Are eSignatures legal and enforceable in Germany?
An electronic signature in Germany can be described as electronically encrypted data that can be used to associate with several digital documents as a form of signature, which validates such a piece of digital information. In many countries, this type of signature is legal and enforceable in a court of law in the event of a legal dispute or the validation of a legal document. However, each country or union has a different set of rules and standards for the creation and application of an electronic signature. In this regard, Germany is no exception.
Germany has officially and legally accepted an electronic signature called the German Signature law since 2001. As an economic giant and a superpower, Germany was amongst the first countries to legalize the use of electronic signatures for a wide range of applications with a few exceptions. As such, the country is one of the leaders in the digitization of processes and the establishment of a paperless economy.
Additionally, the European Union had implemented the Electronic Directive since 1999, which further propelled Germany’s digital push forward. The EU’s move was made to provide modalities for the implementation of electronic signatures and other digital processes across the Eurozone.
These regulations were standardized across Europe when the EU introduced the Electronic Identification and Authentication Services or eIDAS in 2015, which repealed the earlier Electronic Directive in 1999, and provided detailed guidelines and regulations for the use and legality of electronic signatures.
- History of electronic signatures in Germany
- The legal provision for electronic signature in Germany?
- The three forms of electronic signature
- Difference between electronic signatures in Germany and other countries
- German law signature requirements
History of electronic signatures in Germany
Germany is credited as being one of the first countries in the European Union that declared a law on digital signatures. It set the pace and provided a framework on which the EU and other countries were able to develop and advance the use of the digital signature in Germany. On 1 August 1997, the Act on Digital Signatures came into force. However, these were subsequently modified when the Electronic Signature Directive and the more recent Regulation were introduced.
These directives are aimed at electronic signatures in general but they are not restricted to the use of digital signatures only as the legal model in Germany will show.
Germany abides by the Civil Law systems. These systems are organized based on a plan or framework which takes root in Roman law. A civil law system ordinarily has more prescriptive than a common law system.
It offers a number of stipulations intended to result in contracts being shorter than those within a common law country. However, many provisions are inferred into a contract by law, and individuals may not contract out of certain fundamental provisions.
Only legislative enactments are considered binding for all while there is little purview for judge-made law in civil, commercial as well as criminal courts.
For instance, in Germany, the writings of legal scholars have a significant influence on the courts as well as specific underlying codes.
Therefore, usually separate constitutional court, an administrative court, and civil court systems that opine on the consistency of legislation and administrative acts with and interpret that specific code.
A written constitution that possesses some specific codes (such as civil code, codes that incorporate administrative law, corporate law, constitutional law, and tax law) that preserve fundamental rights and responsibilities is the basis of the civil legal framework.
A little scope exists for judge-defined law in the civil, criminal, as well as commercial courts (only legislative mandates are binding on all).
In some civil legal settings like Germany, the writings of legal professionals and scholars possess a significant impact in the courts.
The legal provision for electronic signature in Germany?
A written signature is not compulsorily required to validate a contract in Germany. Contracts are said to be valid when legally aversed parties reach a consensus, be it verbally, electronically, or through the use of a physical document. (you can refer to section 125 and 126 of the German Civil code).
To verify a valid contract or agreement, parties may need to provide evidence in a court of law. They may need the service of a leading electronic signature tool to present relevant evidence.
Not only that, Regulation(EU) No 910/2014, which is based on trust services and electronic identification within the internal market (or the “eIDAS Regulation), was enacted in July 2016. This regulation not only repealed but also replaced the electronic Signatures Directive (1999/93/EC). It is applicable throughout the domain of the 28 Member states of the EU.
The Significance of the eIDAS
Before the enactment of eIDAS, each EU Member country was under the obligation of complying with the eSignature rules in a specific country. For example, in a situation where a German citizen sent a document to another individual in Sweden, they would check and verify that both countries’ digital signature laws match.
Immediately the eIDAS was enacted in 2016; a consistent framework was established which defines how electronic signatures are utilized throughout Europe. The legal implication is that when a German citizen sends an electronic document to his or her counterpart in Sweden, the document is deemed safe, enforceable, and valid.
Electronic signatures are legal and court-admissible for corporate use under German law. However, there are a few exceptions that are highlighted below.
The three forms of electronic signature
There are three main forms of electronic signatures under EU law (Check Art. 25 et seq. of Regulation (EU) No. 910/2014). They are grouped into “simple”, “advanced,” and “qualified” electronic signatures.
Moreover, the eIDAS provision is technology-neutral and explains three styles of eSignature (SES, QES, AES).
A standard electronic signature or SES is usually typed and scanned. This form of signature does not provide an apparent proof of the person that signed the document. This signature is the simplest type of electronic signature. It does not contain any security encryption. As a result, it is quite susceptible to forgery and security breaches.
QES or Qualified Electronic Signature, as well as Advanced Electronic Signature(AES), on the other hand, are trusted as forms of signatures. eIDAS classifies QES in the category of a handwritten signature.
Also, the regulations stipulate that electronic signatures cannot be considered inadmissible in the court of law for not meeting the requirement of a Qualified Electronic Signature.
