adding Paragraph 4, which lists extrajudicial executive titles and recognizes electronically signed documents as valid extrajudicial executive titles, even without witnesses:

“Paragraph 4. In executive titles created or certified electronically, any type of electronic signature provided by law is allowed, and the signature of witnesses is waived when the integrity of the document is verified by a signature provider.”

This legal change to Brazil’s Code of Civil Procedure, which took effect on July 13, 2023, aligns with the precedent set by the Brazilian Superior Court of Justice in Special Appeal #1495920 (2014/0295300-9 of June 7, 2018). It confirms that electronic documents signed with any electronic signature, whether certified by ICP-Brasil or not, as outlined in Article 10 of Decree #2,200/01, are considered extrajudicial executive titles for all purposes, making the signature of two witnesses unnecessary.

2. Brazilian Court Precedents on Digital Signatures

The validity of digital signatures is reinforced by rulings from Brazil’s leading courts, including the Brazilian Superior Court of Justice and various state Justice Courts. The Brazilian judiciary has been progressive in recognizing digital signatures as a legitimate means of formalizing contracts, especially those certified by ICP-Brasil.

In 2018, the Brazilian Superior Court of Justice, in its ruling on Special Appeal #1,495,920/SP, emphasized that digital signatures certified by ICP-Brasil provide legal security and validity to electronic documents. The court ruled that a contract signed with such certification has the same validity as a physically signed document. Even without witnesses, the document is considered an enforceable title as long as the parties use a reliable certificate.

The judgment was based on the following:

“5. The digital signature of an electronic contract serves to certify, through an independent third party (certifying authority), that a particular user has applied the signature, thus effectively signing the electronic document and ensuring that the transmitted data remains unchanged and confidential.

“6. With these new tools to verify the authenticity of the contracting party’s presence, the enforceability of electronic contracts can be recognized.”

The use of asymmetric or public-key cryptography enables the verification of a digital signature by employing two distinct keys: one held by the user and another held by the certifying authority (an independent third party), which identifies that the digital signature was used applied by a user and can be reliably traced back to them.

In a more recent decision, the 3rd Panel of the Brazilian Superior Court of Justice upheld the validity of an electronic signature made on a digital platform not certified by ICP-Brasil. Under the guidance of Justice Nancy Andrighi (Process: Special Appeal #2,159,442), the court clarified that Provisional Presidential Decree #2,200/01 does not mandate the exclusive use of ICP-Brasil certification for digital signatures to be valid and the parties may choose the certification method. The Court concluded that, as long as both parties agree on the method of electronic signature, that agreement must be respected, provided that the necessary standards of integrity and authenticity are met.

Below are five examples of Brazilian case law that uphold the legitimacy of electronic signatures in contracts:

  1. Brazilian Superior Court of Justice – Special Appeal #1,495,920/SP: The Brazilian Superior Court of Justice recognized the validity of electronic signatures, equating them to handwritten signatures. It confirmed that digital signatures have legal value as long as they comply with the requirements of Provisional Presidential Decree #2,200-2/2001, which created the Brazilian Public Key Infrastructure (ICP-Brasil).
  2. Brazilian Superior Court of Justice – Special Appeal #1.495.146/MT: In another case, the Court reaffirmed the legal validity of electronically signed contracts. The decision highlights that, that when supported by ICP-Brasil digital certification, the electronic signature is presumed to be authentic and intact, ensuring the document’s validity.
  3. Sao Paulo State Court – Civil Appeal #1006234-98.2018.8.26.0100: The São Paulo Sao Paulo State Court ruled that electronically signed contracts are valid and effective. The decision noted that a digital signature authenticated by ICP-Brasil guarantees the security and integrity of the contract, resolving concerns about its authenticity.
  4. Minas Gerais State Court Civil Appeal #1.0024.14.298768-4/001: The Minas Gerais Court of Justice upheld the validity of a digitally signed lease agreement. The ruling emphasized that an electronic contract is valid as long as both parties give their consent and applicable laws are followed.
  5. Superior Labor Court – Appeal for Review – 1000048-36.2019.5.02.0431: The Brazil’s Superior Labor Court analyzed the legitimacy of an electronically signed employment contract. The court ruled that an electronic signature certified by ICP-Brasil meets the legal requirements for validity.

