By Erin Swan
A lot of our clients at eFileCabinet have questions regarding our integration with RightSignature and the legality of eSignatures in general. As the world becomes more and more paperless, it’s not surprising that these kinds of questions are coming up more often. After all, if you’re trying to run a business without paper, digital signatures are an essential part of that, and it’s important that you understand the laws and regulations surrounding this aspect of paperless transactions.
So here are the answers to some of the more common questions we see regarding eSignatures.
Are They Legally Binding?
The short answer to this question is yes, but let’s get into a bit more detail. In June of 2000, the US Congress passed the Electronic Signatures in Global and National Commerce Act—better known as the E-Sign Act. This law identifies eSignatures as legal signatures, with the same authority and security as a physical signature. The E-Sign Act states that no contract or other form of agreement can be declared null simply because it was signed with an electronic signature. Essentially, this act enforces electronic signatures as being legally binding.
Which Documents Can’t Be Signed Electronically?
The vast majority of documents—including sales contracts, business transactions, contract bids, and proposals—are legally binding when signed electronically, but there are some instances in which only a paper copy of the transaction is legally acceptable. Here are a few of the more common types of documents that must be signed with a physical signature:
- Official court documents, including court orders and notices
- Last wills and testaments
- Paperwork regarding adoptions, divorce, and other types of family law
- Notice of cancelation for health insurance and utility
- Testamentary trusts
Of course, there are other instances in which a physical signature is necessary, and this is by no means a comprehensive list. This list simply outlines some of the document types you’re most likely to encounter.
Are There International Laws for eSignatures?
Again, the short answer here is yes, but we’ll give you a bit more detail on this. Obviously, working with businesses in other countries makes paper documents and physical signatures an ineffective and inefficient way of doing business. This is where eSignatures come in. However, if you’re going to be doing business internationally, it’s important that you understand the laws regulating eSignatures in your country as well as in the country your business partner resides in. Here’s a bit of information about the eSignature laws in a few other countries around the world:
- Canada’s version of the E-Sign Act is known as the Personal Information Protection and Electronic Documents Act. This act protects the validity and security of eSignatures for ecommerce transactions.
- The United Kingdom has multiple initiatives regulating the security of eSignatures. The first was established in 2000, and is called the Electronic Communications Act; it established the legality of eSignatures. The Electronic Signatures Regulation of 2002 offered further clarification on what qualifies as an electronic document and outlined more detailed laws regulating eSignatures.
- Australia also has laws regulating the security of eSignatures and electronic transactions. These are outlined in the Electronic Transactions Act of 1999.
There are many other nations that have laws regulating the use of eSignatures, including New Zealand, Japan, China, and India—just to name a few. If you’re doing business with an entity in another country, be sure that you’re familiar with their eSignature laws before you begin signing any electronic documents.
As the prevalence of electronic signatures in business continues to grow, it’s important to understand the laws and regulations surrounding them. If you would like to learn more about eSignatures and how to implement them in your business, be sure to attend eFileCabinet’s Edge User Conference next month in Las Vegas. We will be offering a course targeted specifically towards teaching you more about eSignatures and how you can use them properly in the workplace.
Reserve your spot at the conference here, or contact one of our representatives for help making a reservation.