Electronic signature law

E-signatures are considered legally binding when they satisfy all requirements in a given country or region.

However, keep in mind that regional requirements may vary.

For example, in the United States, electronic signatures are governed by the Uniform Electronic Transactions Act (UETA) and the Electronic Signatures in Global and National Commerce Act (the E-SIGN ACT).

Individual states may place additional requirements to further authenticate or validate electronic signatures within their respective jurisdictions, such as the Electronic Signatures and Records Act (ESRA) regulation passed in New York State, so long as the comply with the Uniform Commercial Code (UCC) governing the user of electronic records and transferable records. These state laws, in conjunction with federal regulations, create the basis for most electronic signing governance in the US.

At the same time, electronic signatures in the European Union are governed by the eIDAS Regulation, which sets out different rules, requirements, and tiers of authenticity for signatures acquired via electronic means.

While applicable law will vary based on region, the end result is largely the same: Following the appropriate legal standard will render an electronic signature legally valid in the eyes of many world governments.

Many transactions are supported by electronic signatures. In most jurisdictions, this includes each of the following:

• Business contracts.
• Financial transactions.
• Employment agreements.
• Medical consent forms.
• Personal and consumer transactions.
• Real estate and real property transactions.
• And more.

Further, some governmental agencies may accept electronic signatures when captured by approved certificate authorities, workflows, or electronic notarization methods.

Yes. In some areas of legal practice, electronic signatures may not be considered valid or equivalent to a handwritten signature.

In the United States, electronic signatures are most commonly disallowed in matters of family law, adoption, wills, and testamentary trusts. Each of these scenarios requires a signed document with a wet ink (physical) signature.

While some methods exist to generate e-signatures that are considered to be more authentic than handwritten signatures, these methods will not apply in scenarios where the law itself renders all electronic signatures invalid.

According to the UETA, and electronic signature is defined as:

“…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.”

The eIDAS Regulation defines e-signatures this way:

“…data in electronic form which is attached to or logically associated with other data in electronic form and which is used by the signatory to sign.”

Other important legal requirements may include:

• Consent. All parties must agree to use electronic signatures and intend to sign a document.
• Identity. The identity of the signer must be identifiable. This is usually done through security instrumentality such as IP capture, secure logins, email-based authentication.
• Tamper-evident. The integrity of the document must be properly maintained after the signature process begins. This is typically handled by locking documents to prevent changes during the e-signing process.
• Retrievable. Parties must be able to reproduce the signed document.

Documents that do not pass basic legal requirements or that fail basic security procedures are subject to invalidation or cancellation by the appropriate governing bodies.

Electronic signatures are a broad category of methods by which an individual may sign documents electronically.

This definition is a catch-all for any signing methods that comply with the broad legal requirements listed in the UETA, the eIDAS regulation, or similar governing documentation.

By contrast, digital signatures are a specific type of electronic signature created using cryptographic techniques to verify the authenticity and integrity of a document and its signer.

Many modern digital signatures rely on asymmetrical cryptography (public key and private key encryption) to validate proper signer attribution and ensure that a document hasn’t been tampered with since it was signed. This is combined with a signing workflow and governed by an electronic agent to create a valid signing process.

Because of the additional security involved, digital signatures are considered to be one of the most secure methods of electronic signature capture.

Generally, electronic signatures are considered equivalent to handwritten signatures.

However, this may vary by region.

For example, under the eIDAS regulation, electronic signatures are divided into three distinct categories based on the methods used to capture the signature for a particular transaction.

Under eIDAS, only a qualified electronic signature (QES) is equivalent to a handwritten signature. Even advanced electronic signatures — the equivalent of a digital signature in many other parts of the world — does not hold the same legal weight as a handwritten, wet ink signature under eIDAS law.

In some case, use of electronic records can be invalidated if documents bearing handwritten signatures express conflicting information.

Typically, electronic signatures do not expire.

However, the document to which the e-signature is attached may have a set expiry date. In that case, the electronic signature may be rendered invalid upon later reference due to the invalidity of the document itself.

In some jurisdictions, it may be possible to revoke an electronic signature.

However, because e-signatures are legally binding, such a revocation may be costly, complicated, or downright impossible.

Particularly for business contracts, where revoking a signature could cause business partners to incur substantial losses, contract penalties and/or litigation may follow.

Be sure to consult with legal counsel prior to attempting to revoke an electronic signature.

Electronic signature laws within the European Union are governed by the eIDAS Regulation, which provides a modernized legal framework for multiple forms of e-signature capture.

This regulation defines three distinct levels of electronic signature, establishes a system for signature e-signature acquisition through trusted service providers, sets forth requirements like audit trails and identity capture, and allows for cross-border recognition of electronic signatures across all EU member countries.

Similar to the US, the legal landscape regarding how e-signatures can be applied within a given country may vary, but eIDAS provides a legal basis for all EU-based electronic signing.

Electronic signatures are most commonly used in business operations to streamline and acquire legal consent. They are often used in contracts, proposals, agreements, consent forms, and a variety of other formats.

These signatures are companions to electronic documents. The acquisition of digital, legally binding consent from all signing parties removes the trouble of printing and digitizing paper documents and optimizes record retention while speeding up everyday business processes.

Additionally, using digital signatures also allows businesses to operate globally by creating electronic records that comply with federal laws and international regulations.

Digital signatures provide unmatched flexibility in the world of document generation. Consent forms can be sent via email. Contracts can be viewed electronically within a collaborative workspace by all parties. Deals can be signed quickly, enabling faster and better electronic commerce.

However, this is only possible as long as the legality of electronic signatures is upheld by the country where the contract takes place. Without the appropriate legal effects in place, documents would need to be mailed for physical signatures, and the pace of business would experience significant delays.

Fortunately, electronic signatures are recognized as legally binding entities in many places around the world, including the United States and the European Union. Current regulations ensure the validity of electronic signatures and serve as a framework for the requirements surrounding the use of electronic signature solutions.