Electronic authorizations, commonly known as e-signatures, are on the rise in modern society as we have moved towards paperless transactions. Contracts, agreements and other types of documents are easily signed by individuals and organizations online, eliminating the need for bulky mail deliveries and paperwork.
However, a significant number of people have concerns or confusion about the legality of electronic signatures, as well as their proper usage in various different jurisdictions. Here’s what you need to know:
What is an Electronic Signature?
An e-signature by legal definition is the signing of a contract or agreement by digital means, rather physically placing a pen on the paper document. Typing the name of the person signing an agreement, clicking on an ‘I accept’ box, signing using a pen or stylus, or using software that takes the place of a pen are common different types of electronic authorizations.
Global Legal Framework for E-Signatures
There are various laws that have been put into place in different countries and regions to regulate the formation and implementation of e-signatures:
United States
The Electronic Signatures in Global and National Commerce Act (ESIGN Act) and Uniform Electronic Transactions Act (UETA) state that e-signatures hold the same legal verification as a manual signature.
European Union
According to the eIDAS Regulation (No 910/2014), there exists three kinds of e-signatures governing electronic identification and trust service. These are simple, advanced, and qualified (which has the highest security and legal validity).
Other Countries
Electronic signature laws have been implemented in countries like Canada, Australia, and India where the e-signature is only permitted in certain situation, depending on their specific laws regarding consent and authentication.
Key Requirements for Legal Validity
E-signatures are binding in nature and therefore must possess the following attributes:
Intent:
The signatory clearly shows that it is his desire to sign the document electronically.
Consent:
All parties concerned must consent to the application of e-signatures.
Authentication and Security:
Public key infrastructure PKI and other digital certificate technology are the most common methods of verification.
Recordkeeping:
Signed electronic records must be properly kept and produced when required. This is needed for resolving cases where there are disputes.
Use Cases and Exceptions
Electronic signatures are easily accepted across numerous industries including property, finance, health, and legal. However, there are some proceedings that require a physical signature or additional verification, such as making a will, granting a power of attorney, filing a court order or certain aspects of real estate buying or selling. While there are some jurisdictions that allow exceptions, this is not universal.
Making Sure You Comply with E-Signature Regulations
The e-signature is legal in many jurisdictions as long as it meets certain requirements such as purpose, permission and protection. With increasing online transactions, e-signatures will significantly enhance the signing of contracts and agreements in any part of the world. Nevertheless, it is important to know the applicable laws and the appropriate measures to take in order to achieve compliance and reduce legal risks.
