How to sign a contract when the business partner is based in the USA?

Māris Liguts, sworn attorney

Santa Prauliņa, legal specialist

Electronic signatures are recognized in many countries around the world and are becoming increasingly popular. As a result, countries impose requirements to ensure their security and legal validity. In the European Union (EU), strict regulations have been established for electronic signatures that allow one to verify who signed a contract and when, and ensure data protection (integrity). But what should you pay attention to when signing a contract with a company based in the United States? Is it safe at all?

How to sign and verify?

In Latvia, a secure electronic signature is defined as one that meets the technical standards outlined in Regulation 910/2014 on electronic identification and trust services for electronic transactions in the internal market (eIDAS Regulation). Only one signature meets these standards – eParaksts. Meanwhile, the U.S. has different standards for electronic signatures, meaning a U.S. business partner will likely use a signature that is not recognized as “secure” in Latvia.

However, the fact that an electronic signature does not comply with eIDAS does not mean it cannot be used in commercial transactions. It simply means that such a signature cannot be used for notarial acts or documents submitted to state institutions. Therefore, documents with U.S. partners can be signed in the following ways:

• Both parties sign the contract using a U.S.-based electronic signature. For example, Latvian residents can also use DocuSign – a commonly used U.S. e-signature platform. Anyone can obtain this signature, requiring only an active email address.
• Each party signs the contract with their own electronic signature. The technical functionality of eParaksts allows you to sign a document that has already been signed, for example, using DocuSign. This makes it possible for one document to be signed with different electronic signatures held by each party.

EU e-signatures can be verified on eparaksts.lv or dokobit.com. However, signatures used in the U.S. cannot be verified through these platforms. It is possible that the U.S. signature platform provides its own verification tools, so it is advisable to find out in advance what type of signature the partner plans to use, and to check its features, security, and verification options beforehand.

What to consider?

Before signing an electronic agreement with U.S. partners, consider the following:

• It is necessary to identify the authorized person who has the right to sign on behalf of the company. In the U.S., this is usually someone with the title of Director, Officer, CEO, etc. Unfortunately, the U.S. does not maintain a public registry to verify such authority, so you'll need to request documentation, such as a resolution appointing the individual to their position.
• Key transaction elements (who, what, when, for how much) must be agreed upon – this can be done via email. It is advisable to save these emails securely (e.g., on a server), as they may be used as evidence in case of a dispute.
• The contract must state that it is signed electronically. This requirement is present in both U.S. and Latvian legislation. Therefore, the contract must include wording that it is signed using electronic signatures.
• It is recommended to specify the applicable law and jurisdiction in the contract. Ideally, the agreement should state that any disputes will be resolved in Latvian courts under Latvian law – this avoids costly legal proceedings in the U.S. and ensures acceptance of electronic evidence.
• The electronic signature must guarantee data integrity – meaning the document cannot be altered after signing. This can be ensured by signing the contract in PDF format and adding the eParaksts as the last signature. In this way, the Latvian party retains an unchangeable final version.

If problems arise

Electronically signed contracts between U.S. and Latvian entities can be used as evidence in court. To prove legal validity, it is recommended to clearly document that both parties agreed to the essential terms. Latvian law requires a written form (handwritten or eIDAS-compliant signature) only for certain types of contracts, such as employment agreements. Commercial agreements can be concluded using other formats – scans, DocuSign, etc.

Latvian courts accept electronic evidence, so businesses should not avoid signing deals just because the documents are in electronic form. The main point is to store such files in a way that they can be easily accessed and submitted to the court, for example, on a USB drive.

In any case, before entering into a contract with a U.S. partner, it is strongly recommended to consult with a legal professional to ensure full protection of the Latvian company’s interests and compliance with Latvian law.

This article was prepared in cooperation with iBizness.lv

iBizness.lv is a support and advisory platform for entrepreneurs and managers, offering interviews with experienced business owners and expert insights on management, marketing, HR, technology, and finance.