The Law Concerning Electronic Signatures

The Law Concerning Electronic Signatures

When you use an electronic signature there are legal ramifications, today with more and more business being conducted online e-signatures are more common.  E-signatures will make up part of your electronic records and the procedures implemented in your office.  They are legally enforceable and carry the same ramifications as a hard copy signature.  The e-signature makes the electronic document legal and binding.

The Laws

There are laws in place that govern the use and application of e-signature systems.  There are two regulations were put in place by the Uniform Electronic Transaction Act or UETA.  The other regulation is the Electronic Signatures in Global and Nation Commerce Act or more commonly called ESIGN.  Most states have started using these laws.  This has changed the way that electronic transactions are conducted while still making convenient and secure.

Signing Contracts

These laws were put in place so signatures would follow a specific legal structure.  Now electronic signatures have the same legal value as traditional hand written documents.  A document that has been signed electronically cannot be legally voided because it is in an electronic form.  A document with an electronic signature, also cannot be denied because of its format.  Contracts drawn either electronic documents or traditional paper are both considered legally binding.

Unlike a physical signature an electronic signature doesn’t require letters or some type of scribbling.  Under the UETA and ESIGN guidelines your documents are considered signed if they have an electronic symbol or sound.  The document is also legal and binding if it went through an electronic process indicating your intent to agree with the contract or document.  Electronic signatures can be a cryptographic symbol or electronic name that was authorized by you.

E-Signature Software

The signature that will be used in the document must be associated or attached to the document that needs to be signed.  It must also be captured with the right electronic signature software that keeps records of the captured signature.  The software needs to make a report of the signature and add it to the record.  The software program acts as the guarantor and needs to maintain timestamps, serial number or some other method to track the signatures they process.  If these conditions aren’t followed it may invalidate your signature.

Many businesses are now using e-signature software and it makes paperwork more efficient, but reliable software is a must.  Here is a video that explains all the legal ramifications of using e-signatures.