Validity of electronically signed documents: Why it matters

Have you ever found yourself worrying about how you can prove the validity of electronically signed documents?

Many have, whether they’re a small business owner signing a purchase order or a homeowner taking out a new insurance policy.

With eSignatures in their various forms becoming increasingly more common, it’s perfectly natural to wonder about how legally-binding they actually are.

The good news is, they’re every bit as official as handwritten signatures for a large number of documents (providing a few key boxes have been ticked).

Proving the validity of electronically signed documents is essential if they’re to be legally admissible in a court of law. This is made easier with an electronic signature certificate.

Why does electronic signature validity matter?

Electronic and digital signature validity is incredibly important, because if you’re not able to prove the validity of an eSignature, then it’s unlikely that it will be deemed legally-binding.

With a traditional wet signature, validity can be proven by comparing copies of signatures or by testimony from handwriting experts or witnesses to the signing.

With electronic signatures, proving validity can be more complicated, especially when you consider the multitude of ways that an eSignature can be captured.

This is where an electronic signature certificate comes in. It provides a way for you to track who has opened and signed an electronic document.

It contains details such as a document reference, the names of the signers, verified email addresses, and timestamps of when the document was sent, viewed, and completed.

These details all contribute to providing the validity of electronic signatures, even after the signature certificate has expired.

This ensures that electronic signatures can remain legally-binding for many years.

How and when are electronic signature certificates valid?

Electronic signatures are valid in all U.S. states, as in many other industrialized countries.

They are granted the same legal status as handwritten, or “wet”, signatures under state law.

Judges in the U.S. have consistently ruled in favor of eSignatures, thanks to the Electronic Signatures in Global and National Commerce Act 2000, also known as the ESIGN Act, and the Uniform Electronic Transactions Act (UETA) 2011.

However, there are criteria that must be met in order for electronic signatures to be deemed legally-binding:

All parties must consent to signing electronically, and the identity of the signers must be able to be proved.

The identity of a signatory can be proven in several ways, such as providing the email address that was used for the invitation to sign, or with a one-time passcode sent via email or SMS.

The signing parties must understand that they are signing a legally-binding document, and it is their intent to do so.

Every party required to sign a document must have done so for it to be legally admissible, and all parties must have signed the same version of the document.

The process of creating a signature electronically needs to be recorded by the eSignature software being used. This helps to prove the integrity of the document.

A record must be kept of the electronic signatures, and made available for reproduction as required.

There are several steps that can be taken in order to ensure that electronic signatures provide stronger court admissible evidence.

Security measures such as tamper sealing, authentication, and an audit-trail can all help to prove the legality of an eSignature should the matter ever go to court.

In many cases, an eSignature presented alongside this evidence can provide stronger admissible evidence than a wet signature.

What documents can and cannot be signed electronically?

Many documents can be signed electronically, for a range of business and personal transactions.

However, there are still some documents which cannot be signed electronically, and must be signed in ink in order to be legally-binding.

Can be signed digitally

The following documents are all legally-binding when signed electronically:

Insurance policy applications and insurance claims
Real estate transactions, including tenancy agreements
Purchase orders
Sales contracts
Forms and paperwork when opening a bank account or taking out a credit card
Non-disclosure agreements (NDAs).

Cannot be signed digitally

Some documents may require an extra layer of identification when being signed, or require notarization or the presence of witnesses.

The following documents cannot be signed electronically, and will not be legally-binding unless accompanied by a wet signature:

Wills and testamentary trusts
Sworn declarations, court orders, and other official court documents
State statutes concerning divorce, adoption, or other matters of family law
Eviction notices or notices of default or foreclosure regarding an individual’s primary residence
Life insurance policy termination notices
Product recall notices (if the product is deemed a considerable risk to health and/or safety)
Documentation required to legally transport toxic substances or hazardous materials.

Start signing documents digitally with PandaDoc

If you want to ensure digital signature validity, then make sure you’ve ticked all the required boxes.

That means ensuring the intent to sign of all parties, confirming their identity, obtaining their consent to sign electronically, recording the signatures being obtained, and keeping records of the documents.

PandaDoc helps you take care of all of this, and more. It offers trackable eSignatures, signature certificates, and secure encryption.

All of which combine to make sure you can prove the validity of electronically signed documents whenever you may need to.

It provides you with all the tools you need to ensure that all of your signed documents are kept safe and secure, and are legally compliant with eSignature regulations.

Not only that, but it helps you to streamline all of your document workflows, saving you time at every turn.

Try for free