It is no surprise that the validity of electronic signatures is being put to question by many people.
Whether to dispute a contract or any document so that one can find a way of getting out or just taking a precaution to be sure that the document is legal and binding, there are valid reasons for questioning e-signatures.
The History of Digital Signatures
The world of business has been taken over by digitization and companies that have embraced are 26% more profitable and also have 12% higher market evaluation.
Digital signatures or e-signatures are not new, countries like the US passed the ESIGN act back in 2000 to ease the adaptation of these signatures. This paved the way to a new era of streamlining documents.
Even though esignly has been in use for close to 20 years now, many people still do not understand it and this has led to the question of its validity. The truth is, electronically signed documents are legal and can hold up in a court of law.
Are Digital Signatures Legal?
Apart from the United States, several countries legally use electronic signatures. Countries like Russia, China, Canada, Australia, and all the countries in the European Union have laws in place for these signatures and you can use this signature for a legal agreement.
If you live in a country that has not yet embraced the digital signatures legally, then you have to talk with your lawyer to understand and know your countries policies before using it.
However, when using electronic signatures, it is not only enough that you sign the document, you must have a certified and trusted software provider of the e-signature so that you can be sure that the signature will hold up in court.
Do Electronic Signatures Hold Up In Court?
The E-signatures legal department has two main pieces of the legislation that form the foundation that can address this issue;
- Uniform Electronic Transaction Act (UETA)
- United States Electronic Signatures in Global and National Commerce Act (ESIGN)
There are also some exceptions on what types of documents that these two acts cover. These exceptions include divorce/ adoption/family law, court documents, and uniform commercial code. Apart from these, e signatures can hold up in court.
What Makes Them Legal?
With over 27 countries using esignly legally, it is also important to know that makes these signatures legal. Electronic signature solutions for legal services use some common criteria to certify the legality of the digital signature used.
Some of the ways used to determine the legality of the signature are:
- The signer of the document can be identified uniquely and linked to the signature used
- The signature needs to have a way of identifying it the data associated with it has been tampered with after signing. These are some of the security features that the software used has
- The signer must be the sole party with access to the private key that has been used to create the signature
- If the data has been changed or tampered with in any way, the signature must be declared null and void
Here are some factors that make these signature legal:
1. Intention to sign
Just like with the traditional signatures that need to prove that the signer of the document had the intent of signing, digital signatures should be able to show that as well. There is software that allows the user to opt-out if they do not want to sign the document.
2. Consent
Both parties must express their consent to transact electronically. For example, the software should prompt the users to agree and confirm consent before they sign.
3. A clear signature
A detailed audit trail that runs from the signatures email ID to the IP address to the timestamp each time the user signs a document should be made clear.
The circumstances under which the document was signed will be an indicator to the acknowledgment of a digital signature.
4. Association with the record
Digital signatures must be connected only to the documents being signed. Good software should not allow the signature to be transmitted to anybody except when appended to a document. This will allow for safety because no one will be able to use your signature without your consent.
5. Record retention
The ESIGN Act has put measures in place to ensure the validity of digital signature records. This means that electronic signatures legal services can produce your signature when required. Leading e-signatures software are now providing a fully-executed signed copy or they can be able to download a copy of the document you had signed.
Can digital signatures be used to notarize?
Digital signature software systems are quite secure. Multiple witnesses and signees use a legally binding e-signature. Today, there are eNotaries, who are dedicated to notarizing documents electronically.
eNotaries, validate both the digital signatures and the document, just like in a traditional setting. The notaries give their e-signature and seal and the two are connected with an encrypted public key.
You will still have to pay the notary charges, but you can rest easy knowing that the validity of the signature and the document cannot be questioned.
Using e-signatures saves one a lot of time and money and it is no doubt that it is a trend that might soon completely face off the traditional ways of signing documents.
Several countries are still adopting its use and therefore, you must check the policies of your country before using an e-signature.
Final Word
Digital signatures have become a common topic in the internet, online financial industry, and e-commerce. When correctly done, documents signed using an electronic signature and those signed using the traditional method of a pen and ink, both hold the same legal standing.
Even though there are several differences between the two, the common thing is that each signature needs to abide by the law to make them valid and legal.
