Does the E-signature on a Legal Agreement Give the Document Any Electronic Signatures Are Legally Binding?


Before we go ahead and start talking about esignatures or electronic signatures and how the use of esignature solutions has increased across the globe, especially post COVID-19, let us understand the meaning of electronic signatures. Once you get to understand the meaning and what it does to the business, you will find a new interest in knowing more and more about it and how it can change your business and let you stay ahead in the market.

Similar to the traditional/wet/ink-based signatures, digital signatures are used to sign documents and to give your consent to the content mentioned in the document. However, e-signatures are multi-dimensional. An Electronic signature system allows the signatory to make signatures in different ways like using a stylus or finger to draw signatures on the computing device screen, even in movies; checking the 'I Agree' box, past scanned image of the original signature, etc. Users can use esignature solutions to make signatures with a few clicks. Such signatures have legal backing if the solution used to sign the document is built in compliance with the laws of the land. 

The Legality of Electronic Signatures.

Talking about the legal backing, it is important to know how and what made electronic signatures legal. Digital signatures are valid in many European countries. After the ESIGN Act was passed in 2000, the popularity of the electronic signature grew even more. Many countries across the world are electronic signature friendly. As per the US Federal Law mentioned above, no court of law can deny the validity of an electronic signature just because it is electronic. In short, electronic signatures are as valid as wet signatures.

All the countries that accept the use of an electronic signature system consider it legal, it is done on the basis of three crucial factors. Here are those three factors.

#1 Who Has Signed?

This factor states that the identity of the signatory must be verifiable. There are many ways of ensuring that the right person is making the signature on the document. Identity verification can be done by sending a unique link to the right signatory why email,l SMS, etc. The more and stricter the identity verification method is, the higher the security it will offer.

Along with this, one has to make sure the software is recording and storing every activity that is taking place on the document throughout the process. All these features or requisites make the software a perfect choice for you. If you are deciding on an eSignature Solution for Government Agenciesthen these factors must be verified even more thoroughly.

#2 What Was Signed and What Was the Intent?

Another factor that affects the legality of the signed document is the content of the document and the intention of the involved parties. It is important to verify and check what was signed and Did the concerned parties who were invited to sign the contract intended to sign and legally confirm the document?

This is where the content of the document comes into the picture. This is where what is mentioned in the signed document matters. It is important to know the content that all the parties have given their consent. If the contract changes before the signature process, then a new invitation is sent to the parties. If the document has more than one party, then it will be considered signed only when all the parties sign it showing that they accept this common content and commit to it.

#3 Integrity of the Document.

This is where it is checked if the document is changed or tampered with after the signature process? This also means, that once the document is signed by all the parties, the content should not be changed or tampered with. If the electronic signature used is based on PKI, the document gets hashed and encrypted. Encryption ensures the integrity of the document. Even a minute change in the content such as adding or removing s comma, space, or full stop would generate a different hash and thereby alerting all the parties about the change. In such cases, the document (though signed) is considered invalid.

Read the blog- E-Signature For the Enterprise: The Four Requirements

When an eSignature Will Be Legally Binding?

By now you must have understood that not every electronic signature will be considered legally binding. It is not a brainer to understand that you cannot simply take a picture of your wet signature made on a random blank paper, crop it, and paste it on the documents to call it legal. This process will not be called a valid electronic signature. This process will not be considered reliable evidence as any other person can easily copy-paste your signature from that piece of paper to the concerned document. The legality of the electronic signature made by using esignature solutions will depend upon its capacity to prove or identify the signer, to know who has made the signature, and to ensure that the signed content or the document is intact after the signature. 

Regulation of Electronic Signatures.

Electronic signatures are described in more detail in a few crucial acts like eIDAS. eIDAS is a comprehensive regulation governing electronic transactions in the European Single Market that deals with electronic identification and trust services. While this act is governing the European market, the ESIGN Act is to govern the United States.

Here are a few acts regulating the electronic signature use:

UETA: Uniform Electronic Transactions Act

ESIGN Act: US Electronic Signatures in Global and National Commerce Act

eIDAS: Electronic Identification and Trust Services Regulation

Main advantages of using esignature for the government sector and others.

It saves you time.

If you are a business that has to deal with foreign clients, you understand the importance of speed, security, and high-end services and how smoother documentation will help in closing deals swiftly. If you decide to do it traditionally by printing, signing, and posting the document to the client, it might take days to reach the document to the concerned parties. The other party will perform the same activities and send them back to you. This whole process will take weeks. On the other hand, you can use an electronic signature system to close deals in a few minutes.

Stay mobile and still sign.

The modern world is always on-the-go. People have to or love to commute many times. And while doing this, they wish to perform their duties too, such as buying groceries, shopping, paying bills or fees, or simply, applying for signing a document and confirming a deal. YOu would be able to sign on important business deals while on the go from anywhere at any time across the globe.

It saves you money.

You must have heard the phrase “ time is money”. Esignature solutions prove this phrase right. Using digital signatures, you not only save time and close deals quickly, but you also save costs on expenses such as paper, ink, postage, printing, faxing, etc.

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