What is Considered an Electronic Signature?


Since 2000, e-signatures have been legally recognized under the ESIGN Act and similar international laws.

There are, however, a few transactions that require a signature on paper.

An e-signature, usually the name of the person attached to a contract or form, is an electronic signature that demonstrates consent. They can be used for any transaction.

Many e-signatures allow companies to obtain legally binding consent from agents via their smartphones or computer while on a call. Their efficiency and CX benefits give them an edge over pen-and-paper signatures. Digital signatures, a subtype of e-signatures, are especially secure and rely upon encryption technology.

Electronic Signatures vs. Digital Signatures: What's the Subtle Difference?

Anyone who signs or sends documents can tell the difference between an electronic signature (or digital signature) and not. They are, however, not as subtle for auditors, compliance officers, and judges. An e-signature is a generic term for any signature transmitted electronically-whether it's a digitally-written signature on a document or a signature generated through an eSignature services such as eSignly. Digital signatures are electronic signatures with advanced features to ensure they are secure and compliant.

For agreements or approvals that are not subject to strict security and compliance standards, standard e-signatures might be acceptable. For example, consider situations where an HR professional must approve vacation time for an employee. For internal use, an electronic signature might be ideal.

A digital signature is necessary when dealing with sensitive processes and strict compliance standards. In a basic sense, digital signatures are an electronic signature subset that is more suitable for industries like legal and healthcare. Digital signatures can be audited and encrypted and have other backend tools that ensure authenticity. These digital signatures are very popular for signing contracts, tax documents, and insurance forms.

ESignature Legal Requirements

According to the Electronic Signature and Records Association Act of the United States, an electronic signature can only be legal if all parties agree.

The Uniform Electronic Transactions Act states that every state must have a plan for how e-signatures should work. The E.U. shares this concept the E.U. has adopted it for its member states.

In general, legally binding e-signatures should:

  • Demonstrate that the signer is truly who they claim to have claimed to be
  • It is important to prove that the signer intended for electronic signatures. This can be proved by giving the signer the option to sign on paper.
  • It is shown that the signer is willing to sign (e.g., An option to decline is available, such as a "cancel" button.
  • Independent verification of the authenticity of the signer is possible. This can often be done by obtaining an email trail, timestamps, mobile number, and IP address. For attribution, two-step identification might be useful.

E-signatures that meet the above requirements are legally binding. However, there are some situations where e-signatures can't be legally accepted.

E-signatures are not permitted in many countries or jurisdictions. As a result, they cannot be used for important documents, such as birth certificates, death certificates, divorce certificates, and adoption papers. These cases usually require wet signatures, a notary, or witnesses. E-signatures can also be rejected if they are not computer-literate.

Electronic Signatures: How do they Work?

A business can implement an electronic signature solution by digitizing its documents and converting them to a recognized format (.docx or PDF, PNG, etc.). Once this is completed, the business can add an electronic signature solution to its digital document.

The signer is then asked to sign the documents electronically. Finally, the signer follows the process of creating an electronic signature. However, this process can vary depending on which software was used and what level of security the company requires.

This section will explain how electronic signatures work. It will also discuss how digital encryption can improve security and safeguard against signer repudiation.

Simple e-Signatures Provide Simple Security.

Because they offer few options to verify the authenticity of the user, simple electronic signatures are the least secure.

We have provided the following examples for an electronic signature in the last section:

  • Scanned image of your handwritten signature
  • Clicking on a tickbox to confirm your subscription

It is easy to see how either of these signing methods could have been falsified.

You can scan and upload any additional documents if someone has a copy. How would someone prove that they checked the tickbox on a site?

Although consent can still be proved, it is less likely than more secure signing methods.

These methods can also be used with unlocked documents easily editable by either party after signing. Companies and singers could be affected by a single bad actor.

This level of uncertainty is unacceptable in high-stakes and high-dollar contracts. Therefore, companies must ensure that digital signatures are authentic and cannot be questioned. This is where advanced signing techniques come in.

