A quick guide to electronic signature laws around the world

Going digital plays a major part in remaining competitive in today’s world, and there’s no better place to start than with document workflows. According to a recent study by Xero, 13% of SMBs spend more than $1,000 a week on paperwork-related costs, while another 3% spend more than $5,000 per week.

Thanks to electronic signatures, SMBs can now trade time and resource-consuming manual processes for a signing experience that delights customers and drives revenue. However, the regulations with which electronic signatures must comply vary based on geography.

With 72% of SMBs predicted to grow their international base by end of this year, it is critical for them to have a fair understanding of electronic signature regulations around the world. This blog will give you a brief overview of electronic signature laws in some of the largest economies around the world.

The Complete Guide to Electronic Signature Laws around the World

(1) United States

Electronic signature laws that are enforceable here:

ESIGN Act (Electronic Signatures in Global and National Commerce) and UETA (Uniform Electronic Transactions Act)

Quick overview of the law:

The U.S federal government passed the ESIGN Act (Electronic Signatures in Global and National Commerce) in 2000 to ease the adoption of electronic signatures. In addition, UETA has been adopted by 47 states in the U.S, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

While these laws permit the use of electronic signatures for almost all types of agreements, it is critical for businesses to obtain consent from all parties involved prior to conducting business electronically.

Legality of electronic signatures in this jurisdiction:

Both the ESIGN Act and UETA grant electronic signatures the same legal status as traditional wet ink signatures in the U.S. They prevent denial of validity or enforceability of an electronic signature solely because it is in an electronic form.

Key exceptions:

Both the ESIGN Act and UETA exclude property transfers, wills, and other legal notices among documents that are bound by an e-signature.

(2) The European Union

(Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom)

Electronic signature law that is enforceable here:

eIDAS Regulation (Electronic Identification and Authentication and Trust Services)

Quick overview of the law:

When eIDAS took effect on July 1, 2016, it replaced the Electronic Signature Directive while automatically modifying any other EU state laws that were inconsistent with eIDAS. It established a consistent legal framework for the recognition of electronic signatures across the entire European Union. Article 25 of the regulation establishes that all electronic signatures and verification services shall be admissible as evidence in legal proceedings.

Legality of electronic signatures in this jurisdiction:

Electronic signatures are valid as long as businesses obtain prior consent of all parties involved to conduct business electronically.

Key exceptions:

There are no critical exceptions to this law.

(3) India

Electronic signature law that is enforceable here:

The Information Technology Act (IT Act)

Quick overview of the law:

Passed in 2000, The IT Act grants digital signatures the same status as handwritten signatures while recognizing electronic signatures to be legal and enforceable as well. This regulation provides businesses the opportunity to choose among the various forms of signatures and customize their business processes based on the solution that is most appropriate for that particular use case. Under section 10A, electronic signatures are established to be valid unless proof to the contrary is produced.

Legality of electronic signatures in this jurisdiction:

Electronic signatures are valid in India as long as prior consent to conduct business electronically has been obtained.

Key exceptions:

Agreements in relation to powers of attorney, wills, and real estate contracts are exempted from this law.

(4) Canada

Electronic signature law that is enforceable here:

Personal Information Protection and Electronic Documents Act (PIPEDA)

Quick overview of the law:

PIPEDA permits the use of electronic signatures for almost all types of agreements. However, it is critical for businesses to obtain consent from all parties involved prior to conducting business electronically. PIPEDA also regulates how consumer data should be treated with regards to privacy and security.

Legality of electronic signatures in this jurisdiction:

Electronic signatures are granted the same status as traditional wet ink signatures.

Key exceptions:

Real estate agreements, wills, and powers of attorney are exempted from this law. 

Today, over 60 countries around the world have established their own set of laws and standards regarding electronic signatures and digital transactions. As worldwide adoption of electronic signatures continues to rise, the number of countries that employ such regulations will also grow. The above mentioned electronic signature laws are a good reference point for SMBs to determine the scope of the use of electronic signatures in different jurisdictions across the globe.

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