What is an Electronic Signature?

An electronic signature, commonly referred to as an e-signature, is any electronic process that indicates approval or acceptance of a document or transaction. E-signatures provide a digital replacement for handwritten signatures, allowing agreements and contracts to be signed electronically rather than the traditional paper-based method. With global digital transformation accelerating across all industries, e-signatures have become a vital technology for enabling key business processes remotely while maintaining security and legal validity.

Purpose and Validity of E-Signatures

The core purpose of e-signatures is to provide the same legal standing for digital signatures as traditional paper documents with handwritten signatures. They indicate the consent and agreement of parties to legally binding contracts and documents. The main pieces of legislation which have enabled the validity of e-signatures in the United States are the Electronic Signatures in Global and National Commerce Act (ESIGN) at the federal level and the Uniform Electronic Transactions Act (UETA) at the state level. These laws establish that:

  • E-signatures cannot be denied legal effect solely due to their digital format.
  • In most cases, electronic contracts and records should not be invalidated or considered unenforceable if they contain an e-signature.
  • E-signatures generally carry the same weight and legal effect as traditional wet ink signatures.

This legal framework provides the basis for the validity of e-signatures, allowing almost any process that indicates agreement to replace a handwritten signature. When implemented appropriately, they enable fully digital and paperless transactions across a huge range of business and governmental processes.

Types of E-Signature Solutions

There are various e-signature technologies which can legally bind signatories to documents and agreements:

  1. Simple Electronic Signature (SES)

    • Includes any electronic symbol, process, or sound attached to or associated with a document

    • Examples: typed name, scanned handwritten signature, or a digital representation of a signature

  2. Basic Electronic Signature (BES)- The simplest form of electronic signature

    • Serves as a method of authentication by attaching or logically associating electronic data to other electronic data

    • Identifies and authenticates the signer of an electronic document

    • Ensures the integrity of the signed document, confirming that it has not been altered since the signature was applied

    • Provides non-repudiation, proving that the signer intended to sign the document and cannot deny having signed it

Examples of BES include:

  • Typing a name or initials in an electronic document

  • Clicking an “I accept” or “I agree” button on a website

  • Scanning a handwritten signature and inserting it into a document

  • Widely used for simple agreements, contracts, and forms that do not require a high level of security or compliance with specific legal regulations

  1. Advanced Electronic Signature (AES) – Defined under the European standard eIDAS

    • Created using a qualified certificate for electronic signatures

    • Capable of identifying the signatory and detecting any subsequent changes to the signed data

  2. Qualified Electronic Signature (QES) – Defined under the European standard eIDAS

    • An advanced electronic signature created by a qualified electronic signature creation device

    • Based on a qualified certificate for electronic signatures

  3. Digital Signature

    • A type of electronic signature that uses public-key cryptography

    • Signatory uses a private key to create the signature, and recipients use the corresponding public key to verify it

    • Ensures integrity, authentication, and non-repudiation of the signed document

  4. Biometric Signature

    • Uses biometric data, such as fingerprints, facial recognition, or iris scans, to create a unique signature

    • Requires specialized hardware to capture and process biometric data

    • Offers a high level of security and assurance

  5. Clickwrap Signature

  • Signatory agrees to terms and conditions by clicking an “I Agree” or similar button

  • Commonly used in online transactions and software installations

  • Provides a record of the signatory’s acceptance of the agreement

Comparing E-Signatures and Digital Signatures

While electronic signatures and digital signatures are closely related technologies, they have some distinct differences:

  • E-signatures refer to any electronic approval process, whereas digital signatures use encryption and biometrics for enhanced security.

  • Standard e-signatures apply to basic agreements and contracts. Digital signatures apply for documents and transactions requiring the highest level of authentication, non-repudiation and integrity.

  • E-signatures provide a legal equivalent for handwritten signatures. Digital signatures also comply with the most stringent global standards for digital security.

In essence, all digital signatures qualify as e-signatures, but only some e-signatures have the sophistication to be termed digital signatures. For routine documents and basic agreements, appropriately implemented e-signatures are legally valid and enforceable while bringing immense convenience and efficiency benefits. To learn more about the distinctions, read our Digital Signature vs Electronic Signatures article.

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