Secure Encryption and Digital Signatures

Except for the electronic signatures defined by eIDAS, most e-signing processes can be protected with some degree of signature encryption and document security.

These protections make advanced electronic signatures/digital signatures so appealing to companies.

eSignly, a document signing platform, locks a document to prevent further modification during the e-signing process. If a contract is changed while signing, all signatures will be invalidated and must be re-signed.

Each of these security precautions strengthens the idea of nonrepudiation: it is necessary for the organization issuing a contract to ensure its authenticity is impossible to dispute.

It is difficult to dispute the validity of a contract once its integrity and electronic signature have been established.

We'll look below at the encryption methods used for digital signatures to authenticate and protect them.

Asymmetric Encryption

Both parties need to confirm that electronic documents are signed and sent securely. This task is accomplished by modern software that uses public-key encryption.

Asymmetric key cryptography allows parties to independently verify the authenticity of a document by using encrypted keys to validate digitally signed contracts across multiple versions or digests.

Most software applications only allow the document to open correctly (with no alerts or warnings) if all versions match. The process will fail if there are any errors or if anything has changed since the original signing. All parties involved must sign it again.

These additional checks and safeguards allow for electronic identification and audit trails, which make documents more authentic. This is an accepted practice, and many modern business software solutions, such as Microsoft Word, come with pre-built digital signature solutions.

Evidence-Based Authentication

This authentication focuses on verifying that an free signature signed digitally on the document is valid. This is done by sending the document directly to the device or account the intended signatory controls. However, the secondary passcode is required to gain access to the document.

These are three examples of evidence-based authenticity:

  • A company sends a document via email to the signer. However, they also send an access code via SMS text to the signer, which she must use to access the document.
  • To verify their identity, the sender will provide a passcode that the signer must use to review the proposal before they can sign the document.
  • An online document service notifies a signer of an agreement that requires his signature. To access the contract, he must first create an account. After that, he will need to verify his identity and sign.

Companies are using evidence-based authentication to verify the identity of signers. Combining public-key encryption with evidence-based authentication makes it possible to verify the authenticity and enforceability of a paperless signed document.

Beyond the Signing Process

The document is signed and then executed.

This document, taken from the perspective of project management, is now complete. It must be stored or managed, depending on its contents.

You may receive a signature certification if you use free esign app solution as eSignly as a document service. This certificate contains additional security information that can help you verify the signer.

This information can be very useful in the case of a legal dispute, as it gives additional details about the date, time, and place where the signature was made.

The Encryption Technology that Underlies Legal e-Signatures

Public key infrastructure (PKI) is a technology that makes e-signatures legally binding. A PKI allows secure digital signature management by creating two bits of code called keys (a private key and a public key).

The person who signed the document can only use the private key. It is kept secret from all others. The public key is shared by those required to verify the authenticity of the e-signature. In addition, the PKI system guarantees compliance with a certificate authority (CA), an organization with the authority to protect key security.

After the signature is added electronically, a cryptographic key is generated that's associated with the document and acts as a unique digital fingerprint. The private key encrypts and secures the cryptographic hash. The private key is then added to the document, and the signer's public key is sent to the recipient.

The public key certificate allows the recipient to decrypt the encrypted hash. The recipient generates a new cryptographic hash on his side. These hashes are then compared to verify the authenticity of the e-signature and show that there has been no tampering.

What Are the Benefits of Electronic Signatures?

Electronic signatures are becoming an essential business tool and a viable replacement for traditional wet signatures as businesses move toward digital transformation. Here are some of the many benefits of electronic signatures.

Lower Costs

Organizations can save money by using electronic signatures. In addition, they speed up workflows and help increase productivity.

Minimized Errors & Risks

Digital authentication and advanced security reduce risk. Forms can also be pre-filled to avoid human error. Electronic signatures can also provide an audit trail, which helps ensure compliance.

