By: Seo Mavens

More and more companies have already adopted or are looking to adopt e-signature solutions, as pen and paper increasingly quickly become a relic of the past. They are practical and streamline a lot of the daily workflow while also helping to save money. However, nothing in life is perfect or risk-free, and e-signatures are not either, so before you commit to anything, you should take a look at some of the legal factors and risks involved before you commit to a decision. Here is a guide that will explain some of these factors, which you should give the once-over before you commit to anything, so let’s get right into it.

Overview

Electronic signatures, or e-signatures, have become commonplace in everyday life and the business world, from confirming agreements to the terms and conditions on a site to using electronic signature tools to sign a contract. There is much more to say about them that involves much more than the legal aspects, which you can explore further in this guide on electronic signatures, but suffice it to say you will see them all over the place. But are they even legally binding? In other cases, e-signatures have been legal in the USA since 2000, but some people still prefer to use traditional handwritten signatures sometimes, even when an e-signature is legally binding, more convenient, and more secure than a wet signature. The reasons for this are personal most of the time, preferring to just go with the familiar and traditional, and a mistrust of the new and digital, and there is nothing wrong with that, of course.

ESIGN and UETA

In the United States, there are two major laws that govern electronic signatures. First, we have the Electronic Signature in Global and National Commerce (or ESIGN) Act, a federal law that regulates the legal use of e-signatures across the US, designed to create a consistent standard in their regulation, as well as helping to encourage, in certain circumstances, cross-border transactions, which are made easier when the documents, agreements, contracts, and so on can be signed electronically. Then we have the Uniform Electronic Transactions Act (or UETA), which aims to establish the standards for e-signatures to be seen as legally valid once certain conditions have been met. As of now, it has been adopted by 49 states, Puerto Rico, the District of Columbia, and the US Virgin Islands. Now that both of these laws apply to e-signatures for commercial, business, and governmental matters, they do not actually cover all circumstances. This means there are some scenarios where a traditional or “wet” signature is still required for it to be legally binding, like wills or trusts.

When Not To Use

You may be wondering when an e-signature may not be legally binding. They are accepted in other instances, but there are exceptions, and even in states and industries where they are legal, there are still certain kinds of documents where traditional, wet signatures are required for the document to be legally binding. Some examples include trusts and wills, real estate transactions like mortgage documents and deeds, certificates of birth, marriage, or death, certain court documents or orders, family law documents like divorce decrees or adoption papers, and some healthcare documents. This list certainly is not exhaustive and can vary from state to state, so in the end, always verify whether an e-signature is acceptable in your situation, and try to stay up-to-date on any changes to laws regarding electronic signatures in your area.

Advantages

There are many advantages to e-signatures like added convenience, to begin with. E-signature technology makes it easy and convenient to sign documents remotely, at any time and anywhere. You also have easier document management, as once an e-signature has been collected, there is no need to physically mail or scan the documents, and they can be comfortably managed online, which leads to quite some effort and time saved on administrative tasks that otherwise take up quite some time. Less paper can definitely be an advantage, but can also be a bit sad for some people as well, and you should still keep some paper around as networks can be hacked, and it would be a shame to lose everything with no backup, but many companies churn through paper, which can significantly raise printing, paper, and postage costs, and e-signatures obviously can save you quite some money in that department.

E-signatures are another advantage of the modern world that saves quite some money, time, and effort. It can streamline the workflow and give better oversight, but there are some instances where a handwritten traditional signature may be necessary.

Published by: Holy Minoza