Within the U.S., there is the false assumption that physical signatures are more legally binding than digital ones. However, in the US, statutes have been enacted at the federal and state levels that (a) allow e-signatures and electronic records to have the same legal effect as physical (or wet ink) signatures and physical records, and (b) ensure that a contract is not invalid solely because it is in electronic form.
Are electronic signatures legal in the U.S.?
With the passage of the United States (U.S.) Electronic Signatures in Global and National Commerce (ESIGN) Act, electronic signatures became legal in every state and U.S. territory where federal law applies. According to the law, each kind of eSignature is equivalent to a physical one and are fully court-admissible. Any company operating in the U.S. market is free to use both digital and paper documents — the law recognizes them as equally valid.
Both the UETA and the E-Sign Act define an “electronic signature” as “an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record” and an “electronic record” as a record that is “created, generated, sent, communicated, received, or stored by electronic means”. UETA and the E-Sign Act provide that: (a) a record or signature may not be denied legal effect or enforceability solely because it is in electronic form; (b) a contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation; (c) if a law requires a record to be in writing, an electronic record satisfies the law; and (d) if a law requires a signature, an electronic signature satisfies the law.
There are explicit requirements for an electronic signature to be secure. These requirements are as follows. Each e-signature needs to be:
- Intent to sign: Similar to traditional signatures, electronic signatures are only valid if there’s an intent to sign by the signer.
- Consent to do business electronically: In order to qualify as a legally binding electronic document, the parties involved must consent to do business electronically.
- Association of a signature with the record: Your system should be able to reproduce, at any time, the signature as it was signed, along with all data which proves or substantiates the signing — and have it associated with the document signed.
- Retention of records: Records must be retainable. This is a major component — electronic signatures and transactions should be capable of retention and accurate reproduction by all parties. This means that your clients must have access to pull an accurate reproduction of their signed document at any time they want. It also means that the actual document they sign MUST remain untouched and unchanged, even if you have since changed the versions of it.
Can I use eSignatures for business in the U.S.?
Yes, U.S. eSignature laws allow signing documents without ink and pen in many cases.* With the ESIGN act, electronic signatures became legal in every U.S. state and territory where federal law applies. Most states adopted the Uniform Electronic Transactions Act (UETA) for situations where the federal law does not apply.
Are eSignatures court-admissible in the U.S.?
Yes, you can provide a digital document signed electronically as evidence in court as well as a paper one.
Does the U.S. accept eSignature as an open model?
Yes, electronic signature law in the U.S. uses open model. That means that any e-signatures are legally-binding, unless the contrary was proven.*
- Wills and codicils
- Trusts created out of wills and codicils
- Certain powers of Attorney
- Divorce and adoption family law documents
- Some legally required disclosures to consumers
- Official court documents
- Some real estate agreements