Are Electronic Signatures Legally Binding?
Considering today’s fast-paced work life, we are all looking for solutions that can help us do more in less time. On top of that, the Covid-19 pandemic has forced many businesses to make major changes, adopting new technologies and solutions to adapt to a more remote, but no less time-strapped environment. In order to maintain business continuity and streamline processes, many organizations are turning to eSignature platforms.
Even before the pandemic hit, entirely paper-based signing and approval processes could take days to complete. Now, with more people in the approval chain likely to be working remotely, a paper-based process is becoming completely untenable. The global pandemic has shown businesses just how vulnerable traditional processes are - and just how effective digital solutions like eSignature technologies can be.
The traditional contract signing process meant a document would have to be signed, shipped, faxed, or scanned, and then finally filed. For even a simple approval, a document would go through multiple steps and often physically travel great distances. This makes it time-consuming and costly, and creates unnecessary dependencies.
Electronic signatures have many advantages, but the three key benefits of using electronic signatures are: increased speed in processing documents, enhanced security, and significantly lower transaction costs.
Still, while eSignature platforms are becoming more common, many professionals across industries are hesitant to fully embrace digital signing. For one thing, it’s not always clear whether eSignatures are legally binding. Let’s clear that up here.
The Electronic Signatures in Global and National Commerce Act (ESIGN Act), along with its precursor UETA, provides the legal foundation for the use of electronic records and electronic signatures in commerce. It validates that electronic signatures have the same legal effect as wet-ink signatures. When obtained correctly, an electronic signature using compliant technologies, certifications, and authentications will have full validity under the law.
The law states:
- No contract, signature, or record shall be denied legal effect solely because it is in electronic form.
- A contract relating to a transaction cannot be denied legal effect solely because an electronic signature or record was used in its formation.
The law requires the signer's intent to execute or accept the agreement, which can be accomplished by affirmative action, such as typing their name or drawing their signature.
Keep in mind, though, that although electronic signatures are widely accepted for business transactions in the United States and internationally, there are still a few cases under which old fashioned signatures are required, such as on wills, powers of attorney, and birth certificates.
So yes, electronically signed documents are legally valid and binding. You should not only feel free to use them to conduct business, you should encourage using electronic signatures whenever possible to utilize their benefits.
There is then just the question of choosing the best platform. At Exela, we developed DrySign to offer a holistic approach towards procuring signed documents over the internet - an approach that goes beyond a conventional digital signature solution. The platform is easy to operate and will help you keep processes moving forward without any delay. It can also be integrated with a wide variety of enterprise solutions like Salesforce to accelerate sign-offs and improve productivity.
Key highlights of the platform include:
- Flexibility - determine who signs and in what order
- Visibility - you can see who has signed the document and pending signatories
- Security - offers tracking and audit trails to improve compliance
- Efficiency - accelerates the singing cycle and eliminates the inconvenience and space requirements of storing executed documents
- Sustainable - eradicates the need for paper and ink
- Affordable - now available in a freemium version!
Explore the benefits of DrySign today.
