Companies that utilize the technology to allow clients, customers, and associates to sign documents electronically no longer have to worry about whether those documents will stand up in court. Thanks in large part to the Electronic Signatures in Global and National Commerce Act, known as the E-Sign Act, documents and contracts that are signed electronically are just as legally binding as those signed with a ballpoint pen.
History of the E-Sign Act
Signed into law on June 30, 2000, the Electronic Signatures in Global and National Commerce Act – better known as the E-SIGN Act – was created to address the realities of doing business in a global environment. The E-SIGN Act eliminated many of the barriers that were holding back e-commerce businesses and ensured that companies would no longer have to forego the legal validity of handwritten signatures for the speed and efficiency of e-signatures. According to some legal experts, contracts signed with e-signature web applications may actually hold up better in court than those signed by hand, since e-signatures can include identity authentication data and are less prone to forgery or fraud.
What Makes an E-Signature Valid?
Not all e-signatures are created equal. The E-Sign Act defined an electronic signature as a “electronic sound, symbol, or process, attached to or logically associated with a contract or other record,” which gave businesses latitude when it came to the ways in which their documents were signed. However, the Act also established certain criteria that all legally binding e-signatures must meet.
Behind every valid e-signature, there must be a document and there must be intent. Without these two elements, an e-signaturewill not hold up in court. Additionally, electronic documents must be tamper-proof, and they must be stored in a secure and accessible location.
Ideally, documents that are signed electronically should include date stamps and identity authentication. Being able to authenticate the identity of a signatory and provide detailed records of the dates and times when particular documents were signed is key in the event that the validity of a document is ever questioned in court.
To ensure the legality of their most important contracts, companies are increasingly turning to electronic signaturesoftware applications. These tools take the hassle out of getting electronic documents signed by providing all the functionality necessary to collect legally binding signatures online. Not only does e-signature software keep audit logs on every document, but it also provides users with convenient views of document statuses, secure document storage, and other features helpful in streamlining contract processes.
Mr. Moore is an expert in online technologies, including web applications, cloud computing, and e-signatures software. His articles on innovative products and new technology including those on digital signature have been published on leading online sites.