3. Bill #4.187/2023

Bill #4,187/2023, currently under review in the Brazilian Congress, seeks to update and expand the legal framework for digital signatures. According to the proposed text, an electronic signature using a digital certificate under the Brazilian Public Key Infrastructure (ICP-Brasil) would be equivalent to notarizing a signature in a notary's office. If passed, this Bill could further strengthen the validity of digital signatures and enhance the security and reliability requirements of electronic contracts.

4. DocuSign and Practical Implications for Businesses and Professionals

DocuSign is one of the most widely used platforms for digital signatures, offering options for simple and advanced signatures as well as integration with ICP-Brasil for documents that require heightened security. The platform allows remote signing of documents, with authentication features that record key data such as the signer's IP address, date, and time of signature. This information provides an additional layer of security, offering further proof of contract validity in case of a legal dispute.

For businesses and professionals, using DocuSign brings significant practical benefits. Contracts that previously required in-person signatures or notarization can now be completed in minutes, reducing both time and costs. The platform also ensures that documents are securely accessible and auditable, creating an electronic record that can be used as evidence in court.

5. Necessary Precautions When Using Digital Signatures

While digital signatures are an efficient and secure solution, certain precautions are necessary. For contracts of higher value, complexity, or importance, it is advisable to use qualified signatures that require ICP-Brasil certification. For less significant or internal agreements, advanced signatures, such as those available on DocuSign, may suffice, as long as all parties agree to the method.

It is also essential for companies to educate their employees and clients about the specifics of digital signatures, including when ICP-Brasil certificates are necessary and the legal implications of each type of signature. This awareness helps to ensure safe transactions and avoid potential disputes.

12. Conclusion

Digital signatures, as regulated by Provisional Presidential Decree #2,200-2/2001 and Law #14,063/2020, represent a significant advancement in contract formalization in Brazil, with their validity further supported by court decisions. The tools available today make the process more accessible, but it is critical that all parties understand the various types of signatures and select the appropriate method for each situation. By adhering to legal requirements and maintaining a clear understanding of digital signature protocols, businesses can execute contracts efficiently and securely, with strong backing from national legislation and case law.

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Digital Signatures in Contracts (Part 2)

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The advancement of digital technologies has transformed the way contracts are formalized in Brazil. With the digitization of documents, digital signatures have become an essential tool for companies and professionals seeking efficiency and legal security in their processes. Digital signature solutions stand out by enabling documents to be signed electronically with legal validity, reducing bureaucracy and costs, while also meeting the integrity and authenticity requirements set by law.

A key milestone for digital signatures in Brazil is Provisional Presidential Decree #2,200-2/2001, which established the Brazilian Public Key Infrastructure (ICP-Brasil) and also supports other forms of digital signatures. This regulation ensures that documents signed with ICP-Brasil certification have legal validity, guaranteeing authenticity, integrity, and non-repudiation, making them equivalent to physical documents with handwritten signatures (Article 10, Paragraph 1). Qualified digital signatures are especially useful for contracts of higher value or complexity, where greater legal certainty is desired, as the signatory’s identity is verified and their intention to sign the agreement is confirmed. These signatures function as a unique, non-transferable form of authentication, similar to how an ID is used to verify a signature in a notary's office.

In Paragraph 2, Decree #2,200/01 allows the parties to mutually agree on the use and validity of signatures with other encryption standards. This shows that the legislation permits the validity of digital signatures regardless of the encryption method used.

“Article 10. Electronic documents covered by this Provisional Presidential Decree are considered public or private documents for all legal purposes.

“The statements contained in electronic documents produced using the certification process provided by ICP-Brasil are presumed to be true in relation to the signatories, in accordance with Article 131 of Law #3,071, of January 1, 1916 – Brazilian Civil Code.