Increased Efficiency

Automated approval workflows allow document owners to see who signed what and when. This streamlines the process and increases employee productivity. In addition, many electronic signature software includes a dashboard tool that easily tracks documents still awaiting signatures. This speeds up the process, which could have taken weeks. The software also stores signed documents making it easier to find them.

Better UX

It is easy to sign a document with electronic signature software. This creates better customer and employee experiences. Electronic signature solutions can also be integrated into existing systems that employees use.

Instant, Convenient, Foolproof

Electronic signatures reduce the time it takes to approve and sign agreements. In addition, electronic signatures can be done instantly. Once you have signed the document electronically, you can move on to the next step.

Electronic signatures make signing documents much simpler. Electronic signature solutions can be carried around so that you can sign documents or request signatures wherever you are. You don't need to print, sign, scan, or resubmit the document. You don't even need a facsimile machine to send or receive signed documents.

You don't need to worry about small mistakes becoming big problems, as many electronic signature systems won't allow you to submit a document until every signature field has been filled in.

Environmentally Friendly

It is time-consuming and annoying to have to scan, print, and fax documents to create an electronic signature. It is also harmful to the environment. Your workflow will be more efficient if you have fewer devices. This is true for all trees that are needed to be felled for the paper you print for hardcopy documents.

Common eSigning Solutions

There are many options for signing, such as the ability to scan and draw your signature or use online tools that allow you to sign quickly and easily.

These are the top options for signing digital documents.

  • Microsoft Word. E-signing solutions in Microsoft Word are simple to integrate into a company's normal workflow. You will need to use the signature tools in Word to create digital signatures and then send the document to the recipients.
  • PDFs. Adobe Sign and Adobe Reader are the most common tools for adding e-signatures to PDFs. To quickly create an electronic signature, you can use the Fill & Sign or Add Signature tools within these applications.
  • Microsoft Excel. If you work with Excel-based content, such as a pricing table or an account report that relies on Excel formulas and the ability to create complex calculations, signing up with Excel is a good idea. You will need to create a Digital ID and suggest signers complete this process. Although it is tedious, it is not difficult.
  • Google Docs. Natively, Google Workspace doesn't support e-signing. You will need to add an extension in your Google Workspace to sign your Google Doc digitally. Choose your preferred esignature option from the add-ons list and install it. Once the add-on has been installed, log in to your preferred free signature app to begin the e-signing process.

ESignature Requirements for the US

The US e-signature laws are based upon two major acts. The Uniform Electronic Transactions Act is (UETA) on the state level. On the federal, the Electronic Signatures in Global National Commerce Act is (ESIGN).

UETA and ESIGN were both passed in 2000. They describe five elements that make an esignature legally binding.

  • Validity Electronic signatures and records have the same legal weight and value as paper and ink versions. It is not possible to invalidate a signature that was electronically recorded.
  • Consent: A person must agree to an electronic signature. This means the business must inform them of certain information before signing.
  • Intent A e-signature is a document that requires the signer to have the intention to sign it. They must agree to the document's contents and fully understand its implications.
  • Recording proof that the e-signature is electronic and not a traditional wet signature must be provided.
  • Data integrity: Documents e-signed need to be protected from unintentional or intentional data loss.

Electronically signed documents can be accepted in the United States in almost all cases. This includes transactions between individuals and the government, businesses, or individuals, and B2B and C2C transactions. In addition, multiple court cases have confirmed the reliability of electronic signatures and enshrined them in case law.

In certain cases, e-signatures may not be accepted in the US. Signatures must contain 'wet ink' or formal notarized signatures.

The following situations are exempt from the use of electronic signatures:

  • Notices and orders from the Court
  • Divorce and adoption agreements
  • Ending life and health insurance benefits
  • Testamentary trusts, wills, and codicils

E-Signature Legal Requirements for the UK

Like ESIGN, UETA, and the UK Electronic Communications Act 2000, an agreement cannot be invalidated simply because it was electronically signed. The Electronic Signatures Regulations Act 2002 in the UK codified electronic signatures.

