Electronic signatures have been extensively embraced by enterprises of all sizes. Learn about the benefits of electronic signatures as well as the rules that govern them.
What you’ll discover:
When are electronic signatures legally enforceable?
What are the rules governing electronic signatures?
Outside of the United States, are electronic signatures legally binding?
Make your agreements legally enforceable.
Until recently, the only method to confirm your agreement with a contract or declaration was to physically drag a pen over paper. While ink signatures are still widely used today, electronic signatures have increased in popularity and are legally accepted in the United States and many other nations.
Electronic signatures, in addition to offering security, simplicity, and ease of documentation, allow anybody with an internet connection to sign papers remotely, which is very beneficial at a time of social distance. The following information will assist you in comprehending the legality and enforceability of electronic signatures.
When are electronic signatures legally enforceable?
Federal law in the United States considers electronic signatures as legitimate as long as they meet specified criteria. They are as follows:
Intent to sign: Electronic signatures, like conventional signatures, are not legally enforceable if neither party intended to embrace the terms linked with the signing. Essentially, one side cannot “trick” the other into signing something they did not want to sign.
Consent to electronic transaction: After obtaining precise information about the procedure, each party must consent to utilize electronic signatures and records (e.g., “By clicking here, you agree to the terms of this document.”)
Affiliation of an electronic signature with a contract or record: Each electronic signature must be directly related to the document being signed.
The signature should be readily identifiable to the individual who created it.
Record retention: All parties to an electronically-signed contract or statement must have access to its records and be able to replicate the document(s) properly for reference.
What are the rules governing electronic signatures?
In the United States, electronic signatures are governed by two laws:
Universal Electronic Transactions Act (UETA): A model legislation that states may adopt if they so want.
The Electronic Signature in Global and National Trade Act (ESIGN) is a federal legislation that establishes a national standard for electronic signatures.
The UETA, which was signed into law by 49 states and the District of Columbia, establishes the validity of electronic signatures as being just as legitimate as ink-and-paper signatures. While New York did not accept the UETA, they do have their own legislation that recognize electronic signatures. UETA exclusively deals with corporate, commercial, and governmental issues. Wills, trusts, family law issues, and many other significant legal processes are not included.
The ESIGN Act, like UETA, confirms the legal legitimacy of electronic signatures. This legislation governs the conditions for an electronic signature to be legally binding. The ESIGN Act also applies only to corporate, commercial, and governmental transactions. As a result, ink signatures may still be necessary for the following:
Concerns about estate and family law.
Court papers such as orders, pleadings, motions, and other court records.
Foreclosure, eviction, or repossession notices.
Notices of cancellation, such as utility or insurance benefits.
Recall notifications for safety reasons.
Outside of the United States, are electronic signatures legally binding?
It is determined by the nation. Some nations have more open-ended and flexible electronic signature rules, whilst others have more stringent standards.
Federal and state legislation in the United States, as well as analogous rules in Canada, the United Kingdom, and Australia, do not necessitate the use of any specific technology. But, the European Union, South Korea, and China have passed legislation that, in addition to specifying the sorts of requirements specified in the ESIGN Act, provide a list of permitted technology and procedures.
This does not exclude you from employing a certain technology or procedure for electronic signatures if, for example, one of the signees is located in Europe or China. Most of these regulations enable private parties to engage into an electronic agreement using their preferred technology and procedure.
Nevertheless, certain nations, such as Brazil, India, and Israel, are more specific regarding the technology and processes utilized for electronic signatures. Electronic signatures that do not conform to the necessary technology or method may not be legally binding in these nations. If you have any queries concerning your individual circumstance, you should consult with a lawyer.
Make your agreements legally enforceable.
Electronic signatures have become popular as a more convenient and efficient method of signing papers.