What Is an Electronic Signature

What is an Electronic Signature?

An electronic signature, or e-signature, is a digital representation of a person’s handwritten signature used to authenticate documents and agreements electronically. It serves as a legally binding way to indicate consent or approval on electronic documents, replacing traditional "wet ink" signatures. Electronic signatures can take various forms, such as a typed name, an uploaded image of a handwritten signature, or a signature drawn on a touchscreen device.

Legal Aspects of Electronic Signatures in the U.S.

In the U.S., electronic signatures are governed by two primary laws:

Electronic Signatures in Global and National Commerce (ESIGN) Act

Passed in 2000, the ESIGN Act establishes the legal equivalence of electronic and handwritten signatures for most transactions in interstate and foreign commerce.

Key Provisions:

• Electronic signatures cannot be denied legal effect, validity, or enforceability solely because they are in electronic form.
• Consumers must consent to use electronic records and be provided with a disclosure on how to withdraw consent.
• Records must be in a form that can be retained and accurately reproduced for later reference by all parties.

Uniform Electronic Transactions Act (UETA)

Adopted by 49 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands, UETA provides a uniform framework for electronic transactions at the state level.

Key Provisions:

• Electronic records and signatures have the same legal standing as their paper counterparts.
• Contracts cannot be denied enforceability solely because they were executed electronically.
• Parties must agree to conduct transactions electronically.

These laws work together to ensure that electronic signatures are legally binding and widely accepted across the U.S., providing a consistent legal framework for their use.

Benefits of Electronic Signatures

• Speed and Efficiency: electronic signatures significantly reduce the time required to execute documents by allowing instant signing from anywhere.
• Cost Savings: Eliminating the need for paper, printing, and postage reduces costs.
• Security: electronic signatures often include encryption and digital certificates, providing a higher level of security than traditional signatures.
• Convenience: Signers can sign documents on various devices, including desktops, tablets, and smartphones.
• Environmental Impact: Reducing paper usage contributes to environmental sustainability.