Posted 5th January 2024
When considering switching to electronic signatures, most businesses have questions about the legality of this modern technology; they want to ensure that digital signing is secure and of course, legally enforceable.
At eSign, we know the many benefits that an electronic signature can bring to a business, such as improved document turnaround and an enhanced customer experience for clients. But we want every business, in every country and every sector, to have the confidence to make the switch.
That’s why we’ve decided to answer your most pressing questions about eSignatures and the legalities surrounding them. Simply put, yes, they are 100% legally binding. For the ultimate peace of mind that digital signatures and documents are legally binding, keep reading.
An ‘electronic signature’ is a digitized version of the traditional handwritten signature, which can be used to sign documents online, so there’s no need for printing or scanning. An electronic signature can be as simple as a tick box plus declaration, scanned signature, or digitally drawn signature.
For increased security, verification, and compliance, however, it’s commonly accepted that advanced or qualified electronic signatures should be used. eSign’s platform identifies the signer, creates a time stamp using their IP address and will detect any changes made to the document after signing has been carried out.
A wet signature is a traditional way of signing a document by putting pen to paper. It indicates the signer’s intent to agree to the contents of a document or to a set of data to which the signature relates, making them legally binding. Putting pen to paper has been an established way of carrying out business for hundreds of years. Yet in an increasingly digital world, the humble signature was forced to evolve to keep up.
This is how the electronic signature was born! Whether you’re typing out your signatures or digitally drawing them with your mouse cursor, the electronic signature enables you to sign documents online– without having to print them out and sign by hand.
Yes, electronic signatures are admissible in court. The electronic signature itself demonstrates the intention to agree to the contents of the document. They can also provide additional evidence of ‘intention’ that handwritten signatures cannot supply.
With handwritten signatures, the validity is established by comparing copies of the signature with testimonies from handwriting experts or witnesses of the signing. Thanks to the electronic signature’s audit trail which contains information such as the IP address, location, and date/time stamp, determining the authenticity of an electronic signature is actually easier, more time-efficient and cost-effective.
The eIDAS Regulation defines three levels of electronic signatures:
Both advanced and qualified electronic signatures can offer greater authentication, integrity, and non-repudiation, and are therefore more suited to higher value transactions… and are just as legally valid as traditional ‘wet’ signatures.
Whilst most businesses will accept electronically signed documents, some statutory bodies do place restrictions on electronic signatures. Due to social distancing restrictions during COVID-19, more and more international Government bodies are now accepting electronic signatures.
There can also be complications around witnessing electronic signatures which make them unsuitable in certain circumstances. If in doubt, it’s best to ask the recipient whether they will accept an electronically signed document.
eSignatures have been recognized as legally binding in various countries for a number of years now. For example, they have been accommodated in European Law since 2016 by the eIDAS regulation.
In the United States of America, the Federal Electronic Signature in Global and National Commerce Act (the E-Sign Act) confirms that a ‘signature cannot be denied legal effect or enforceability solely because it is in electronic form’ and that ‘if a law requires a signature, an electronic signature satisfies the law’.
Every country around the world has different legislation surrounding electronic signatures. If you’re conducting business internationally, it’s always advisable to check the rules and regulations of that region or country.
Regulation (EU) No 910/2014 on electronic identification and trust services for electronic transactions, commonly known as eIDAS, took direct effect in EU member states from 1 July 2016. It established an EU-wide legal framework for electronic signatures. eSign’s digital signature solution is compliant with eIDAS and EU electronic signature technical standards. eSign is also compliant with GDPR.
eSign’s digital signature solution complies with the definition of an eSignature under the Electronic Signatures in Global and National Commerce (ESIGN) Act, the Uniform Electronic Transactions Act (UETA) and the Digital Signature and Electronic Authentication Law.
ESIGN Act (2000) addresses eSignatures and e-records, allowing for electronic signatures in all 50 states when federal law applies. It defines an eSignature as an electronic sound, symbol, or process that is attached to or logically associated with a document, and executed or adopted by an individual with the intent to sign and be legally bound. eSign also complies with the Uniform Electronic Transactions Act (UETA, 1999).
The UK follows an amended form of the eIDAS regulations which was adopted into UK law through the European Union (Withdrawal) Act 2018. This follows a similar structure to the original eIDAS regulations with the same definitions and criteria for each of the three types of electronic signature. Also, in 2019, the Law Commission confirmed the validity of electronic signatures. Brexit has not had any adverse effect on the admissibility and legality of eSignatures in UK law.
The Electronic Transactions Act was introduced in Australia in 1999, almost all documents can be validly signed with an electronic signature, with little overall requirements. In Australia, there is also no legal difference between traditional and electronic signatures.
The Electronic Transaction Act (ETA) came into effect in 2002, which allows e-signatures to be considered equivalent to wet ink signatures in almost all cases. The act outlines two conditions that must be met for the signature to have legal effect:
For a full list of the eSignature Laws around the world view our recent blog on eSigning Internationally.
If you’re looking to implement an electronic signature across your business, why not consider eSign as your dedicated provider? Try our 14-day free trial today and discover the time- and money-saving power of eSign for yourself.
Improve Efficiency
Switching between digital and paper documents is unnecessary and time-consuming, adding extra steps into your workflow such as printing, scanning, and posting. By adopting an electronic signature, you can easily create, sign, and send out digital documents in just a few clicks, allowing you to improve operational efficiency and save time on managing your documents and eSignature collection.
Save Money on Paper
The cost of collecting signatures and processing paper documents can all add up, especially if you rely on documents and signatures to get business done. By using digital documents and electronic signatures, you can eliminate spending on paper, envelopes, stationary, and postage, as well as the money spent on printer ink, toner, and the maintenance costs of this equipment.
Embrace Hybrid and Home Working
Not all your employees will have a printer or scanner at home; so using traditional signatures may therefore not be viable if your employees need to work away from the office. If your business is looking to offer hybrid or home working options, adopting a digital signature provides the software your employees need to sign and generate digital documents at home, allowing them to continue working effectively from any location.
Boost Document Security
Using a traditional signature can mean that you’re sending out sensitive contracts or documents in the post or arranging time-consuming in-person meetings to collect your client’s signature. With an advanced or qualified eSignature you can collect signatures whilst managing the risk of fraud. Most providers will also offer expert cybersecurity, as well as extra protective measures, to ensure your documents don’t fall into the wrong hands.
Enhance Customer Experience
Using electronic signatures and digital documents not only brings benefits to your business but also to your clients. Paper-based processes can be time-consuming for your signers; if it’s not an editable document they’ll have to print, sign and either scan or post the document. Keeping everything digital ultimately makes life easier for your clients, enabling them to view, eSign and return your documents in just a few clicks.
eSign is a leading provider of digital transaction management solutions, supplying professional services including Electronic Signatures, Web Forms, ID Checker, Verification Tools, Personalized Emails, API and Payment Processing to businesses of all sizes across the US.
To find out more about our eSign solutions and how they could transform your business, get in touch with us today.
