To those wondering, “Is electronic signature legal?” the answer is yes—electronic signatures are legal and weigh the same as paper signatures.
If you wish to know more about the legality of e-signatures and how to use them—we are here to help! In this article, we discuss key aspects like the e-signature concept, types, usage, regulation, and their benefits.
What Are Electronic Signatures?
Electronic signatures are symbols, letters, or other data in electronic format attached to an online document as proof of one’s intention to sign a document. Its importance is equal to an offline signature.
E-signatures are used to sign documents remotely via a mobile or computer device. Businesses often use them to create court-admissible signatures, which secure electronic transactions and enhance customer experience.
There are three major types of electronic signatures:
- Simple Electronic Signature (SES): It is the most widespread type of e-signature, which implies electronic information (letters or other symbols) attached to a transmittable digital document. This signature variant does not require verification; the documents that contain it have no high integrity levels.
- Advanced Electronic Signature (AES): This type of electronic signature is made the same way as SES. The key difference is that AES’ security levels are higher. For example, you can create an AES and use a delivery service with audit trails that confirm data transmission.
- Qualified Electronic Signature (QES): Lastly, these encrypted e-signatures have the highest security level, as they use the public key technology. This means that only the sender and the receiver can see the signed document. On top of that, QES also requires a face-to-face video call or live verification.
Electronic signature technologies, such as digital signatures, make e-signatures impregnable. While the digital signature vs. electronic signature comparison may cause confusion, the key difference is that the former protects an e-signature, whereas the latter is data in digital form attached to other data in the same form.
Are Electronic Signatures Legal?
Electronic signatures are legal and carry the same weight as traditional signatures.
Generally, when examining if an electronic signature is legal, one needs to analyze several factors, including intent to sign, consent, verification, and record-keeping.
Let’s review each criterion in detail.
#1. Intent to Sign
The intent is the free will of a person to make a document official by putting their signature on it. This also implies that the signer understands their actions and agrees with the terms under which the document was made.
In contrast to offline signatures, where the signer’s intent is visible, e-signatures must have clear electronic evidence of the intent. Some ways to prove it include using screenshots or making changes to the document before signing.
#2. Consent
The signer of every digital document must consent to signing before it can be valid. This applies to every electronic document. If an individual has given consent to sign a document in the past and never retracted it, the consent can still be active later on.
For instance, individuals signing documents in the US must get a Uniform Electronic Transaction Act (UETA) electronic signature disclosure, which they can use to give consent. Needless to say, a consent withdrawal will render an e-signature invalid.
#3. Verification
Another factor essential for legally binding signatures is electronic signature authentication. The verification method can differ depending on the signature type; the simplest procedure is for the signer to verify their identity via email.
For more robust authentication, the signer may need to use a PIN code received by SMS or upload an official ID. Verification via video call or in person is also standard.
#4. Integrity & Record-Keeping
Successful record-keeping is the last element to solve the dilemma when wondering whether an electronic signature is legal. Primarily, the signed document must have proof of integrity; in other words, there must be evidence that no document changes have occurred.
This is why electronic signatures have text or graphic components confirming that the signing process is digital. An alternative way to prove integrity is for document creators to explain how they made and attached the signature.
Finally, document creators should produce copies for every contracting party. Document retention refers to storing documents where all authorized individuals can access them. Only after all these safety measures have been applied is an electronic signature legal.
When Is an Electronic Signature Legal?
As previously mentioned, an electronic signature is legal whenever it meets the criteria mentioned in the previous section. However, this type is mostly used in specific industries, such as sales, contracts, healthcare, government forms, and similar.
Let’s have a thorough look at them:
Sales
Firstly, the most common example of e-signatures is in sales contracts. If buyers and sellers cannot sign a contract in person, they can do so legally using electronic signatures. This process includes verification of both buyer and seller. The same goes for other aspects like intent, consent, etc.
E-signatures in sales agreements can speed up and improve the efficiency of this process. This is useful for buyers and sellers hurrying to obtain funds or legally take possession of property or assets.
Healthcare
Dealing with sensitive and confidential patient and research information is a typical occurrence in the healthcare industry. Researchers, doctors, patients, and others may share such data for various purposes; in such cases, electronic signatures keep all the details secure.
For instance, e-signatures in hospital settings are essential for sharing medical records, such as a patient’s medical history. The same applies to medical billings, procedure approvals, and prescriptions.
Government & Transport Forms
The government uses high-protection electronic signatures for documents regardless of their level (federal, state, or local). They ensure security by issuing approving permits and using tools like time trackers.
The transport industry also uses e-signatures for shipping documents, as physical documents may be lost or difficult to keep neat during transportation. On the other hand, signed and protected electronic documents are practical for both shippers and recipients.
Do Electronic Signatures Hold Up in Court?
Electronic signatures hold up in court, as they are equally legally binding as physical ones and regulated by online document signing laws.
The main regulatory act for making e-signatures admissible in court is the Electronic Signatures in Global and National Commerce Act, or the ESIGN Act. It affirms that electronic signatures are as impactful in court as physical paper signatures. Another official act issued in 1999, the above-mentioned UETA, evens the effect of e-signatures with traditional signatures.
If an e-signature meets the set criteria (intention, consent, verification, and integrity), court representatives can prove its validity more easily than they would do for traditional signatures. Instead of hiring handwriting experts and presenting copies of previous signatures, executives can use audit trails.
