Just as electronic versions of phone books, newspapers, and dictionaries are on the rise, so are electronic versions of contracts. People like the convenience of having everything at their fingertips. They are getting accustomed to doing business online—and signatures are a fundamental part of doing business. Electronic signatures offer a means by which business can be conducted through the internet.

  1. Electronic signatures are legal per the federal Electronic Signatures in Global and National Commerce Act (ESIGN) of 2000 and per the state recommended Uniform Electronic Transactions Act. The ESIGN act states “a signature, contract, or other record relating to such transaction may not be denied legal effect, validity, or enforceability solely because it is in electronic form.”
  2. Both the UETA and the ESIGN act define an electronic signature as “an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.” This definition can be broadly interpreted. All of the following are means for giving an electronic signature: clicking a mouse to show intent to sign, writing with a stylus on a smartphone or tablet, or even typing one’s name in an email message.
  3. E-signatures can be given through commonly owned devices, such as smartphones, laptops and computers.
  4. They don’t require paper. Documents stay in electronic form from beginning to end.
  5. They are fast. It takes 45 seconds to sign (electronically) and return a signed document with a smartphone app. It takes several minutes to open an email attachment, print it, sign it, and fax it back (and that is assuming that the signer is near a printer and a fax machine).
  6. Electronic signatures are being used during internet transactions each time someone clicks “I agree.”
  7. Some documents can’t be signed electronically, such as living wills and divorce papers. Most documents can be signed electronically, including engagement letters.
  8. A traditional wet ink signature is a legal form of signature, but it can be repudiated if it is a forgery. The same is true for electronic signatures. They are subject to the same legal scrutiny as wet ink signatures.
  9. Electronic signature service providers take measures to insure the integrity of the signature. Some record a signer’s computer (IP) address, a signer’s GPS location, or an image of the signer. Others require a user name and password or email verification prior to usage. There are no specific legal requirements for authenticating a signer.
  10. Ultimately the validity of a signature, electronic or otherwise, rests on the evidence surrounding the creation of the signature and on the preservation of the document on which it was recorded.

While electronic signatures are not used in a majority of contracts, their usage will inevitably rise as we enter an increasingly digital world. In comparison to low fidelity signatures, such as are created with fax machines, electronic signatures offer an attractive alternative.

(photo: http://www.flickr.com/photos/alanenglish/4817315406/)

Kelly Spradley is a Cofounder of Vignature.