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Electronic Signatures | Meaning And Legitimacy

Electronic signature or eSignature is increasingly replacing the traditional – written signatures. ESignatures are getting widely adopting by businesses and companies because it saves time and money in terms of fewer resource requirements. They not only create less waste but also are traceable, time-stamped, and more secure. Most importantly, they possess equal legal recognition as written signatures.

Physical signatures reside in many forms with us, for example, stamps, signs, marks, and seals. However, traditional signatures are becoming outdated because of technological advancement. Digital ways of signing are making processes simpler and easier. Very soon, consumers and vendors will demand this simpler signing procedure, and hence, it is essential for companies to adopt eSignatures as soon as possible.

Legitimacy of eSignatures

Electronic are legally binding but different countries have different laws in their regards. For instance, the United States has ESIGN Act that states electronic signatures are completely legal if all the related parties agree to use them. Moreover, the Uniform Electronic Transactions Act covers state use of e-signatures. Similar legislation exists in the European Union as well.

Despite the existing eSignatures legislation, you should investigate further to stay on a safer side. For example, you can consult legal counsel for specific, country-by-country legislation details.

Diving deeper, in the United States, you can use an eSignature for creating a law. Courts also permit you to present an electronic signature as evidence. Additionally, an electronic document, record, or contract would be fully acceptable.

Long story short, using eSignatures will not harm your business in any way from a legal standpoint. However, for eSignature to be valid, compliance with the following conditions is necessary:

  • The signer should have a definite intent to sign, meaning a clear option for not to sign.

  • The signer should give complete consent to conduct the business electronically.

  • A clear attribute must be given to the signature. For example, set up a two-step identification system for signers. This might be an extra step for the signer, but it helps in giving proper attribution.

  • The document that needs to be signed should be in direct association with the eSignature place.

If you follow the above-mentioned conditions, the eSignature becomes legally binding.

Now the question to think is if eSignature is just as legal, then why it is not being used in every signing situation? To understand the answer, we must explore the legal framework first!

Exploring the legal framework

In some situations, electronic signatures are not perceived as appropriate. For example, important documents for ceremonies such as divorce, adoption, birth, and death certificates. In these kinds of situations, sometimes witnesses or a notary are required, which nullifies the convenience of remote signing. Another example would be – eSignatures cannot be used if the signer isn’t computer literate.

Let us have a look at some of the court cases where the eSignatures have faced challenges.

  • O’Connor v. Uber – The conclusion was even if an electronic signature is on a small iPhone screen, it is still valid.

  • Berkson v. Gogo – It was concluded that web page design, contract terms, and hyperlink placement must not be designed to confuse or mislead signers.

  • Adams v. Quicksilver – Attribution of an eSignature requires an auditable trail of data. Others, at any chance, should not be able to break into that data trail for making changes.

Now let us have a look at some real-world examples that prove almost every industry can avail benefits of digital signing.

Examples of different uses

Every sector needs agreements, contracts, and forms. Digital signature can be adopted by almost every industry, be it government or legal applications.

Here are a few examples where electronic signatures have proven beneficial and successful:

  • Healthcare:
  • For a medical institution, it is crucial to reduce the time taken to get signatures from doctors, patients, and insurers. In a radiology department, eSignature process reduced the time to get signatures for abdominal examinations. The time taken dropped from 11 days to only three days. Introducing eSignatures in workflow reduced the steps in employees’ workflow, increasing productivity. With e-signatures, the vision of long-distance treatment, virtual hospitals, and medical e-commerce will be very easy to achieve.

  • Industrial relations:
  • ESignatures help traditional organizations and unions to become more organized. With the adoption of eSignatures, collecting employee information will be much faster. eSignatures also help in linking better with online social networks, thereby widening the union’s reach. With the usage of eSignatures, union members can participate with a much higher impact.

  • Small to medium enterprises:
  • If you are a small fish in the sea and wish to compete with whales, then it is essential for you to optimize your time, money, and effort. Going digital will help you to cut out extra costs and reallocate that budget to important things. Introducing eSignatures will speed up functions, such as getting signatures from vendors and customers to complete the work in minutes.

  • Government:
  • Petitions have changed forever after using electronic signatures. For instance, the petition to cancel the United Kingdom’s Brexit deadline collected millions of eSignatures in just a few months. It was possible because electronic petitions reach a wider audience and spread faster than physical ones.

  • Disability Services:
  • The flow of online information allows consumers and parties with visual challenges to manage better. Devices, such as desktop computers and phones allow for enlarging the document font size. This helps them signing those documents faster and simplifies the whole process.

  • Finance:
  • The advantages of eSignatures can also be availed of by finance industries and consumers. For example, eSignatures can be used to frequently sanction loans (filling the credit and loan forms via e-signatures).

As per the Federal Reserve survey, 4 in 10 adults would either not be able to cover an expense of $400 or would cover it by selling or borrowing money.

One option for covering huge expenses is a signature loan. It is a well-known method for borrowing money. ESignatures help in improving the process of securing these kinds of loans. In all, eSignatures help in saving time and optimizing processes.


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