“Paragraph 2. The provisions of this Provisional Measure do not preclude the use of other means to prove the authorship and integrity of electronic documents, including those using certificates not issued by ICP-Brasil, as long as they are accepted by the parties or by the person to whom the document is presented.”

In addition to the previously mentioned Provisional Presidential Decree, Law #14,063/2020 also governs the use of electronic signatures in interactions with public entities, legal entities, health-related matters, and software licenses developed by public entities. Its primary aim is to protect citizens' personal and sensitive information, as stipulated in Items X and XII of Article 5 of the Brazilian Federal Constitution and Law #13,709/2018 (Brazil’s General Data Protection Act). This law categorizes digital signatures into three levels: simple, advanced, and qualified. Each level offers a different degree of security, with qualified signatures being the most secure as they require ICP-Brasil certification. Although advanced signatures do not offer the same level of assurance as qualified signatures, they can be used when both parties agree to accept and recognize their validity. For instance, the DocuSign platform supports simple and advanced signatures, but also integrates with ICP-Brasil certificates, enabling the use of qualified signatures in electronic documents such as commercial and financial contracts.

The Brazilian Civil Code also supports the validity of digital signatures, particularly in Article 107, which states: “the validity of a declaration of intent does not depend on any special form, except where the law expressly requires it.” This means that as long as the authenticity and integrity of a document are ensured, contracts signed digitally are legally valid.

1. Executive Title

In 2023, Law #14,620/23 amended Article 784 of the Code of Civil Procedure, adding Paragraph 4, which lists extrajudicial executive titles and recognizes electronically signed documents as valid extrajudicial executive titles, even without witnesses:

“Paragraph 4. In executive titles created or certified electronically, any type of electronic signature provided by law is allowed, and the signature of witnesses is waived when the integrity of the document is verified by a signature provider.”

This legal change to Brazil’s Code of Civil Procedure, which took effect on July 13, 2023, aligns with the precedent set by the Brazilian Superior Court of Justice in Special Appeal #1495920 (2014/0295300-9 of June 7, 2018). It confirms that electronic documents signed with any electronic signature, whether certified by ICP-Brasil or not, as outlined in Article 10 of Decree #2,200/01, are considered extrajudicial executive titles for all purposes, making the signature of two witnesses unnecessary.

2. Brazilian Court Precedents on Digital Signatures

The validity of digital signatures is reinforced by rulings from Brazil’s leading courts, including the Brazilian Superior Court of Justice and various state Justice Courts. The Brazilian judiciary has been progressive in recognizing digital signatures as a legitimate means of formalizing contracts, especially those certified by ICP-Brasil.

In 2018, the Brazilian Superior Court of Justice, in its ruling on Special Appeal #1,495,920/SP, emphasized that digital signatures certified by ICP-Brasil provide legal security and validity to electronic documents. The court ruled that a contract signed with such certification has the same validity as a physically signed document. Even without witnesses, the document is considered an enforceable title as long as the parties use a reliable certificate.

The judgment was based on the following:

“5. The digital signature of an electronic contract serves to certify, through an independent third party (certifying authority), that a particular user has applied the signature, thus effectively signing the electronic document and ensuring that the transmitted data remains unchanged and confidential.

“6. With these new tools to verify the authenticity of the contracting party’s presence, the enforceability of electronic contracts can be recognized.”

The use of asymmetric or public-key cryptography enables the verification of a digital signature by employing two distinct keys: one held by the user and another held by the certifying authority (an independent third party), which identifies that the digital signature was used applied by a user and can be reliably traced back to them.

In a more recent decision, the 3rd Panel of the Brazilian Superior Court of Justice upheld the validity of an electronic signature made on a digital platform not certified by ICP-Brasil. Under the guidance of Justice Nancy Andrighi (Process: Special Appeal #2,159,442), the court clarified that Provisional Presidential Decree #2,200/01 does not mandate the exclusive use of ICP-Brasil certification for digital signatures to be valid and the parties may choose the certification method. The Court concluded that, as long as both parties agree on the method of electronic signature, that agreement must be respected, provided that the necessary standards of integrity and authenticity are met.

