Can a signed message be considered a legal agreement?

Question

In my protocol I'd like to have some legal agreement that if something happen, I will pay the users for it or not(depending in the case specified in the contract). Can I just ask their wallet to sign a message(with terms & conditions) and it will be considered like a signed contract? Can they use this signed message in a lawsuit, like a signed contract?

Answer 1

A signed message from a wallet can function as a legally binding contract if it meets the criteria for digital signatures in the relevant jurisdictions.

Many countries recognize digital signatures as legally binding, equivalent to handwritten signatures. Laws such as the Electronic Signatures in Global and National Commerce Act (ESIGN Act) in the United States and the eIDAS Regulation in the European Union provide frameworks for the legal recognition of electronic signatures.

You can find more details about the criteria for digital signatures in US and Europe, in this article.

One possible complication would be in terms of binding the wallet/private key used for signing the message with the concerned user, due to pseudo-anonymous nature of blockchain. So, you might need to implement KYC procedures where users verify their identity before they can sign the contract. This might involve providing identification documents, linking their wallet address to their real identity through an external verification process, etc.