When you are asked to sign a legal document, you probably imagine pulling out an indelible ink pen and scribbling your name in your own unique style. It feels very official. Compare that to typing your name on a computer keyboard, watching your “unique” signature appear in an ordinary font on the screen. You may wonder how that can possibly be just as legitimate.
Signing a contract or document indicates understanding and acceptance of the terms of the document. The potential significance of those obligations has spurred the creation of rules over time that govern what constitutes a legal signature.
The emphasis has never been on the content of the signature but on the intent. A valid signature does not have to be your full name. It needn’t be legible (my own handwritten signature would embarrass a doctor). Think of all those old-timey movies scenes where a character who can’t read or write signs with an “X.” A signature is just a mark that represents the signing party and records his or her intent. There are rules that guard against incompetence, coercion, fraud, and misrepresentation, which might cloud the signer’s intent.
With increased reliance on technology in all aspects of our lives came the need to expand the rules governing signatures to accommodate the digital realm. States enacted statutes that permit electronic signatures. The Uniform Electronic Transaction Act is a law that has been adopted in 47 states. And in 2000, a federal law called the E-Sign Act (more formally known as the “Electronic Signatures in Global and National Commerce Act”) was passed to permit electronic signatures to have the same force of law as their paper-based counterparts.
The legitimacy of electronic signatures is still all about establishing the connection to the signing party and recording their intent. When considering e-signing technology solutions make sure you choose one that establishes and maintains the integrity of the electronic signatures by doing a few basic things:
- Controlling access - A secure system will restrict the ability to sign to the intended individual. Features like automatic log outs, strong passwords, and email verification make it unlikely that anyone can take action on another’s behalf and provide parameters to identify the signature originator. In fact, technology enables a signature to be linked to the signer in new and more compelling ways than were traditionally possible.
- Establishing clear intent - The act of signing should be clear and explicit so the intent to sign is unambiguous. Also, signers must consent to doing business electronically; if an individual prefers to opt-out of electronic execution, they should be permitted to do so.
- Making it tamperproof - Certified PDFs can lock down the contents of a document at the time of signature to ensure the document itself hasn’t been modified since it was executed. This is commonly achieved using an encrypted summary of the document known as the “digital signature” of the electronic document or file. The terms digital signature and electronic signature are sometimes used interchangeably, but they are, in fact, different things.
- Providing copies and retaining details - All parties should be provided with a copy of the document they have signed. Data relevant to the signing, such as the signer’s IP address and timestamp, should be captured and linked to the document. All records must be maintained, accessible, and accurate.
So, the next time you need to sign a legal document, be aware that there’s no need to pull out your quill pen and practice your flourishes. You can just click a button.
Now that you've learned all about electronic signatures, why not read our post on Getting NDAs Signed Fast?
Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.