§ Digital Agreements

This note contains a description of law content related to the agreement with special focus on the solution developed by Penneo. The document contains the following content:


  1. Introduction to digital signature and NemID
  2. The legal validity of a document that is digitally signed
  3. Proof of agreements signed via digital signature
  4. Use of private vs employee signatures
  5. Legal position in the case of Penneo’s closure



Traditionally, documents are signed by parties signing their signature on a piece of paper, which is guarantee that the signee is who they say they are. When communication shifts from the physical world, to the digital, it is no longer possible to sign using pen and ink. Instead, documents need to be signed digitally. A digital signature is an electronic signature. When the signee signs using electronic communication, it secures that the person’s identity is valid. Digital signatures are an important prerequisite for the establishment of public and private internet services. It makes it possible to use services (both private and public), at all times of the day and it replaces physical documents with electronic ones. The development of digital signatures took place within the last 10-15 years. The first generation of digital signatures was developed by TDC and launched in 2003. NemID is another generation of digital signatures. NemID is developed by Nets DanID and was launched in 2010.

NemID differentiates itself from previous digital signatures because:

a) The user doesn’t require prior installation on their computers

b) NemID can be used on-the-go and on different computers

c) Users can use both a self-chosen username and password or a keycard. Also, NemID is generally considered a safe digital signature.

Penneo’s solution includes NemID as means of digitally signing documents. I this regard, two questions arise:

  1. Is an agreement been signed via NemID, legally valid?
  2. What probative value does an agreement signed via digital signature (NemID) have?

These two questions are answered below.



In Danish law, there are typically no formal requirements for how an agreement should be made. An agreement can be written, oral or tacit. An agreement can also be manifested in a transaction, when the transaction represents a party’s willingness to comply, for example using a handshake. It is therefore not important whether the purchaser of a product or service gives a handshake, signs an agreement or uses a digital message such as NemID, as long as there is consensus that the party has intent to commit and stay committed. There should simply be intent to act. To invoke an agreement, a party must prove that the other party has expressed willingness to be bound by the agreement. The physical signature with pen and ink, is a clear indicator for this however due to flexibility in the structure in Danish Court, agreements can also be proved in a different way(Danish Law 5.1.1).

Signing via digital signature, for example NemID, will similarly be an expression of a declaration of willingness which makes the agreement legally binding. Generally, there are higher evidential requirements for the agreement when the content is more valuable. The above is an expression for normal contract law principles and is further emphasized by a report from The Justice Ministry where it states that “…a digital signature in general, can be compared to a regular paper signature…” (parliament release_1456-2004, page 90, the Ministry of Justice)

Related to this, the following is the E-commerce Directive article 9 – a discrimination ban – a ban against the discrimination of electronic agreements in relation to for example, paper agreements. It is followed by a directive that member states must secure that their court system allows for electronically signed contracts. Among others, it must be secured that legal requirements related to contract agreements, neither hinder the use of electronic contracts nor result in such contracts due to the fact that they are received electronically. Thus, it can be said without a doubt, that agreements can be made electronically using for example, digital signatures. (See the legislation regarding electronic signatures)



In order for it to be relevant to use digital signatures as a means of signing documents, it is worth considering what proof of agreements digital signatures have, specifically NemID. Parties in an agreement entered electronically, for example via digital signatures, are interested in securing proof of a digital signature’s validity, which can be presented if the other party doesn’t want to acknowledge the signature at a later time. The proof of court necessity is typically held with the dominant party whom also holds the rights.

Today it is possible to achieve such a degree of evidentiary certainty validity of electronic documents by using the right technology and business processes. In this regard, the Administration of IT and Telecom has released a guide on securing a digital signature’s probative value. In the guide it explains and describes five models to ensure the probative value.

Penneo offers its customers a preservation of evidence along the lines specified in the Danish Administration of IT and Telecom’s recommended Models 4 + 5, on “System certificates and timestamps generated by third parties.” Penneo validates the validity of the user’s used digital signature (NemID) and stores the information, including the user’s identity and the time of signing, for future use in the event of doubt and dispute concerning the evidence. Penneo’s system ensures that none of the signatory parties, at a later date, have access to change the log and thus change the agreement.

The advantage of this method of evidence insurance, is the proof of the digital signature for validity is generated by one of the contracting parties’ independent third party. This method is comparable to signing a will in front of a notary, implying a proven high degree of safety.



Often, companies need their employees to sign documents or enter into agreements on behalf of the company. Assuming the company wants to empower its employees to do so, the use of NemID make this process easier. Companies may choose to use NemID employee signatures, which the firm orders for use for its employees. This allows employees to sign contracts, documents, and more, on behalf of the company, with the company’s own NemID issued to the employee.

The company can also choose to let employees use their own private NemID signature. The private NemID signature contains a personal identification, so the employee can be identified, which is equivalent to the employee signing with pen and paper. Both options are legally viable, provided that the employee is otherwise authorized to act on the company’s behalf.



According to the Penneo’s terms, the client has ownership of their own data. The client thus retains ownership of their own data regardless of whether Penneo has to shutdown, for example by liquidation, bankruptcy or the like. Furthermore, Penneo’s clients can even choose to keep a copy of the signed documents, by which cessation of Penneo will have no further impact on the client.

Copenhagen February 4th 2013

Frederik Bruhn
Dahl Advokatfirma

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