Define: Legal Instrument

A legal instrument is a formal document or written agreement that serves as evidence of a legal transaction, contract, right, or obligation. Legal instruments are used to establish, define, or convey legal rights, duties, or relationships between parties, and they may be enforceable in a court of law. Examples of legal instruments include contracts, deeds, wills, trusts, leases, mortgages, promissory notes, powers of attorney, and various types of legal agreements. These documents typically contain terms and conditions that govern the rights and obligations of the parties involved, as well as other relevant details such as the identity of the parties, the subject matter of the agreement, and the effective date and duration of the instrument. Legal instruments must comply with applicable legal requirements, such as formalities for execution, witnessing, or notarization, to be valid and enforceable. They play a crucial role in formalizing and protecting legal rights and interests and are commonly used in various legal, business, and personal transactions.

Legal instrument is a legal term that is used for any written legal document such as a certificate, a deed, a will, an Act of Parliament, Power of Attorney, or a law passed by a competent legislative body in municipal (domestic) or international law. Many legal instruments were written under seal by affixing a wax or paper seal to the document in evidence of its legal execution and authenticity (this could often remove the need for consideration in contract law); however, today most jurisdictions have done away with the requirement of documents being under seal in order to give them legal effect.

Electronic Legal Documents

Legal instruments have undergone a progressive process of dematerialization as it is now possible to sign digital documents (known as a digital signature), have them date and time-stamped, or otherwise verify through various schemes of encryption and document authentication without the benefit of actual parchment, seal, stamp, paper, or even ink. These changes have occurred in various ways in various jurisdictions and are hardly uniform. As they are recent, there is also confusion and misunderstanding at many levels, including statute, regulation, and courts.

In particular, the United States Congress enacted the Electronic Signatures in Global and National Commerce Act in 2000, specifying that no court could thereafter fail to recognise a contract simply because it was digitally signed. The law is very permissive, making essentially any electronic character in a contract sufficient. It is also quite restrictive in that it does not force the recognition of some document types in electronic form, no matter what the electronic character might be. No restriction is made to signatures that are adequately cryptographically tied to both the document text and a particular key whose use should be restricted to certain persons (e.g., the alleged sender). There is thus a gap between what cryptographic engineering can provide and what the law assumes is both possible and meaningful.

Several states had already enacted laws on the subject of electronic legal documents and signatures before the U.S. Congress had acted, including Utah, Washington, and California to name only a few of the earliest. They vary considerably in intent, coverage, cryptographic understanding, and effect.

Several other nations and international bodies have also enacted statutes and regulations regarding the validity and binding nature of digital signatures.

To date, the variety (and inadequacy) of the definitions used for digital signatures (or electronic signatures) have produced a legal and contractual minefield for those who may be considering relying on the legality and enforceability of digitally signed contracts in any of many jurisdictions. Adequate legislation adequately informed by cryptographic engineering technology remains an elusive goal. That it has been fully or adequately achieved (in any jurisdiction) is a claim that must be taken with considerable caution.

This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

This glossary post was last updated: 10th April, 2024.