Wet signatures: what are they and when are they required?
Differentiating between signatures types can be tricky. A lot of people confuse the terms “wet signature”, “electronic signature”, and “digital signature”.
But knowing the difference is essential, both from a legal and practical standpoint. Businesses that conflate signature formats are unnecessarily increasing the possibility of disputes later down the line. They’re also sacrificing a myriad of productivity and efficiency gains.
Companies that have well-thought-out business processes in place for the use of signatures will experience a number of benefits, including faster document approval time, certainty regarding the law, and greater overall document security.
In this article, we’re going to define key phrases and outline the best times to use different signatures.
What is a wet signature?
A “wet”, “pen-and-ink” or physical signature is simply a handwritten mark of approval. Whenever a person directly signs a hard copy of a document like a contract or a proposal with a pen, they’ve applied a wet signature. Signatures are usually stylized cursive forms of the signer’s name.
Wet signatures are recognized by most people across the world as a way of approving documents, and most will have their own unique signature. Signatures are meant to be unique to each individual, thus acting as proof that they have signed a document if confirmation is required at a later date.
Most jurisdictions around the world recognize the legally-binding nature of pen-and-ink signatures in some form. Secondary criteria may be required, such as that documents are signed in the presence of a witness or notary to prevent forgeries.
What is an electronic signature?
So what about electronic signatures? Electronic signatures are very similar to wet signatures and the two sometimes overlap.
An electronic signature is any digital mark, such as an image of a wet signature, which is used to approve a virtual document like a PDF.
If you hand-write a signature (a wet signature) and then scan it onto your computer, it becomes an “electronic signature”, although it still might be called a “wet signature”. Many people will store a copy of their electronic signature on their hard drives. Alternatively, they may use an app to automatically generate a new signature in a font of their choice.
A lot of people are unsure about whether or not electronic signatures are legally binding. In the vast majority of cases, the answer to this question is yes, often more so than their pen-and-ink counterparts.
Numerous countries have passed legislation regarding the validity of electronic signatures. Examples include the ESIGN Act (Electronic Signatures in Global and National Commerce Act) passed by the United States and eIDAS from the European Union. The United Nations has also published guidelines to assist states when creating new legislation.
In many cases, electronic signatures are actually more secure than wet signatures because they have a transparent online “paper trail” which includes signing certificates, email exchanges, stored copies of electronic documents, and more.
What is a digital signature?
One common point of confusion concerns the distinction between electronic and digital signatures.
A digital signature is a type of highly-secure electronic signature. Digital signatures rely on public key infrastructure (PKI) to ensure that both signatures and documents are fully encrypted and cannot be altered after the approval.
While the underlying technology is complex, the concept of digital signatures is relatively straightforward. Signees purchase a digital certificate from a certificate authority (CA), which is stored safely on their hard drive or a USB.
This digital certificate, which acts as the signature, can then be attached to any document requiring approval with software like Adobe Sign. A public key, which can be used to verify (but not amend) the digital signature, allows third parties to check authenticity.
Most companies will not need to use digital signatures as in the example above. They are costly and more difficult to use than standard electronic signatures. When high-value, important contracts require approval, it may be worth considering them.
What are the benefits of electronic signatures?
You might be wondering which signatures you should use in your company. Electronic signatures are almost always the best option for signed documents. This is particularly the case if large portions of your document workflow are digitized.
Here are some of the main benefits of electronic signatures:
- Electronic signatures are easier to use because they don’t require recipients to print a piece of paper and scan documents. It’s even possible to sign on a mobile device or smartphone.
- Electronic signature fields are easy to embed in digital documents.
- Companies that use electronic signatures usually have faster and higher approval rates.
- Electronic signatures are easy to verify and fully legally binding, often more so than paper documents.
- Virtual signature tools are inexpensive and often completely free.
With more and more companies switching to electronic signatures, and many even going completely paperless, clients often expect to be able to sign without having to print a document. Failure to offer e-signature features can result in lower approval rates and dissatisfied recipients.
How do you add a wet signature to a PDF?
Begin by scanning an image of your wet signature onto your computer. You can then add it to documents like PDFs.
- Open your PDF document in Adobe Reader or Adobe Acrobat.
- Select Tools > Fill & Sign.
- Select Fill & Sign from the new window that appears.
- Select the Sign Icon from the toolbar at the top of the screen and click Add Signature.
- A pop-up will appear with three options: Type, Draw, and Image. Select the image option (or one of the other options) and upload your signature.
- Click Apply. Move and resize the image according to your specifications.
How do you add a wet signature to PandaDoc?
Follow the instructions below to add a wet signature to a document in PandaDoc. You will need to have a copy of your signature saved on your computer.
- Log into your PandaDoc account.
- Select the Documents tab from the sidebar on the left of the screen. Open an existing document or click Create > Upload to upload a new one.
- In the document editor, select the Content tab from the toolbar on the right and open the Fields menu.
- Click on the Signature option and drag it to the relevant area in the document.
- Once you have placed the Signature field, click on it to open a pop-up box. You should see four options: Draw, Type, Upload, and My Signature.
- Once you have uploaded your image or created a new signature, click Accept and Sign.
Leverage electronic signatures for ease-of-use and efficiency
Electronic signatures are easy to use and fully legally binding. In most cases, they are far superior to traditional wet ink signatures. Companies that use e-signatures tend to have higher approval rates and more satisfied recipients.
If you’re thinking about taking advantage of electronic signatures, a solution like PandaDoc will provide you with everything you need to create electronic forms, add signatures, and track documents. Why not try our free document management plan to see if we’re a fit?