Audit trails provide data collected during the signing process and serve as substantial proof of e-signature authenticity. Automating this process removes the possibility of human error and provides firm evidence regarding document receipt, opening, viewing, time, location, and IP address.
Electronic Signature Regulation
We know it’s legal in many areas, but is electronic signature legal worldwide? The answer is yes—it is legal almost anywhere globally. Still, the regulation of e-signature varies from one region to another, but the US, UK, Europe, and Australia have the most impactful regulations.
Let’s have a look at the acts and directives for each region.
United States
The ESIGN Act and UETA directly regulate electronic signatures in the US, and passing these two acts gives e-signatures the same power as paper ones have.
Still, there are certain cases in which only a wet (or traditional) signature is valid. These include:
- Birth, marriage, and death certificates
- “Do not resuscitate” and health proxies in healthcare documents
- Adoption documents and divorce papers
- Deeds, mortgages, wills, and trusts
These examples may vary from state to state, so it's important to check which documents the e-signature is valid for in each area.
United Kingdom
The Electronic Communications Act passed in 2000 changed the status of e-signatures from non-valid to valid in the UK. In 2002, the Electronic Signatures Regulations Act completely systematized e-signatures within the UK law jurisdiction.
Even though they are fully regulated, electronic signatures in this area do not carry the same weight as wet signatures on every occasion. To have the same impact as traditional ones, e-signatures must either be advanced or qualified (having the highest protection levels).
European Union
The e-signature Directive (1999/93/EC) was the first electronic signature regulatory act in the EU. Shortly after, Regulation (EU) No 910/2014, or the eIDAS regulation, codified simple, advanced, and qualified e-signatures.
First, simple electronic signatures encompass every electronic signature that transmits digital data for authentication purposes. Such an e-signature is valid in C2C, B2B, and B2C circumstances.
Advanced and qualified signatures are valid for consumer credits and loans, court briefs, and commercial lease agreements. While these are the general rules, each EU state has its e-signature directives.
Australia & Rest of the World
The Electronic Transactions Act of 1999 (ETA) and Electronic Transactions Regulations of 2000 rank electronic signatures alongside wet signatures in Australia. The ETA proposes a specific set of rules (e.g., intention, consent, etc.) for legally binding e-signatures globally. On the local level, most administrative units have their own ETAs.
Finally, e-signatures are almost universal. For instance, most South American, Middle Eastern, and Asian countries use electronic signatures in addition to traditional ones.
3 Benefits of Using Electronic Signatures
Not only is an electronic signature legal, but it also brings benefits such as speed and efficiency, environmental friendliness, and security.
Let’s get to know more about them.
#1. Speed and Efficiency
Signing a document electronically may only take several minutes. The entire signing process, except for the signing act, is automated, which speeds up the procedure. The faster this process goes, the more your workflow can become more efficient.
E-signatures also provide proficient document organization—everything is in one place. Therefore, all parties can sign, use, and manage the documents, even on a multidepartmental level.
#2. Environmental Friendliness & Cost Reduction
Using electronic signatures can reduce paper consumption, which directly and positively impacts the environment. It also reduces the costs of buying paper and printing documents. Unlike traditional paperwork, which implies transportation, e-signatures are both eco-friendly and can cut expenses.
#3. Safety
Electronic signatures boast high safety levels, sometimes even higher than traditional signature levels.
Advanced electronic signatures involve multiple measures like IP address verification and audit trails, which confirm time, location, document reception, opening, and viewing.
Qualified electronic signatures include public keys and digital signatures that only the sender and the receiver have and can use to unlock and view the signed document.
How PDF Tools Can Help With E-Signatures
PDF tools can help with e-signatures by allowing you to load your document quickly, use a specialized feature to add your signature to it, adjust signature font style, color, size, and opacity, and upload your signature image to a document from your device.
A valid signature is essential for purchasing, selling, or performing similar actions. However, finding reliable software that will help you sign your documents electronically can sometimes be challenging. But worry not; our PDF.net tools can help you streamline this process seamlessly.
The PDF signature tool makes it easy to create electronic signatures, and the software also offers valuable options for transferring digital information to other data in electronic format. Therefore, you can sign files and tweak your document using the PDF editor tool on desktop and mobile devices.
Most importantly, the whole set of tools is entirely safe—online protection and privacy are guaranteed.
Is Electronic Signature Legal FAQ
#1. How can I prove the validity of an electronic signature?
You can prove the validity of an electronic signature by checking the signer’s intent and consent, verifying their identity, and using audit trails and public keys, which reliable software can provide.
#2. What should I look for in a legal e-signature tool?
In a legal e-signature tool, you should look for authentic and original signatures, tamper-proof ability, compliance and security of the platform, a transparent audit trail, mobile friendliness, etc.
#3. How do I make my electronic signature legal?
You can make your electronic signature legal by expressing your intent and consent, verifying your identity, securing the document, making copies, and keeping documents ready for check-ups.
#4. Can electronic signatures be tampered with?
Electronic signatures can be tampered with. However, this is mostly the case with e-signatures made with poor-quality tools from untrusted sources. To avoid such scenarios, you can use PDF.net for signing your documents, as it boasts high-security levels and keeps your documents private.