Below are five examples of Brazilian case law that uphold the legitimacy of electronic signatures in contracts:

  1. Brazilian Superior Court of Justice – Special Appeal #1,495,920/SP: The Brazilian Superior Court of Justice recognized the validity of electronic signatures, equating them to handwritten signatures. It confirmed that digital signatures have legal value as long as they comply with the requirements of Provisional Presidential Decree #2,200-2/2001, which created the Brazilian Public Key Infrastructure (ICP-Brasil).
  2. Brazilian Superior Court of Justice – Special Appeal #1.495.146/MT: In another case, the Court reaffirmed the legal validity of electronically signed contracts. The decision highlights that, that when supported by ICP-Brasil digital certification, the electronic signature is presumed to be authentic and intact, ensuring the document’s validity.
  3. Sao Paulo State Court – Civil Appeal #1006234-98.2018.8.26.0100: The São Paulo Sao Paulo State Court ruled that electronically signed contracts are valid and effective. The decision noted that a digital signature authenticated by ICP-Brasil guarantees the security and integrity of the contract, resolving concerns about its authenticity.
  4. Minas Gerais State Court Civil Appeal #1.0024.14.298768-4/001: The Minas Gerais Court of Justice upheld the validity of a digitally signed lease agreement. The ruling emphasized that an electronic contract is valid as long as both parties give their consent and applicable laws are followed.
  5. Superior Labor Court – Appeal for Review – 1000048-36.2019.5.02.0431: The Brazil’s Superior Labor Court analyzed the legitimacy of an electronically signed employment contract. The court ruled that an electronic signature certified by ICP-Brasil meets the legal requirements for validity.

3. Bill #4.187/2023

Bill #4,187/2023, currently under review in the Brazilian Congress, seeks to update and expand the legal framework for digital signatures. According to the proposed text, an electronic signature using a digital certificate under the Brazilian Public Key Infrastructure (ICP-Brasil) would be equivalent to notarizing a signature in a notary's office. If passed, this Bill could further strengthen the validity of digital signatures and enhance the security and reliability requirements of electronic contracts.

4. DocuSign and Practical Implications for Businesses and Professionals

DocuSign is one of the most widely used platforms for digital signatures, offering options for simple and advanced signatures as well as integration with ICP-Brasil for documents that require heightened security. The platform allows remote signing of documents, with authentication features that record key data such as the signer's IP address, date, and time of signature. This information provides an additional layer of security, offering further proof of contract validity in case of a legal dispute.

For businesses and professionals, using DocuSign brings significant practical benefits. Contracts that previously required in-person signatures or notarization can now be completed in minutes, reducing both time and costs. The platform also ensures that documents are securely accessible and auditable, creating an electronic record that can be used as evidence in court.

5. Necessary Precautions When Using Digital Signatures

While digital signatures are an efficient and secure solution, certain precautions are necessary. For contracts of higher value, complexity, or importance, it is advisable to use qualified signatures that require ICP-Brasil certification. For less significant or internal agreements, advanced signatures, such as those available on DocuSign, may suffice, as long as all parties agree to the method.

It is also essential for companies to educate their employees and clients about the specifics of digital signatures, including when ICP-Brasil certificates are necessary and the legal implications of each type of signature. This awareness helps to ensure safe transactions and avoid potential disputes.

12. Conclusion

Digital signatures, as regulated by Provisional Presidential Decree #2,200-2/2001 and Law #14,063/2020, represent a significant advancement in contract formalization in Brazil, with their validity further supported by court decisions. The tools available today make the process more accessible, but it is critical that all parties understand the various types of signatures and select the appropriate method for each situation. By adhering to legal requirements and maintaining a clear understanding of digital signature protocols, businesses can execute contracts efficiently and securely, with strong backing from national legislation and case law.

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