Legal Validity of E-Signatures
Electronic signatures eliminate the need to complete legal documents and contracts in person, improve efficiency and reduce paper waste. But people still wonder if electronic signatures are legally binding. After all, the enforceability of a contract depends not only on its validity and admissibility, but also on the content of the contract itself. In a dispute, a judge may consider whether: the terms of a particular agreement were clear and consistent, whether there was consideration (an exchange of value between the parties), whether the parties had the legal capacity (capacity) to sign, whether a party was under duress or undue influence, and whether a party signed accidentally or without knowing the meaning of the agreement. Most companies have a lawyer who drafts or reviews their contracts taking these criteria into account before they are executed in order to maximize applicability in the future if the content of the document is reviewed by a court. Here are some important legal considerations for deciding when an electronic signature can be considered binding and enforceable. Wondering if electronic signatures are legally binding? A federal law, the Electronic Signatures in Global and National Commerce Act (ESIGN), and the laws of almost all states (through the adoption of the Uniform Electronic Transactions Act or similar laws) provide that electronic signatures are legally enforceable as long as certain basic requirements are met. These laws require that contracts signed electronically be executed and treated in the same manner as any document signed by conventional means. In other words, no contract can be rendered invalid or unenforceable simply because it was signed electronically. The Regulation on Electronic Identification and Trust Services (eIDAS) makes any type of electronic signature legal and enforceable.
But only a certain type, the so-called digital signature, receives the same status as a handwritten signature. For an electronic signature to be admissible in court, certain criteria must be met. Anyone wishing to present an electronically signed contract before a judge must be able to prove the intention of the signatory and the security of the signed document. If the document may have been falsified or altered in any way after it was signed, there is a high probability that a judge will refuse admission to court. In particular, an electronically signed document may be legally valid, but may be declared inadmissible in court due to security vulnerabilities, audit logs, or authentication vulnerabilities. For this reason, it is important that companies choose an electronic signature solution that is highly valued and meets the highest standards of technical integrity. For an electronic signature to be considered legal or stand up in court, the signature must have the following: Yes, electronic signatures are valid in all U.S. states and have the same legal status as handwritten signatures under state laws. In other developed countries, electronic signatures have the same legal weight and effectiveness as handwritten signatures and paper documents. Laws may vary, but you can learn more about your country`s legal requirements by reading DocuSign`s Electronic Signature Legality Guide. If you want to go further, set up a process to automatically maintain a full audit trail so you can securely access files in case the validity of your electronic signatures is questioned.
Concerns about electronic signatures have also raised concerns for professionals, as signing is easier than anyone else in the digital world with the right tools. Therefore, companies should take precautions to avoid fraud. Here are some of the measures taken: While the COVID-19 pandemic has forced many countries into complete lockdowns, business adoption of e-signature software has increased. Organizations and government departments have had to limit face-to-face interactions, forcing companies dealing with contracts and paper documents to resort to digital alternatives such as electronic signatures. None of this would be possible if electronic signatures were not legally binding. The E-Sign Act, signed into law by President Bill Clinton on June 30, 2000, granted electronic signatures the same legal status as handwritten signatures in the United States. The E-Sign Act allows the contract to be used as evidence in court and prevents denial of the legal effect, validity or enforceability of an electronically signed document simply because it is in electronic form. As a rule, in handwritten signatures, validity and attribution are established by comparing copies of signatures and presenting statements by handwriting experts or witnesses present at the time of signing.