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I need to sign a contract with someone I met online in order to start doing business with him. But how could I possibly know that the information he would put on the digital contract is his real info? How could I know his real name?

Is there a method I can use?

Could I, for example, ask him to send me a dollar through a bank or through PayPal? Would this give me the information I need?

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    It strikes me that this might be a better question for a legal professional in your jurisdiction, since ultimately what you care about is the enforceability of the contract, and what counts as proof of identity in the general case may be quite different from what counts as proof of identity in the case of civil law.
    – Polynomial
    Sep 23, 2021 at 1:27

4 Answers 4

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The only way I know is to have a trusted third party able to assess the real identity of someone you cannot physically meet.

In most European countries what is valid is a smartcard certificate signed by an organization that guarantees to use a secure delivery procedure to ensure that the certificate has indeed been delivered to the right person. It normally involves a face to face operation with a trusted staff member who has confirmed the real identity. And records of the procedure are kept to be used later as proof, should the need arise.

Certificates like that do have a cost and are normally used by medium to large organizations. But they are accepted as a proof by most European law courts.

If it is not possible, you are left with the classical risk/gain balance: what level of risk can you accept to be able to do your business? Tons of ways are possible, from the scan of an ID card to a banking transaction with a small amount of money, but AFAIK none of them will be acceptable as proof. And you will have to accept a remaining risk that the guy using the mail address has a black hat.

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I'm going to repeat @polynomial 's comment as an answer because I think it gets to the most important point. What matters most is how you would enforce the contract, regardless whether the details are accurate or not. You don't say where you are, but consider if you're in country A and I am in country B, how will you enforce the contract terms if there's a disagreement? I may have been truthful when I entered the contract, or I may have made everything up. But unless there's a jurisdiction to enforce it, it doesn't matter whether I've lied or not.

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There are several possible ways to verify the identity nof a person communicating with you remotely.

Other answers have mentioned having a small Paypal or smartcared payment made to your account. However, Paypal, as I understand it, includes only minimal ID info with their payments.

One method woudf be to ask your correspondent to go to his or her bank, and request a bank officer to prepare a letter on bank letterhead something like this:

Mr John Jones, whose signature appears below mine, is known to me as a customer of this bank. He has been a customer since {date}. His address is {Address} A photocopy of his {government ID} appears on the back of this letter. I am having this letter noterized.

{Signature of bank officer} {Name and title of bank officer}

{Signature of Jones}

{Notary stamp and signature}

Have this document physically m,ailed to you. Perhaps have your counterparty also include a copy of his or her bank statement and credit card statement (header pages) with private info blacked out. Call the bank and ask the bank official on the phone to confirm that such a letter was sent. Do this along with the small bank transfer to your account. To fake all this would be a very hard thing, much harder than faking a simple email. The bank account would have to be hacked, a fake government ID created, a notary stamp faked, and someone at the bank corrupted. Probably more secure than meeting a stanger in person.

There are other possibilities involving getting a trusted third party to verify the counterparty's identity and/or government ID.

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It is impossible to verify the identity without meeting them in person and even then there can be issues verifying the identity. One thing to remember when trying to verify the identity online you are dealing with accounts and it can be impossible to know if those accounts have been compromised or not.

Bank/PayPal? Account has been compromised and a hacker has gained access allowing them to do the test transfer without the owners knowledge.

Smartcard Certificate (From Serge Ballesta's answer)? This can also have been compromised with either a physical card stolen or the digital one stolen through some sort of hack. There has been some very critical bugs in the past that has allowed for this to happen. https://arstechnica.com/information-technology/2013/09/fatal-crypto-flaw-in-some-government-certified-smartcards-makes-forgery-a-snap/

The problem is there is always going to be a lot of unknowns and uncertainties with online and there is really no way to have 100% certainty. I have heard of cases of employees at large corporations having their emails hacked and being used to scam their clients.

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