Are electronic signatures legally binding in the eyes of the law?

May 26th · 3 min read

While there are arguments on both sides, the consensus seems to be that electronic signatures are legally binding. Because electronic signatures have the same legal status as traditional signatures, they carry the same weight and are subject to the same rules and regulations.

In the United States, the Uniform Electronic Transactions Act (UETA) and the federal Electronic Signatures in Global and National Commerce Act (ESIGN) establish that electronic signatures have the same legal weight as traditional pen-and-paper signatures. However, not all states have adopted these laws.

For an electronic signature to be legally binding, it must meet the following criteria:

Intent to sign

In order for an electronic signature to be legally binding, there must be an intention to sign. The key is that there must be some clear indication that you intend to sign the document. This can be demonstrated in several ways by clicking on a button that says "I agree" or "I accept" or typing your name into a signature field.

Consent to conduct business electronically.

Both parties must consent to conduct business electronically for electronic signatures to be legally binding. This means that both parties must agree, in advance, to use electronic signatures. Both parties can do this by including a statement in the contract that says something like, "Both parties agree to use electronic signatures for this contract."

Association of signatures with the records

In order for electronic signatures to be legally binding, there must be a clear association between the signature and the records. This means that it must be clear that the signature belongs to the person who signed the contract. Parties can do this by including a statement in the contract that says, "By signing this contract, I agree that my electronic signature is associated with this document and is legally binding."

How to make sure your electronic signature is legally binding

The best way to make sure that your electronic signature is legally binding is to use a compliant service with the Electronic Signatures in Global and National Commerce Act (ESIGN). This act, which Congress passed in 2000, sets forth the legal requirements for electronic signatures.

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Some services offer electronic signature solutions that are compliant with ESIGN. One such service is DocuSign, which provides a free trial so that you can try it out.

Are electronic signatures valid in all states?

No. While the federal government has passed laws that make electronic signatures legally binding, not all states have adopted these laws. This means that electronic signatures may not be given the same legal weight as traditional pen-and-paper signatures in some states.

If you're unsure whether your state has adopted the UETA or ESIGN, you can check the Electronic Signature and Records Association's website.

What happens if I use an electronic signature that isn't legally binding?

If you use an electronic signature that isn't legally binding, the contract may not be enforceable. This means that if there is a dispute, you may not be able to take legal action to resolve the issue.

It's important to note that even if your state has not adopted the UETA or ESIGN, you may still be able to use electronic signatures. However, you'll need to ensure that the electronic signature meets the criteria for a valid signature under state law.

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