What can be done digitally?

In today's mobile-device-driven world, there is a growing desire to avoid paper and handle legal matters digitally whenever possible. Signature programs, such as DocuSign®, which enables easy signing directly on the screen, are particularly popular.

This often leads to confusion about what can be signed digitally or electronically, and what cannot.

In principle, a digital signature is permissible unless the law prescribes a stricter form (more on this below). As Section 125 of the German Civil Code (BGB) stipulates, German private law generally allows for freedom of form. This freedom means that oral declarations would generally suffice. However, since orally concluded contracts and declarations are difficult to prove in the event of a dispute, in practice at least written form is usually required. Written form refers to a form that is in some form or other (including digital).

Since the legal regulations regarding formal requirements are widely scattered, and courts and notaries also impose additional formal requirements, it is sometimes not easy to keep track.

At notiq, we strive to support our clients in the most digital possible representation and handling of their affairs, and in particular to avoid imposing any notarial formal requirements that do not arise from law or case law.

This article provides an overview of documents that cannot be digitally signed. It should always be noted that the contracting parties may also agree on a specific form.

Overview of formal requirements

Text form (§ 126b BGB) = at least a typed declaration that identifies the issuing person (e.g. email or scan of a handwritten signed document or a version signed with e.g. DocuSign®)

Written form (§ 126 BGB) = signed with a pen ('wet ink'), original must be presented (= scan is not sufficient)

Electronic form (§ 126a BGB) = electronically signed and thereby provided with a qualified electronic signature (qualified electronic signatures are not yet widespread); can replace the written form.

Certification (§ 129 BGB) = signed in the presence of a notary public who identifies the signatory with an identity card or passport (partly also online)

Notarization (§ 128 BGB) = read aloud by the notary (partially also possible online)

Overview of processes requiring formal form (where DocuSign® is not sufficient):

Special case: Powers of attorney

Powers of attorney (or subsequently issued declarations of approval) can generally be granted informally (i.e., in written form for reasons of proof and practicality). According to Section 167 Paragraph 2 of the German Civil Code (BGB), even for the conclusion of a legal transaction that requires a specific form, no corresponding form is generally required for powers of attorney, unless a specific formal requirement exists under law or case law.

Overview of formal requirements for powers of attorney:

However, notaries often insist on powers of attorney that are at least handwritten or even notarized, and which must be presented in their original form at the time of notarization. This is despite the fact that neither the law nor case law actually stipulates any formal requirements.

Original powers of attorney signed by hand have the advantage that, according to the provisions of the German Civil Code (in particular regarding the legitimizing and apparent authority functions pursuant to Sections 172 and 179 of the German Civil Code), the other parties may rely on the fact that the power of attorney in question has not been revoked as long as the original document exists. Powers of attorney certified by a notary public have the additional advantage that the certification ensures the identity of the signatory and prevents someone else from simply signing.

In today's practice, characterized by mobile devices and digital processes, this additional protection is often waived by mutual agreement.