To Sign or Not to Sign: Are eSigned Documents Safe and Legally Binding?

Electronic signatures (e-signatures) have been around since 2000, but they are more commonly used now than ever before. The expected growth of the e-signature market is at 39% for the years 2016 to 2020. And it is expected to be valued at $2 billion by 2020.

For an industry to experience such a rapid growth in a short amount of time, you can’t help but to be a bit curious. You may question whether esigned documents are safe, legal, or even easy to use. 

Whether you’re feeling uneasy about a document you were recently sent to e-sign or you would like to start using them in your own business, this article is going to answer all your questions. So, follow along and learn if going paperless is really worth the hype! 

Is an Esigned Document Legally Binding?

Put simply, yes, esigned documents can certainly be legally binding. But there are laws that an electronic signature app must comply with in order for signed contracts and other agreements to truly be valid.

These laws were set in place to prevent fraudulent activity, like stolen signatures. In this day and age, it’s fairly easy for someone to upload a photo taken of your signature and paste it onto a falsified contract.

If someone does this, the contract won’t stand up in court because there won’t be a way to prove where the signature came from like there would be with compliant software. Also, you want to make sure that anything you e-sign is on a compliant program as well.

If you are interested in purchasing your own, you can read more about making purchases on this site.

Now, let’s get into some electronic signature laws you need to know:

You Can’t E-Sign Every Type of Document

E-signatures are acceptable in many cases. For instance, you can use them for sales contracts, non-disclosure documents for employment, and business deals, but they don’t hold up in all industries.

The following types of documents should still be signed the old fashioned way with pen and paper:

  • Court orders
  • Wills
  • Cancellation notices for utilities
  • Papers pertaining to adoption, family law, and divorce
  • Cancellation notices for health insurance
  • Official court documents

Keep in mind that this isn’t a complete list. But it does cover the most commonly used types of documents that must be signed in person.

Can Your Notarize Documents with Electronic Signatures?

Yes! Depending on the software you’re using, there is space where multiple signers and witnesses can add their signature to documents.

You can even contact an eNotary for an extra layer of security.

What Factors Contribute to Making an Electronic Signature Legal?

For an esigned document to be legal, you need to prove two things. The first is intent to sign, the other is consent to do business electronically.

Here is how they work:

Intent to Sign

In order for an electronic signature to be considered valid, your intent to sign has to be made clear. For instance, most e-signing apps require you to either decline or accept signing things electronically before you can view a document.

Consent to do Business Electronically

Everyone involved in a business transaction has to provide consent when it comes to electronically doing business. This is usually accomplished with a prompt or pop-up appearing on your screen asking if you are giving consent to signing the document.

Are Electronic Signatures Legal Outside of the US?

It’s rare that you will ever exchange contracts and other documents in-person when you are someone who does business internationally. So, it’s common to wonder how these laws work.

Luckily, most countries have had the same thought. There are esignature laws set in place to protect all parties involved in a transaction.

How Safe is E-Signing? 

E-signatures aren’t only legally binding, they’re also completely secure. Actually, they’re more secure than traditional signatures.

These are some safety features:  

Digital Signatures and Process Evidence

Most people think electronic signatures and digital signatures are the same. But a digital signature is the encryption technology that’s used to authenticate your e-signature and keep it secure.

These two tools work together to collect evidence relating to your signature behind the scenes. The first thing it does is authenticate your identity in order to know that the correct person is signing.

This is done by asking you for personal information like an email address and. the last four digits of your social security number. Prompting you to create a username and password is also part of the authentication for future transactions.

Next, the software will collect process evidence in order to protect your e-signature. Process evidence records and proves the actions that were completed during each stage of signing.

Data is recorded that indicates what was seen on the screen during each stage from the boxes that were checked and the “Accept” or “Confirm” buttons that were clicked.

Process evidence is embedded into a document. So, it follows it everywhere it goes from the moment it’s esigned and so on.

Added Security

You don’t want anyone making adjustments that hold you responsible for things you didn’t agree to after you had already esigned a document. So, even more digital signature technology has been set in place to keep this from happening.

If a person tries to make changes to a document that’s already signed, the e-signature will automatically become invalid. If a document you signed ever needs to be amended, the person who sent you an original should always send you a completely new document so that you can review the changes and decide whether or not you agree to sign under the new terms.

These processes are much more secure than the documents you sign with traditional pen and paper where there is no tracking.

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With esgined documents, you have multiple layers of digital signature protection helping you. You won’t have to worry about someone copying your signature, or altering contracts without your approval unlike with traditional pen and paper contracts.

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