Electronic signatures, or eSignatures are signatures which are supplied electronically rather than physically. They can be used for almost every business document, from contracts and onboarding forms to non-disclosure agreements and leases, boasting a number of benefits. But what exactly are the benefits of electronic signatures and are they really legally binding?
Before we delve into the reasons to use electronic signatures, we need to look at whether or not electronic signatures are legally binding.
People often worry about the legality of eSignatures, as they’re a little different to what people are used to. One of the most frequent questions we receive about our Workiro eSignature App is ‘are electronic signatures legally binding?
It’s a genuine cause for concern.
However, one of the main benefits of electronic signatures is that they are legally binding – in fact, they actually tend to be more enforceable than wet signatures because they can be traced right down to the date and time they were signed.
Who knew?
Although laws can vary in different countries, electronic signatures are generally well-received. In fact, in 2000, the ESIGN Act was passed in the United States, making eSignatures legal for pretty much any use.This has been echoed by a number of countries, including the eIDAS in Europe and the Electronic Communications Act 2000 in the UK (which was superseded by the eIDAS in2016).
Another huge update in eSignatures was in the property sector. As of July 2020, HMLand Registry started accepting witnessed electronic signatures. This means that leases, mortgages and other property documents can now be signed electronically, drastically speeding up and taking some of the hassle out of property transactions.
The eIDAS states that an electronic signature ‘shall not be denied legal effect and admissibility in legal proceeding solely on the ground that it is an electronic form’. Essentially, an electronic signature can’t be dismissed purely on the basis that it’s electronic, so unless it doesn’t meet other requirements it’s completely legally binding.
One of the reasons why people question the legality of eSignatures is because of the worry that it’s difficult to prove exactly who signed a document. However, there are a number of ways to verify signer identity online, including:
– One-time passcode sent to the phone number or email address associated with the account.
– Official ID verification using a passport or driving licence
– Logging in to an online account using a username and password
– Witnessed electronic signatures
So whether you’re signing a contract for a new job or buying a house – electronic signatures are completely legally binding and secure.
Security is one of the most important things when it comes to sensitive data and documents, so the last thing you want is for a signed contract or document to go missing.
Thankfully, electronic signatures are much more secure than traditional, ‘wet’ signatures as they contain traceable information about who, when and where the document was signed – which is much easier to enforce than your traditional handwritten signature.
Additionally, with the use of online file storage, the document can be encrypted, meaning there’s no risk of sensitive data falling into the wrong hands or being tampered with – protecting both you and your clients.
As well as being completely legally binding, one of the biggest benefits of electronic signatures is that they’re incredibly convenient.
We live in a digital-first world, dealing with global customers and tackling fast turnaround times, so taking your document signing process online is a lot more convenient for everyone involved.
Not only do electronic signatures speed up the document-signing process, but they also allow you to easily get signatures and approvals on one document without printing, scanning or posting a single bit of paper.
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