The era of the personal computer and smartphone has ushered in the emergence of electric signature laws around the world. As online commerce continues to grow and virtual connections are made, the number of signatures signed electronically will continue to rise as well.
Businesses are integrating their transactions and operations to be almost completely digitized. Offering added advantages such as enhanced security and increased efficiency, digital is the choice of many.
However, while digital processes certainly have many distinctive advantages, they have also led to the need for electronic signature regulations. As you may have experienced firsthand, online transactions can get tricky.
Relevant Laws Regarding Electronic Signatures
When it comes to electronic signatures—also called eSignatures—one of the most important laws that you need to be aware of is the Electronic Signatures in Global and National Commerce Act passed by Congress in June of 2000. This law protects the authority and security of digital signatures. In fact, the E-Sign Act states that contracts with electronic signatures may not be denied legal effect or ruled unenforceable because they were created digitally. Essentially, the E-Sign Act mandates, monitors, and enforces the legality of all electronic signatures.
Answers to Your Electronic Signature Questions
While you may be using electronic signatures on a daily basis, are you aware of all the legalities? Do you have questions when it comes to the regulations and use of these signatures? If so, you’ve come to the right place.
We know that you’re probably not an eSignature expert, and guess what? That is perfectly okay. You don’t need to be an electronic signature guru—you just need to be aware of the legal rights and guidelines digital signatures are subject to.
Are electronic signatures legally binding?
At some point in time, you have probably wondered if electronic signatures are legally binding. According to both the E-Sign Act and the Uniform Electronic Transactions Act (UETA), electronic records and signatures hold the same validity and face the same legalities as traditional paper documents. Under these two acts, no signature can be denied solely on the basis of being digital alone. So yes, all electronic signatures are legally binding.
Are there any document types or industries that do not allow eSignatures?
While proposals, business deals, sales contracts, and just about any other agreement can be signed electronically, there are a few exceptions where a physical paper copy is the only option. While this option is in the minority, there are certain documents that are required to be in paper in order to be recognized as legally binding.
These documents include:
- Court order or notices
- Official court documents
- Notice of cancelation of health insurance
- Adoption, divorce, and family law
- Testamentary trusts
- Notice of cancelation of utility
This by no means covers absolutely every possible document type, but it does include some of the most common document types that you may come across.
Are eSignatures legal for international business?
Anyone who has had the experience of doing business overseas has probably asked this question at some point in time. After all, it’s an issue that comes up frequently in international business. Rarely will you be exchanging documents or information in person when you’re doing business internationally. It isn’t practical for international operations to have to rely on paper documentation alone. Thus, electronic signatures are the staple of the vast majority of international interactions.
While you will find that electronic signature laws vary by country, the vast majority of civilized countries in the world have adopted eSignature laws: Currently, the United States, New Zealand, Japan, Australia, China, and India. Today, it is more difficult to find a country that does not have some kind of electronic signature regulation in place.
What international laws regulate the use of eSignatures?
As mentioned earlier, the United States is certainly not alone in adopting electronic signature laws. In addition to the countless countries that have enacted eSignature legislation, some countries have gone on to develop additional regulations and policies:
- Canada adopted the Personal Information Protection and Electronic Documents Act, designed to further promote the security of all ecommerce transactions.
- Australia has also adopted regulations to protect the securities of electronic transactions with the Electronic Transactions Act of 1999.
- The United Kingdom has developed multiple eSignature security initiatives, the first being the Electronic Communications Act of 2000, establishing the legalities of eSignatures with regard to electronic communications, data storage, and encryption services. In 2002, the United Kingdom followed up this act with the Electronic Signatures Regulation, further defining what constitutes as an electronic document and the legalities behind it.
As you can see, the laws may vary depending on which country you are dealing with.
Why Electronic Signatures Are Increasing
One look at recent data regarding electronic signatures and a very clear picture is painted. Electronic signatures have been on the rise and are expected to continue to be on the rise. With the number of paperless organizations increasing daily, the increase in eSignatures is nearly guaranteed. If they aren’t already, electronic signatures will become the primary form of signature.
Which means that organizations will need to integrate digital-signature-capable software. eFileCabinet has partnered with RightSignature to provide you the easiest, quickest, and most secure way to sign your documents online. Integrative software that incorporates the SecureDrawer program, eFileCabinet can help you get your documents signed in less time while also getting those same documents filed into your folder structure, allowing for truly paperless and highly efficient operations.