UETA and ESIGN have consolidated the legal landscape for the use of electronic records and electronic signatures in commerce by confirming that electronic records and signatures have the same legal weight and effect as traditional paper documents and wet ink signatures.* Both Acts provide that: There are many different ways today to electronically sign a document while having one to establish a binding contract. Some word processors, such as Microsoft Word, have built-in e-signature features that allow you to add a digital signature to documents. This is a popular way to sign and is convenient in the sense that everything is in the same software that most companies already use. Yes, a contract must be signed to become a valid contract. There are occasional cases where oral contracts or unsigned contracts still comply with contract law, but these are risky. By far, the most sensible and advisable way to do business is simply to create a proper contract, hire legal counsel to provide you with legal advice, and make sure each party signs it before they start working or release payment. The short answer is yes, electronic signatures are legal. But that question is whether an electronic signature can create a binding and enforceable contract. And again, the short answer is yes.
Electronic signatures are widely recognized and accepted in the industrialized world, and they are also more secure than traditional paper signatures and therefore less susceptible to forgery. However, there are many drawbacks to using Word to sign documents, mainly because the feature is an afterthought rather than an original feature. It can be quite complicated for users to add electronic signatures using Word, which means it can be time-consuming and requires training for employees to do it right. You should always refer to the laws of your jurisdiction regarding your specific use case for electronic signatures. In this blog post, you`ll learn what makes electronic signatures legally binding, whether they`re valid in the United States, if there are exceptions, what exactly an electronic signature is, and much more. “Signed, sealed and delivered” is an example of a seal recital. Thus, “in witness whereof I hereby deposit my hand and seal”, and the least archaic “this document is signed under seal”. A document signed after signing with a seal but without the word “seal” is not sealed. Similarly, a document that does not have the seal but contains the word “seal” after a signature is not sealed. However, in some jurisdictions, it is possible to create a contract where one party is locked but the other is not. This is achieved by incorporating the consideration of the seal and printing or affixing the word “seal” after the signature of one party, but not after the other. Theoretically, this would mean that the unsealed party could sue for many years longer than the sealed party would be able to file a counterclaim.
For more information about the eligibility of DocuSign electronic signatures and electronic signatures as a whole, see DocuSign`s white paper, “Court Support for Electronic Signatures in the United States.” Learn more about DocuSign eSignature. DocuSign also offers advanced features, including several built-in and advanced authentication tools in DocuSign eSignature, as well as PKI-based signature options to comply with EU laws such as eIDAS and industry-specific regulations such as FDA 21 CFR Part 11 in Life Sciences and U.S. State Professional Engineering Seals for Architecture. Engineering and Construction. There are two ways to sign and ensure that each party complies with its legal obligation: physical handwritten signatures and electronic signatures. The former was the only way to do things until recent decades, and is still very common. It is simple and effective, but is gradually being replaced by the electronic signature in many companies. *In most countries, the law on electronic signatures specifies certain types of documents or categories of documents for which electronic signatures are not suitable. Each client should work with legal counsel to identify exclusion categories in the country in question, but common exclusion categories are wills and trusts, powers of attorney and affidavits. UETA, the forerunner of the ESIGN Act, was introduced in 1999 and adopted by 47 U.S.
states as well as the District of Columbia and the U.S. Virgin Islands. UETA provides, inter alia, that if a law requires a written form or signature, an electronic record or electronic signature may satisfy this requirement if the parties to the transaction have agreed to proceed electronically. The ESIGN Act is a federal law passed in 2000. It grants legal recognition of electronic signatures and records if all parties choose to use and sign electronic documents. In 2000, the U.S. federal government passed the Electronic Signatures in Global and National Commerce Act (ESIGN) which, along with the Uniform Electronic Transactions Act (UETA), affirms that electronic signatures are legally binding documents if all parties choose to use a digital signature. If a law, regulation or other legal norm requires that a signature or registration be notarized, confirmed, verified or sworn in connection with a transaction in interstate or foreign commerce or having implications for interstate or foreign commerce, that requirement is satisfied if the electronic signature of the person authorized to perform those acts: as well as any other information required under other applicable laws, regulations or rules of law, shall be attached to or logically related to the signature or protocol.
Although the concept of the seal served an important legal purpose of authenticating the signatory in feudal times, this is not the case in modern times. In practice, the words “seal” are usually inserted on the page by a lawyer`s administrative assistant, rather than by the person signing the contract. The U.S. Electronic Signatures in Global and Domestic Commerce Act (ESIGN) and the Uniform Electronic Transactions Act (UETA) have four main requirements for an electronic signature to be recognized as valid under U.S. law. These requirements are as follows: Electronic signatures cover all technologies and solutions for creating electronic signatures, from simple images of a signature attached to an electronic document to PKI-based signatures. Various capture methods can be used, such as: Typically, handwritten signatures determine validity and attribution by comparing copies of signatures and presenting statements from handwriting experts or witnesses present at the signing. It is not only expensive and time-consuming, but also less reliable due to the human element. By eliminating human error and automating the entire data collection process, audit trails make it easier to establish authenticity and resolve signature disputes in state and federal courts.
Tyler Newby, partner at Fenwick & West LLP, does an excellent job highlighting the value of audit trails in authenticating electronic signatures in court in his article “Using E-Signatures in Court – The Value of an Audit Trail.” Electronic documents and signatures are widely enforceable for business and personal transactions in developed countries around the world. Many common business documents can be signed electronically, including: Depending on the use case or industry, federal and state regulations may impose additional requirements beyond general U.S. laws regarding electronic signatures and digital transactions. For example, 21 CFR Part 11 (“Part 11”) establishes requirements for electronic records and electronic signatures that must be accepted by the FDA.