Electronic signatures are a great way to carry out online transactions since they provide convenience and safety. In 2012, companies that used electronic signatures for online transactions actually got $89 million throughout the world. With an increase in the use of such signatures, the profit amount has increased to $754 million in online transactions.
However, there are a few steps that you need to carry out in order to ensure that the document with the e-sign is binding and legal. There are a few guidelines given by the Uniform Electronic Transactions Act (UETA) and the Electronic Signatures in Global and National Commerce Act (ESIGN Act). Any document with an electronic signature needs to meet the requirements outlined below.
All the parties involved in the document process need to provide proper authentication. This is mainly for identification purposes. If there is anyone signing on behalf of the interested party then it is necessary to provide proper documentation. They need to prove that they are authorized to conduct this business transaction by the interested parties.
Any and all authentication needs to be provided before the transaction is finalized. This allows the parties involved to have time to check and review the details of the identification documents. This is under the responsibility of the business to ensure that the involved person who is using an electronic signature is authentic.
It is also important for all the parties involved to give their consent to the e-sign. They all need to properly understand that the electronic signature is as binding as any other paper document. This is an extremely important step that all the people involved know that they are signing a legal document. Not following this contract can have legal repercussions on you and your company.
It is clearly stated in the E-Sign Act, “a signature, contract, or other record relating to such transaction may not be denied legal effect, validity, or enforceability solely because it is in electronic form; and (2) a contract relating to such transaction may not be denied legal effect, validity, or enforceability solely because an electronic signature or electronic record was used in its formation.”
Every detail within the agreements has to be shared by all the parties involved. This step must take place before the electronic signature is used. They need to know the full terms and conditions of the transaction. This includes the costs that would come from going through with the deal, as well as any penalties from not meeting the requirements of the contract.
Just because it is an online transaction with electronic signatures, it does not mean that you don’t need the contract fully. Even though the document might be detailed and lengthy, you still need to read the whole thing thoroughly. This is because this is a legally binding document that can have huge consequences if you don’t follow it.