Overview of electronic signature law and its legality in the United States
Electronic signatures have been legally binding in the U.S. since 2000. Electronic signatures abide by national laws around the world that protect eSignature document users within that jurisdiction.
Like traditional ink signatures, eSigning is only valid if each party to a document intends to sign; this implies a level of comprehension.
Any parties to an electronically signed transaction must consent to do business this way. Consent is based upon the circumstances of business participant interaction.
However, there are exceptional circumstances where consumers are concerned, such that electronic records are used in transactions with consumers only when they have:
- Received a copy of what is known as the UETA Consumer Consent Disclosures
- Actively agreed to use electronic records in any transaction they are involved in
- Not withdrawn their consent to transact electronically
- Association of a signature with the record
The document eSigning system used to record any transaction must maintain an associated record that reflects the process by which a signature was created.
Alternatively, eSignature software should generate a textual or graphic statement, added to the signed record, to explicitly prove that it was executed with an electronic signature.
U.S. electronic signature records must be retainable and be an accurate reproduction, as a reference for anyone entitled to keep that record.
When can you not use an electronic signature?
In the US, the UETA and ESIGN Act covers the legal groundwork regarding electronic documents and the e-signing process. However, there are some notable exceptions.
Neither law accepts the validity of electronic signatures in the following circumstances:
- The creation and execution of wills
- Areas of family law, including adoption and divorce
- Uniform Commercial Code
- Court documents
In these circumstances, documentation must be physically signed.
What states are electronic signatures legal in?
To date, 47 states have adopted the UETA as a legal framework for how electronic signatures are handled. The outlying states are Illinois, New York, and Washington.
You can find their UETA-alternative legal documentation below.
Illinois: Electronic Commerce Security Act
New York: Electronic Signatures and Records Act
Washington: Washington Electronic Authentication Act
Can I use PandaDoc in the United States?
Yes, PandaDoc is legally binding in the U.S. and compliant with all regulations.