UK law states that a valid contract does not require a written signature. However, both parties must have an understanding of it and come to a mutually acceptable agreement. An electronic record is an acceptable evidence that both parties have agreed to the document.

E-signatures can be legalized in different ways. Standard Electronic Signatures (SES) are the most basic type. However, it's not considered to have the same weight as handwritten signatures. However, UK law recognizes one type of electronic signature as equal to a handwritten one. These electronic signatures are called Qualified Electronic Signatures (QES) or Advanced Electronic Signatures (AES).


  • The signer only signs it
  • Identifies who signed it
  • Signed using a process that the signer can only access
  • It is linked to other data so that any alteration or tampering can be detected


  • A digital signature approved by the government
  • Signed using a highly secure signature creation tool
  • Under all legal conditions, equivalent to a handwritten sign

The UK accepts standard e-signatures on all documents. This includes employment contracts, HR documents, and sales documents. Other documents may require AES/QES.

Some agreements still need to be signed manually, such as

  • Family law documents include prenups, separation agreements, and other family law documents
  • Real estate deeds include title transfer, mortgage release, and mortgage cancellation.
  • The majority of leases are re-leaseable.
  • Revenue documents and customs

ESignature Legal Requirements for the EU

The Directive on a Community Framework in 2000 recognized e-signatures as legally binding. It was confirmed that electronic signatures could be accepted even if created electronically.

Many European countries agree with the UK's policy of accepting contracts without a handwritten signature as legally binding. As a result, the 2000 e-signature Directive was replaced by the EU Regulation (EU 910/2014), commonly referred to as eIDAS. eIDAS states three types of e-signatures, SES, AES, and QES. This is the same as in the UK.

Standard eSignatures

According to eIDAS, an electronic signature can authenticate any signature with electronic data attached. This signature is not technology dependent and can be included in any electronic document such as Adobe PDF, Microsoft Word, or other formats.

No matter its technology, an electronic signature must clearly show the signer's intent. It must also be signed by the person giving consent and be part of the document to which it is attached.

For most documents and contracts, the standard eSignature is acceptable. Software licenses and real estate documents are also accepted. An SES can be accepted in B2B, C2C, and B2C situations. AES and QES can be accepted in most court briefs, consumer credit loan agreements, residential and commercial leases, and consumer credit loan agreements.

Advanced Electronic Signatures

Advanced electronic signatures must contain additional elements to verify the signer's identity and ensure the document's security. In addition, it must be uniquely linked to the signer and connected to the data so that subsequent changes to documents, such as tampering, can be detected.

Qualified e-Signatures

Lastly, eIDAS defines a qualified electronic signer as the last type. Qualified electronic signatures, both qualified and advanced, are tied to the signer's identification. However, they are based on qualified certificates. Therefore, they can only be issued to an industry-approved certificate authority (CA) that oversees the integrity of electronic signatures.

An EU member state must accredit and supervise a certificate authority. They also need to meet strict requirements under eIDAS. Qualified certificates should be kept on an eligible signature-creation device, such as a USB token or smart card. They must also meet the stringent requirements of eIDAS. There are a few cases in which a handwritten signature is acceptable in the EU, just like in the US or UK.

These Include

  • Contracts to buy or transfer real estate
  • Contracts of carriage
  • Notices of termination for HR
  • Forming a limited-liability company

It is important to keep in mind that every member of the EU has their requirements for esignatures.

The Key Takeaway

Nearly all sectors benefit from eSignature solutions. Remote work is becoming more common, and eSignature has become an essential part of many businesses.

Your business and your clients will benefit from electronic signatures and digital documents. Your signers may find paper-based processes tedious. If the document is not editable, they will need to print, sign and scan it. Your clients will find it easier to access, sign and return their documents digitally.