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News September 2024 - Beware of the difference between digital signature and electronic signature: the very validity of the contract is at stake!

News September 2024 - Beware of the difference between digital signature and electronic signature: the very validity of the contract is at stake!

 

 

  • Reminder:

A decision dated March 13, 2024 (no. 22-16.487) of the French Supreme Court (Cour de Cassation) is a useful reminder of the important difference between a scanned or digitized signature and a so-called “electronic” signature.

Too many people still tend to consider that digitized or scanned signature is similar to a truly “electronic” signature, i.e. one obtained through a specific process that guarantees the identity of the signatory, which is a prerequisite for the valid formation of the contract.

In the dispute in question, a company (Horizon) was suing two individuals and another company in execution of a unilateral promise to sell (PUV) shares, which had been signed to guarantee the default of the company that had been granted a loan by Horizon.

In support of its claim, Horizon relied in particular on the presumed validity of the scanned signatures appearing on the PUV, considering that it was up to the signatories to challenge their validity if necessary.

Following the rejection of its claims by the Court of Appeal of Versailles, Horizon appealed to the French Supreme Court, which upheld the rejection on the following grounds: 

- firstly, considering that “the process of scanned signatures, while valid, cannot be regarded as equal as the one used for electronic signatures, which benefit from a presumption of reliability under article 1367 paragraph 2 of the French Civil Code”.

- secondly, it cannot be inferred from previous e-mails and contracts between the parties on which the scanned signature had already been used, that the signatories of the PUV would have personally agreed to their scanned signatures being affixed to this PUV and would therefore have given their consent to the transfer of their shares in the event of default by the borrowing company.

 

  • Main take-aways:

This decision is therefore a useful reminder of the difference between scanned/digitized signatures and electronic signatures, which – and this is critical – do not have the same legal effect as regards the validity of the document bearing them.

As scanned or digitized signatures are easy to falsify, they do not benefit from any presumption of reliability, unlike electronic signatures.

⚠️ Be careful of the signature procedures you use on your documents! If you use a scanned/digitized signature instead of an electronic signature, you could see your contracting party challenge the validity of the signed document in order to escape from his contractual obligations, and worse, even see his position succeed in court, which would have the dramatic consequence of your contract being regarded as null and void!

As a general reminder, there are currently three levels of signature: simple, advanced and qualified:

- “Simple” electronic signature: consists only of an association of data in electronic form that the signatory uses to sign.

- “Advanced” electronic signature meets the following requirements:

o it is uniquely linked to the signatory, enabling him or her to be identified;

o it has been created using electronic signature creation data that the signatory can, with a high level of confidence, use under his exclusive control; and

o it is linked to the data associated with this signature in such a way that any subsequent modification of the data will be detectable (this is the integrity constraint).

- “Qualified” electronic signature: consists of a process close to that used for the “advanced” signature and gives rise, in addition, to a certificate issued by trusted service providers or companies (PsCo) meeting the criteria set out in Articles 26, 28 and 29 and Annexes I and II of European Regulation 910/2014 (eIDAS Regulation).

⚠️Warning: to date, only the so-called “qualified” signature enjoys a presumption of reliability before the French courts. The other types of signature (simple and advanced) do not benefit from the same assumption: in the event of a dispute, proof of their reliability will therefore have to be provided (via a “proof file”, which is not easy to build).

 

  • Practical contracting tips :

- If most of your contracts are signed remotely: preferably use a PsCo duly accredited in France, such as DocuSign France or Agence Nationale des Titres Sécurisés, to set up a qualified signature.

- If some of your contracts are signed remotely: preferably use a “qualified” signature or, wherever possible, use a face-to-face signature, which does not raise the question of the authenticity of the signature or the identity of the signatory (provided, of course, that the identity and, where applicable, the authority of the signatories are checked on site beforehand).

- at the very least, and as a general rule, include a “proof/evidence agreement” (“convention de preuve clause in your contracts, for purposes of avoiding risk of the validity of the signature being challenged, whatever its form.

 

Sarah Temple-Boyer

Attorney at law

Publié le 25/09/2024