Overview of electronic signature law and its legality in India
In India, eSignatures are given the same legal status as handwritten signatures. In fact, India has accepted electronic signatures as legally valid since 2000, with the passage of the Information Technology Act.
Since then, the government of India has promoted digital technologies for citizens and businesses operating in India. This has led to a rapid adoption of electronic signatures across India.
Today, electronic signatures can be used in India in business settings and are legally admissible in court.
Here is a brief overview of everything you need to know about eSignature laws in India:
- Can I use electronic signatures to do business in India? Yes, eSignatures are legally valid for most business contracts*.
- Are electronic signatures court-admissible in India? Yes, eSignatures are legally valid to be used in court settings.
- What is the legal model of an electronic signature in India? A tiered model means that all electronic signatures are fully admissible in court, while other eSignatures may require additional proof to be validated.
*Certain exceptions may apply, which will be outlined in the following paragraphs.
Understanding India’s legal model
India operates under a Common Law legal system, which means its legal system closely mirrors the method used in the U.S.
Over the past two decades, India’s legal system has transitioned from being mostly government-controlled to one that is heavily influenced by the market.
Common Law legal systems
A Common Law system is based on legal precedents established by the court system. It draws heavily from the judicial interpretation of existing laws. This differs from Civil Law systems, which are based heavily on a set of codified legal statutes.
Here is an overview of how a Common Law system operates:
- Common Law refers to a body of unwritten laws based on precedents established by court systems.
- It is often used in unique cases where there is no legal precedent to decide the outcome.
- Lower courts may deviate from established precedent if they feel it is outdated or doesn’t apply.
Other Common Law countries include:
The Information Technology (IT) Act
According to Indian law, contracts are considered legally valid if two competent parties come to a verbal or written agreement.
But if they choose to conduct business electronically, the contract is considered legally valid. This is thanks to the Information Technology Act, which was passed in India in 2000.
The IT Act states that contracts cannot be considered invalid solely because they are conducted electronically. The IT Act recognizes two types of legally valid signatures:
- An electronic signature that uses a combination of an Aadhaar identity number and an electronic Know Your Customer (eKYC) method. An Aadhaar identity number is a 12-digit that is given to citizens by the government of India. EKYC services could include things like a PIN.
- A digital signature is generated using an asymmetric crypto-system and hash function. This means that the signer obtains a digital certificate to verify the signature.
According to the IT Act, five factors must be met in order for the eSignature to be considered valid:
- Electronic signatures must be linked to the person signing the document. This could be in the form of a government-issued digital ID.
- The signer must have control over the digital device at the time of signing.
- Alterations to the document or signature must be easily detectable after the document has been signed.
- An audit trail must demonstrate the steps taken during the signing process.
- The signing certificate must be given by a Certifying Authority (CA), as recognized under the IT Act.
Scenarios when eSignatures are prohibited
Electronic signatures are allowed in most business settings but there are a few situations where handwritten signatures may be required. This includes:
- Promissory notes;
- Power of attorney;
- Trust deeds;
- Real estate sales or contracts;
Can PandaDoc software be used in India?
Yes, our electronic signature software complies with the IT Act and digital signing laws in India.
Our digital signature software is ESIGN and UETA-approved and works in 42 countries.
You’ll receive a digital signature certificate after each contract that is signed, and you can retrace your steps by following the audit trail.