What are the laws of Electronic Signatures? Have you ever wondered if Electronic Signatures are as legally binding as handwritten signatures? Signeasy gives the lowdown on Electronic Signatures.
If you hadn’t already got the (digital) memo, Electronic Signatures are the best way to ensure you have a reliable and accurate way of identifying signatories on your paperwork.
Do you run a business across different legislative states or countries and want to incorporate Electronic Signatures into your company?
Yes you do! Electronic Signatures provide a much more cost-effective and efficient work-flow process than the old school pen and paper approach.
It’s helpful to know the law – and the good news is that the requirements are straightforward, which make it easy for every business to understand.
Aside from only a tiny proportion of countries that have not necessarily outlined its position, Electronic Signatures are 100% legal.
There are usually specific legislations that cover the usage and legality of Electronic Signatures that are much like signatures signed by hand in wet ink.
All the below countries have laws that make Electronic Signatures legally binding and accepted for business use.
Businesses in the USA have been able to use Electronic Signatures ever since 1999.
There are two laws in the United States that must be adhered to if an Electronic Signature is to be recognized as legally valid.
Electronic Signatures can be used by almost any industry and are known as court admissible.
Operating as a Common Law system the USA accepts that unless something has been expressly prohibited by law, then it is permitted, and that judicial decisions as binding. Similarly, laws are not always written.
The United States Electronic Signatures in Global and National Commerce Act, known as the ESIGN Act, came into existence in 2000.
The Uniform Electronic Transactions Act, or UETA, was adopted in 1999 and states the following, which many other international laws of Electronic Signatures mimic:
If all parties intended to sign the document, then the signature is valid
The question is raised whether all parties consented to do business on a digital platform.
If you are doing B2B agreements, this is usually established by analysis of the specific interaction.
For consumers, there are special considerations that are required in the form of electronic records documenting the transaction. You need to ensure that your customer:
Does the system you use capture the transaction hold an associated record?
This record should detail the full data trail – including how the signature was created – and generate a statement in either text or image form that is then held within the signed record that proves it an Electronic Signature was executed.
All electronic transactions with a legal Electronic Signature must be retained and accurately reproduced so that all parties can reference and record them.
Many of the US states have simply modeled their Electronic Signature laws on UETA.
In Canada, Electronic Signatures are covered under Canadian federal law PIPEDA.
In the European Union, Electronic Signatures are covered by EU Regulation No 910/2014 on electronic identification and trust services for electronic transactions in the European internal market (eIDAS).
The eIDAS Act requires signatures to be qualified i.e. they can never be challenged in terms of their authorship, as the signature existed alongside a digital certificate that has been authenticated.
Signeasy provides this authentication for you. Once the statement has been signed, it cannot be disputed.
In Russia, Electronic Signatures are covered under the Federal Law of the Russian Federation No. 63-FZ On Electronic Signature.
In India, Electronic Signatures are covered under the Information Technology Act.
In China, Electronic signatures are covered under the PRC Electronic Signature Law.
If your Electronic Signature system adheres to these rules, then your signed paperwork will not be rejected in a court of law just because it hasn’t been written in ink.
Some business industries might have their own rules about Electronic Signatures, so if you have any doubt, speak to an authority in your industry, such as a governing body or professional association.
Courts have set a legal precedent that Electronic Signatures include:
Due to the judicial process of setting precedent, a few specialist laws have not yet been covered by electronic agreements:
Want to go down an Electronic Signature wormhole? Then we recommend you head the United Nations Commission on International Trade Law (UNCITRAL), which provides a library of detailed documentation about the concept and theory of Electronic Signature in law and how it has been adopted internationally!
Want to save time so you can get back to business?
Digitally protected and encrypted: All your documents are encrypted using 256-bit SSL encryption, so that your original and signed documents are securely held. We only use secure servers (Amazon Web Services) for storing your files, and access is only limited to those who have the user credentials or if you have granted permission.
A tamper-proof identification and audit trail: As soon as your documents are signed, you will receive a copy of these signed documents and we will record all the relevant data to ensure you’ve got a clear audit trail.