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Digital signatures are everywhere from contract approvals to vendor agreements. But while using them is now common practice, many professionals assume that any digital signature carries full legal weight. That’s not always the case. Understanding what makes a digital signature legally valid is critical for procurement teams, legal departments, and decision-makers who rely on these tools for everyday operations.

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What Makes a Digital Signature Legally Binding?

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In the Philippines, Republic Act No. 8792 (E-Commerce Act) governs electronic transactions. For a digital signature to be considered legally valid under this law, it must satisfy several conditions:

• Intent to Sign: The signer must intend to affix their signature to a specific document. Clicking “Sign” on a digital platform must reflect the same legal consent as a handwritten signature.
  
  
• Identity Verification: The signer's identity must be verifiable, often through secure methods such as OTPs, email authentication, or face-match with government-issued IDs.
  
  
• Consent: All parties must agree to use electronic means for executing the document.
  
  
• Integrity of the Document: The contents must remain unchanged after signing. Any modification post-signature should be detectable and auditable.

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Common Misconceptions

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Many teams assume that scanning a signed document and emailing it counts as a digital signature. Others believe that typing a name into a Word document or inserting an image of a signature is sufficient. While these methods may signal agreement informally, they do not always meet legal standards especially in high-stakes procurement contexts like supplier contracts or purchase authorizations.

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Why Procurement Teams Should Care
Procurement often deals with contracts that involve financial obligations and regulatory requirements. A weak or informal signature method can lead to:

• Disputes over Contract Validity
  
  
• Delayed Transactions Due to Rework
  
  
• Increased Risk During Audits

By ensuring that your team uses legally enforceable digital signatures, you prevent lapses that can delay vendor onboarding, invoice processing, or delivery approvals.

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Not all digital signatures are created equal. Legal enforceability depends on intent, identity, consent, and document integrity requirements that many generic digital tools may not fulfill. If your procurement team is starting to explore digital transformation, understanding the legal basics of e-signatures is a critical first step.

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