How to Ensure Your Electronic Signatures Are Legally Binding and Secure

Whether you’re signing contracts, leases, or other essential documents, e-signatures are quick, efficient, and secure.

However, despite their growing popularity, many still wonder whether these digital signatures are legally binding and how they can ensure their documents are secure.

The good news is that with the right tools and knowledge, electronic signatures can be just as valid and enforceable as traditional handwritten ones.

In this article, we’ll explore how you can ensure that your electronic signatures are legally binding and secure, helping you avoid common pitfalls.

If you’re short on time and want a legally binding and secure e-signature immediately, consider platforms like Sign.Plus. They are feature-rich for businesses and sole operators and can be found right here.

Otherwise, if you have a general interest in why e-signature platforms exist, continue reading. In this guide, we’ll explore the legal requirements and security protocols necessary to ensure your electronic signatures are enforceable in court and secure.

Legal Requirements for Electronic Signatures

The first step in ensuring your electronic signatures are legally binding is understanding the legal framework that governs them.

In most countries, electronic signatures are recognized by law and have the same legal standing as traditional handwritten signatures, provided certain conditions are met.

USA Laws

In the United States, two laws—the Electronic Signatures in Global and National Commerce (ESIGN) Act and the Uniform Electronic Transactions Act (UETA)—regulate e-signatures.

ESIGN Act

The ESIGN Act, passed in 2000, ensures that contracts signed electronically cannot be denied legal validity solely because they were created digitally.

UETA Act

UETA, adopted by most states, provides additional guidance on electronic transactions and further supports the validity of e-signatures in various business contexts.

EU Law

Similarly, the eIDAS Regulation in the European Union ensures that electronic signatures are legally recognized across member states.

eIDAS

The regulation classifies e-signatures into simple, advanced, and qualified categories. A simple electronic signature (e.g., clicking a box or typing your name) may suffice for most agreements, but advanced and qualified signatures offer higher security and legal recognition.

Qualified signatures, which are typically based on digital certificates, have the same legal effect as handwritten signatures in most legal contexts.

How Electronic Signatures Can Be Legally Binding

While e-signatures are generally legal, there are a few essential requirements to ensure they are valid and legally binding.

Consent of All Parties

All parties must agree to sign electronically for an electronic signature to be legally binding. This can be implied in an agreement that specifies e-signatures or explicitly stated when the e-signing process begins. Without this mutual consent, the signature may not be enforceable.

Intent to Sign

Like handwritten signatures, the signer must demonstrate their intent to sign the document.

Most e-signature platforms, such as Sign.Plus, use authentication steps, such as email verification, PIN codes, or two-factor authentication, to confirm the signer’s intent. This ensures the person signing the document is who they say they are and legally agrees to the terms.

Record-Keeping and Audit Trails

One of the most crucial factors in the enforceability of electronic signatures is the ability to prove the integrity of the signed document. E-signature services provide audit trails that log every action related to the signing process, including timestamps, IP addresses, and email records. This creates a transparent transaction history, which can be critical if the document is contested later.

Legal Compliance

Depending on the industry, certain documents may require additional legal formalities. For instance, in real estate transactions or wills, the law may mandate the use of specific types of signatures or the involvement of a notary. Knowing any industry-specific requirements that may necessitate additional steps beyond a standard e-signature is essential.

Securing Your Electronic Signatures

While legal validity is critical, the security of your electronic signatures and the documents you sign is just as important. If e-signatures are not properly secured, they can be vulnerable to tampering or fraud. Here are the components that ensure your e-signatures are safe.

Encryption

One fundamental security measure is encryption. Documents should be encrypted during transmission (when sent over the Internet) and stored in the cloud. This ensures that unauthorized individuals cannot access or alter the document.

Authentication

A secure e-signature platform will employ multi-factor authentication to confirm the signer’s identity. This could include email verification, SMS codes, or even biometric verification (like fingerprint or facial recognition). These added layers of authentication make it much harder for someone to falsely sign a document.

Tamper-Seal Technology

After a document is signed, tamper-seal technology can be used to ensure that any alteration to the document after signing is easily detectable. If the document is modified in any way after the signature, the tamper seal will indicate that the document’s integrity has been compromised, rendering the signature invalid.

Timestamping

Every signed document should be time-stamped to prove when the signature took place. This prevents disputes regarding the timing of the signing and ensures that all parties clearly understand the document’s execution date.

Choosing an E-Signature Solution

Finally,  there are e-signature tools, and although they may meet the needs of simple, one-time signing tasks, they will fall short of what you can get from electing a reputable e-signature platform.

E-signature platforms provide high-level security features, such as encryption and authentication, while adhering to legal standards and regulations.

Whatever platform you choose, ensure it complies with relevant laws (such as ESIGN, UETA, or eIDAS) and has a proven track record for security and reliability.

There are alternatives to a platform for example a basic e-signature tool

Conclusion

As businesses and individuals increasingly turn to electronic signatures to simplify and expedite the signing process, it’s essential to understand both the legal and security aspects of digital agreements.

By making certain that all parties consent to electronic signing, confirming the signer’s intent, and using secure, compliant e-signature platforms,  you can confidently use e-signatures for all your business and personal agreements.