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Avoiding Digital Disasters

A Swiss train manufacturer participated in a 3-billion-dollar, multi-national bid to replace a large number of train components. The details were hammered out, the parties agreed to the terms and the deal was signed electronically. All parties smiled and breathed a sigh of relief, only to learn that the DocuSign electronic signature was not accepted by Austria. Naturally, embarrassment, disappointment and anger ensued. It was everyone’s worst nightmare, and it could have been prevented. 

The rapid advances of technology and the global pandemic preventing people from signing documents in person has catapulted this issue to prominence. It can be difficult to determine if a document has been correctly digitally executed, and different programs (such as DocuSign and Adobe) identify digitally executed signatures differently.   

The Difference between Digital and Electronic Signatures 

A digital signature is a digitized or scanned cursive signature and includes the typed or printed name of the signer alongside. It is encrypted to provide another layer of security and serves to guarantee that an electronic document is authentic. 

On the other hand, electronic signatures are much simpler and usually feature the typed name of the signer to serve as the signature. 

Requirements Vary by Jurisdiction 

While both electronic and digital signatures can be legally binding, it all depends on the specific jurisdiction requirements where a transaction takes place.  The FAA, for example, only accepts digital signatures. Some lenders require one format over the other, and these laws may vary by state or jurisdiction area. Since the agreement will be void if not validly executed, your business can be severely impacted if the wrong signature ends up negating the transaction. 

The use of electronic signatures has increased throughout the COVID-19 pandemic, said Nicole Cuhna of Basch & Rameh, Brazil, who details the specific requirements in her jurisdiction“Electronically signed documents must comply with the technical standards of ICP-Brasil, a cryptographic platform developed by the Brazilian Institute of Information Technology. Documents signed electronically and compliant with ICP-Brasil standards are deemed notarised as if a notary officer legalised the signatures.  

The popular DocuSign platform does not always meet the Brazilian requirements. The digital user must obtain a digital certificate via a token issued per the ICP- Brasil standards,” Cuhna said. 

Check with the requirements for all involved jurisdictions 

A digital signature that is approved in one region may be rejected in a different location. To prevent frustration and legal ramifications, professionals with experience in these areas should scrutinize digital signature concerns, such as the railroad transaction described in this article.  . 

L2b has an extensive network of qualified attorneys to assist, should you need one.  The Aviation Lawyers – L2b Aviation 

This post was created with assistance from L2b members Philippe Wenker at gbf partners, Switzerland, and Nicole Cuhna of Basch & Rameh, Brazil.

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