Electronic signature, or e-signature, is a technology that allows a person to sign a document electronically as opposed to affixing a written signature. In this day and age when digital documents have become ubiquitous, the importance of e-signatures cannot be emphasized enough.
E-sign allows validation of the user identity and prevents tampering of the document. An esignature validates that the document has not be tampered by anyone. What’s more, a digitally signed document is legally binding and can be presented in court.
Legal Status of E-Signatures in the US
The Uniform Electronic Signature Act (UEFTA) and the Electronic Signatures in Global and National Commerce Act (E-sign Act) makes e-signatures legally binding in the US. The Acts prohibit the states from rejecting the enforceability of digitally signed documents. They have also specified certain conditions for the e-sign to be held legally valid.
An electronically signed document should reflect some proof that the signature has been added. In other words, it should help validate the identity of the person who had signed the document.
Section 106 of the E-sign Act has also defined the terms electronic, electronic document and esignature.
Electronic is defined as a technology that features digital, wireless, magnetic, optical, and electrical capabilities. Electronic document is referred to as a record or contract that is stored or sent by electronic means. Also, esignature is defined as an electronic symbol, sound, or process that is associated or attached to a document and also implemented by a person to sign the document.
In addition, section 101 of the E-sign act gives the right to the individuals of using their paper signature instead of electronic signature for signing the document. Also, the section states that the document to be held legally binding should contain a ‘Consumer Declaration’ that asserts the signatory’s consented for having used the signature.
The consumer is required to provide affirmative consent regarding the use of electronic signature for validation purposes. Simply because a person has not denied the use of electronic signature does not mean that affirmative consent is provided. For a document to be legally valid, the persons signing the document electronically should specifically give their consent regarding its use to validate the document.
Legal Standing of Esignatures in Rest of the World
Apart from the US, an electronically signed document is valid all over the world. The UN had published UNCITRAL Model on Electronic Commerce that established a mechanism for equivalence of handwritten and electronic documents.
Canadian law that applies to electronic signature is the Ontario’s Electronic Commerce Ac. This law recognizes the legality of the electronic signature. The European Union (EU) regulation no 910/2014 sets the legal framework for esignatures. It specifically states that electronic signature will not be denied legal admissibility in the case of a legal proceeding. In addition, the Electronic Communications Act 2000 confirms the legal status of esignatures.
E-signatures are an effective and efficient way to sign documents. Using e-signs is increasingly becoming popular. Advancement in technologies has made it easy to sign the digital documents in order to confirm the identity and validate its legal standing.