Electronic signatures have great appeal to modern businesses, as doing away with paper documents can mean improved efficiency, reduced waste, and better convenience.
Understanding what constitutes an electronic signature legally is critical, however, as it ensures that companies can enforce digital agreements properly.
Are e-signatures legally binding?
Each region has its own e-signature legal requirements, but in most areas, yes, e-signatures are legally valid.
In the United States, for example, the Electronic Signatures in Global and National Commerce Act (ESIGN) makes the legal standing of electronic signatures clear, holding them just as enforceable as a traditional wet (pen and paper) signature.
The Uniform Electronic Transactions Act (UETA) operates similarly on the state level. And in Europe, protections come through the EU Directive 1999/99/EC.
E-signature legal requirements
As defined under ESIGN, you can use a sound, symbol or another process as a legal online signature. The key is that you must make the intent to sign the document clear.
Using wording directly within the document that clarifies both the legal nature of the contract and the desire to complete the transaction electronically, or obtaining supporting written or verbal records such as a voicemail, is extremely helpful for this purpose. You also should be able to retain and share the record.
ESIGN doesn’t require e-signatures to include tamper evidence, but as technology grows more complex, many companies are increasing security by also including a digital signature.
Is a PDF signature legally binding?
Understanding the above, yes, e-signatures such as PDF.co offers typically are legally binding.
Are there exceptions?
There might be exceptions, depending on your region’s laws. In America, for example, many court-associated documents, such as wills or divorce papers, cannot use e-signatures.
Other examples include default notices, utility cancellations, and product recall notices. The bulk of everyday business agreements, however, such as for online purchases or contracting, are enforceable using electronic signatures.