Does typing your name count as a signature?
Electronic documents are more common than ever before. It’s much easier to send a contract via email than to meet with signers in person, but that lack of direct contact comes with some risk.
- How do you know that the signature actually belongs to the designated individual?
- What if the signer denies that signature?
- And, when signing your own contracts, how does simply typing your name at the bottom create a legally binding e-signature?
Let’s take a closer look at digital signatures and why typing your name at the bottom of a document can become a legally binding affair.
Is a typed signature legally binding?
While there may be some questions about enforceability, you should always assume that typing on a signature line inside a contract will count as a legally binding e-signature.
There are a few reasons for this:
- In the United States, the Federal ESIGN Act, the Uniform Electronic Transactions Act (UETA) set a firm groundwork for electronic signatures.
- In Europe, the eIDAS Regulation does the same thing.
All three documents point out that an electronic signature doesn’t have to resemble a handwritten signature in any way.
The UETA defines an electronic signature this way:
“an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.”
Most other regulations and federal laws offer similar guidelines for digital signatures and electronic records. This means that a typed signature — especially when presented in the correct context — can serve as a legally binding substitute for a handwritten signature.
Accounts, document authentication, and more
While typing your name can count as a legal signature, a business needs to have a way to prove that the individual who typed their name actually signed the document.
The ability to defend against repudiation is critical. Without it, a business has no way to stop a signer from denying that they ever signed a contract, thus invalidating a contract in a court of law.
Creating a defense against repudiation can be done in a number of ways. If you’ve ever signed a digital contract before, you’ve probably experienced a few of these methods.
In many cases, when a company allows typing your name to be counted as an electronic signature, that option is concealed behind something that identifies you as the correct signer for the document.
For example, when companies use PandaDoc to send a contract, they submit the signer’s email. This is something that, typically, only the signer controls. The link inside that email is unique and identifies the signer when they click it. In the case of multiple signers, every link sent from PandaDoc is different so that each individual can review and sign the document separately.
Using this method, PandaDoc creates an audit trail that allows companies to track when a document was accessed, reviewed, and signed. PandaDoc also creates a unique digital certificate at the time of signature to validate the signed document.
However, this is just one way to do it. Some companies force users to create an account. From there, user activity can be tracked and used to validate signed documents.
A company monitoring an account might use IP addresses or two-step authentication methods — like sending a text message, calling a phone number, or validating sign-ins through email — to verify the user at the time of signature.
While there are other ways to do it, the key takeaway here is that while typing your name on a document can count as a signature only possible when your identity can be verified through other electronic means.
This is also true for PDFs. If you were to type your name at the bottom of a PDF and email that to someone, the company could claim that the contract was valid because it was sent via a unique email address that only you control.
What do I need to create enforceable electronic signatures?
To generate signed documents and electronic forms that carry some level of enforceability, you’ll need the following:
- A contract that complies with federal and state laws.
- A way to validate the identity of the signer.
- A method by which to capture a signer’s signature.
You may need to seek legal advice to create a valid contract for your country or state. A contract filled with legal loopholes or vague language can give signers other methods to challenge the substance of your agreements, even if the signatures are valid.
! Before customers sign documents, you need to ensure that the individual signing the document is who they say they are. For single-signer contracts, this could be as simple as sending a contract via email to an individual and asking them to send it back via the same email address.
Finally, you’ll need to capture a signer’s signature. Whether you send a PDF contract and ask them to sign or you use a seamless solution like PandaDoc, someone needs to sign the document for it to have any legal effect.
Dealing with complex contracts
If you’re working mostly in one-on-one situations, capturing signatures and finalizing contracts doesn’t have to be a complicated process.
If you want to keep things simple, sticking to email documentation can work (even if it clutters up your inbox in the process). You could also use the Free eSign Plan from PandaDoc to capture signatures in a simple and secure way — for free!
However, contracts get more difficult to handle as more signers get involved. When signatures need to be captured in a specific signing order or multiple parties want to review the contract and negotiate terms, using email systems quickly becomes a huge hassle.
To execute a contract correctly, you’d need to email the same document multiple times to multiple parties and in a specific order. And, if anything goes wrong, you’ll have to start the process all over again.
For companies looking to stay nimble and efficient when handling business transactions, any level of complexity requires better systems to validate and execute their electronic contracts.
What is the best way to make typed signatures legally valid?
For companies issuing electronic documents, the best way to issue multiple contracts is to use a platform that streamlines your digital signing process.
Platforms like PandaDoc make it easier for your admin team to handle multiple, complex contracts in a fast and efficient way. Unless you plan to have a dedicated contract manager, speed is critical so that your staff can concentrate on other duties.
Most of these platforms offer flexible signing methods where signers can type their name, upload an image of their signature, or sign with a finger or stylus, and submit the result as a valid, electronic signature.
While this is a fast and simple process for your customers and clients, it also provides you with the legal protections you’ll need to validate every typed signature in a court of law.
Go beyond written signatures with PandaDoc
Are you looking for a fast and easy way to capture electronic signatures?
If so, PandaDoc can help you transition your pen and paper documents to a paperless signing process in record time.
Learn how thousands of businesses have optimized their send-and-sign processes using our digital tools and automated workflows.
Sign up for a free 14-day trial and see for yourself how PandaDoc can change the way you do business.