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hat's a Digital Signature And What's Its Purpose?
A digital signature is an encrypted (i.e., coded as in 007-James Bond, C.I.A. stuff) piece of data added to an electronic message such as an e-mail. It is not a scanned picture of your penned signature. A digital signature can be used as a way to form a contract by e-mail or other form of electronic communication.
You create digital signatures by using special software designed for this purpose.
By using a digital signature, you're "signing" your electronic communication. Just like a penned signature, a digital signature serves three major purposes from a legal perspective:
It proves who signed a document (Forgeries of written signatures create problems here. Digital signatures are better-more on this next week).
It identifies what a person signed (The ability to remove a staple from a written document and insert a new page is a problem. Digital signatures are clearly better here-more on this too next week.).
It serves a ceremonial function demonstrating approval and authorization of a communication.
In what ways is a digital signature better than a traditional penned signature?
With a traditional penned signature, proving a forgery is a subjective art and not a science. A well done forgery can be extremely difficult to prove. It's a nightmare for me as a litigator.
With a digital signature, assuming that you:
Keep your password or key a secret; and
Use state-of-the-art software to create your digital signature, then for all practical purposes, it is impossible for anybody to forge your digital signature. The software is that good.
If you are interested in a more technical explanation of why it can't be forged and more information about public key/private key encryption, send me an e-mail. If enough people are interested, I will go into greater technical depth in a future Computer Law Tip of the Week.
For present purposes, just press the "I believe" button and accept that nobody can forge a digital signature. Pressing the "I believe" button may not feel that comfortable, but I point out that you probably drive a car without understanding how an automatic transmission works.
With computers, sometimes we get lost trying to understand how things work. "How" is not always important. Accept that digital signatures work and start using them. What you should worry about is the "ease of use" issue for the digital signature software. (In my opinion, here lies the problem. The software is horrendously difficult to learn.)
With a traditional paper agreement, a person can improperly alter the contents and the signature at the bottom is oblivious to the change. A digital signature is clearly superior here because a digital signature allows the recipient of a digitally signed agreement to detect whether anybody changed the communication after it was digitally signed.
Now, once again, press the "I believe" button. If a document is altered, the recipient can detect the change. How is not important. Leave that to the software developers.
Does the Law Recognize the Validity of Digital Signatures?
The best answer that I can give today is that courts should and I believe will recognize the validity of digital signatures. The problem is the absence of meaningful judicial precedent.
Until your state has a reported court decision recognizing the validity of digital signatures, you cannot be absolutely certain that the signature will be deemed valid. A few states, led by Utah, have passed or are working on digital signature legislation. Legislation certainly speeds the process of creating legal certainty. (Two months ago, I wrote an article for PC World called "The Legal Lag in Computing Law." It generally dealt with the issue of how law always develops slower than new technologies.)
I want to leave you with three key points.
It's very likely that a digital signature will carry the day in a court battle.
A digital signature on an e-mail is better than a completely unverified e-mail.
If the practical realities of your business require you to accept a digital signature instead of a signed paper document, you should go ahead and accept it, but first be sure that you fully understand how it works.