E-Signing Contracts in Argentina? Think Again

Much of the world has adopted digital signatures. Everything from commercial and residential leases to loan documents and even tax documents are routinely executed via platforms like Docusign™.  These platforms offer an efficient way to create a binding document with time-stamped and authenticated signatures, rendering unnecessary the analog use of a wet signature and notarial attestation.

Nonetheless, some countries, like Argentina, continue with a more formalist legal system. If a party denies the authenticity of a signature, local law and practice place the burden of proof on the other party, i.e., the one looking to enforce the signature. Likewise, unlike those jurisdictions in which reasonable reliance on “apparent authority” is accepted, Argentine law requires you to verify both the identity and the legal capacity of the signatory.  Ignoring these rules places you at great risk of having to prove the validity and binding nature of an instrument you assumed was effective.

Checking whether an individual has the legal capacity to act on behalf of a corporate entity is a critical step in your diligence process. For corporate signatures, it is essential that you verify the signatory’s power and authority, usually evidenced by a power of attorney or board resolution.

Before executing an agreement with an Argentine company, you should verify:

• Corporate Existence and Good Standing: Obtain up-to-date corporate records confirming the company’s existence and good standing; identify the company’s current statutory legal representatives.
• Signatory’s Power and Authority: Confirm the signatory has been duly appointed as a representative or holds valid power of attorney granting sufficient authority to execute the agreement. Argentina does not use a “Corporate Secretary” for this purpose. The power and authority must be evidenced either (a) by an express document (POA, board resolution) or (b) that person’s status as “Legal Representative” (which is not the same as being a director).
• Scope of Authority: Often it is not enough to verify a person’s legal capacity. Argentina views any power of attorney in narrow Make sure the transaction authority is express and within that person’s transaction limits, if any.

Any diligence checklist should be tailored to the specific transaction and the company’s legal form. Additional approvals or formalities may be required depending on the circumstances.

Argentine law distinguishes between “digital” and “electronic” signatures:

• A digital signature is legally equivalent to a handwritten signature and is backed by a licensed certification authority. It enjoys legal presumptions of authorship and integrity, meaning anyone challenging it must prove it is invalid or altered.
• An electronic signature, while valid for expressing intent, lacks the legal presumptions of authorship and integrity. If disputed, the party relying on it must prove its authenticity.

Do not be caught unaware. Confirming identity, capacity, and authority constitutes a standard process in Argentina. These elements not only determine the burden of proof of a disputed signature or authority but can even affect whether an instrument is binding on the parties.

Do not assume rules transcend borders. To ensure your business and investment objectives, qualified legal advice is crucial.