Advanced Electronic Signature
An advanced e-signature is any mark that uniquely identifies you as the signatory, and ensures that you are the source of the data content you signed. Moreover, any further changes made to the data content after you sign must remain detectable.
Qualified Electronic Signature
A qualified e-signature is a more advanced electronic signature, which is generated using a secure device. Such devices use signature encryption and verification technologies, to make sure the signature is tamper-proof and is easily verifiable.
Furthermore, any change in the Qualified Electronic Signature is traceable.
This can be found in Article 25, paragraph 1. Article 25, paragraph 2, and 3 considers QES to have the same effect as a handwritten signature.
It also guarantees that what is admissible in one member state is presentable in other Member states. Lastly, Recital 49 permits national law to establish conditions relating to which form of eSignature may be needed in what situations.
Electronic signatures can be used by service providers and German citizens to sign the following documents- HR documents, commercial agreements, real estate documents, and some patents and copyrights.
An exception exists where it is stipulated that only handwritten signatures can be used, such as Marriage contracts, Property purchases or transfers, Wills or Inheritance agreement, Employee termination messages.
Summary of Documents That You Can Sign with Electronic Signatures
You may sign most HR documents using electronic signatures, which include employment documents, temporary employment agreements, benefits paperwork, and onboarding paperwork.
Some of the commercial agreements that you can sign with signatures include business-to-business sale agreements, non-disclosure agreements, invoices, and purchase orders.
You can sign business to customer agreements using an e-signature. Such agreements include licensing agreements, terms and services agreements, order confirmations, and retail accounts.
Real Estate Documents
Tenants and property owners can also sign their real estate agreements using electronic signatures. Such documents include rental agreements, leases, and renovation contracts.
Certain Patents and Copyrights
You can also sign Patents and Copyrights with electronic signatures, especially when they are part of a patented product, or that is registered as a copyright.
Summary of Documents You Cannot with Electronic Signatures
You cannot sign any deeds or documents that can be used in place of deeds, using an e-signature.
If any document needs to be notarized for it to be legally binding, then you cannot sign with an electronic signature.
Termination of Employment Relationships
While you can sign an employment contract with an electronic signature, you must sign an employment termination letter with a written signature.
Family Law Documents
When issuing any document that guarantees that you will provide or grant maintenance under family law, then you must sign with a written signature.
You have to sign every guarantee of a declaration that you issue.
You must sign any abstract promise of debit that you make.
You have to sign any abstract acknowledgment of debt that you make, with a written signature.
Agreement with Local Government
Any agreement that you make under public law with the local government must be signed with a written signature.
Difference between electronic signatures in Germany and other countries
The key differences lie in the definition of “signature” in national law and have this is expressed in an electronic authentication policy. Nations such as Hong Kong, Taiwan, Turkey, United Arab Emirates, Israel, Norway, South Africa, Switzerland, and some others generally follow the European Union Directive on Electronic Signatures so it would be quite similar to Germany’s.
One of the best known digital laws is those of the United States. Here, the ESIGN digital signature laws are typically directed toward removing obstacles to the acceptance of electronic authentication, smoothen business proceedings, and minimizing evidential uncertainties.
In contrast, the German Digital Signature Law is influenced by the European Union. However, these laws do not address the legal status of electronic signatures directly. Instead, it places high-security and technical standards as the priority. It is motivated by comparatively strict requirements for pen-on-paper or conventional signatures.
Despite the fact that several commercial transactions according to German law do not necessitate a specific form of a handwritten signature. Meaning that over 90% of all agreements are signed only to show demonstrability of the agreement, and not for legal reasons. However, when it comes to electronic commerce there is a shift in principle.
German law signature requirements
- Authentication, conventionally performed by a notary
- provided for by statute
- agreement by the parties to apply statutory signature requirements
- A record of a protocol of declarations concerning a court settlement that is used in place of notarial authentication.
Most agreements require only a simple electronic signature although there are few key restrictions. These agreements are typically related to real estate, notarized documents, and marriage are exempt from the law. Notwithstanding, with the current COVID19 pandemic, many organizations have partially or wholly made their activities online or through digital media. As such, it is likely that even those restricted documents may eventually be allowed to be signed with electronic signatures, primarily as more and more marriages are carried out online. In light of this, there are ongoing efforts to increase the use of electronic signatures in Germany and across the European Union.
Consequently, since there are maybe certain nuances when it comes to electronic signatures in different countries, these should be considered rather than sticking to a one-size-fits-all solution. Because of this policymakers have slightly different concepts in mind about electronic signatures.
This includes electronic signatures involving seals, time stamps, registered delivery services, and certificates for website authentication.
PDF.co complies with the electronic signature regulations of Germany so you can utilize the service.
The use of electronic signature in Germany paved the way for the advancement and acceptance of the signature in everyday activities. The evolution of electronic signatures within the country, and the EU, in general, was gradual and systematic. The German Government has rolled out detailed guidelines that have provided the individuals and organizations with the legal structure to generate legally binding documents signed with an electronic signature. This legal framework also accommodates the use of electronic signatures on almost all documents with a few exceptions.