Are digital signatures legally binding?
Your guide to the legal admissibility of electronic signatures in court
This post will answer your legal questions concerning the use of digital signatures in business transactions.
Since remote working has become more popular, so has e-signing. Yet despite many companies discovering the huge benefits of signing documents electronically, others remain skeptical about using digital signatures instead of ink signatures.
Typical questions concerning the use of digital signatures include, Are digital signatures legally valid? and, Are digital signatures legally enforceable in court? The short answer to these questions is Yes - BUT only if they meet all the requirements that we will detail in this post.
What makes a digital signature legally binding?
For digital signatures to be considered legally binding by a judge, they would need to examine several factors regarding the security and authenticity of the agreement and the signature software used.
To see if your choice of digital signature meets the criteria, read our checklist below:
1. Consent and intent
One of the requirements for a digital signature to be legally binding is the ability to prove that the person who signed a document was fully aware of the implications and intended to sign. To make this possible in a digital agreement platform, the signatory must be disclosed and accept the Terms and Conditions.
Then, to show their intent to sign, they can type their full name, email address, and sometimes electronically capture their signature by freehand drawing it with their mouse or touchpad before clicking on a Sign button.
For further proof of intent, eSign tools like iLovePDF visibly display the option to decline the request for signature.
2. Tamper proofing
If an agreement signed with a Digital Signature is testified in court, a judge could ask for proof that the document wasn’t tampered with after it was signed.
To verify the authenticity of an electronically signed agreement, the digital signature contains a timestamp seal which is certified by a trusted certificate authority. This provides evidence that no further modifications were made to the document since the official signature. If changes are made, the seal is broken.
E-signature solutions like iLovePDF also convert signed documents to the ISO standardized PDF/A format for extra tamper-proofing evidence and long term archiving.
To meet the criteria for a legally binding agreement, you also need to authenticate the signatories. The more proof of identification provided, the greater legal weight it will have in court. That is why digital signature solutions offer several ways for parties to verify their identity.
The most common ID verification methods are Email and SMS code validation. For extra security, some e-signing technologies allow you to create an access code that is only shared with the person who signs the document.
4. Audit logs
Documents signed with legally binding digital signatures should include a fully comprehensive Audit Trail - also referred to as an Attestation. The Audit Trail provides a detailed record of every step made by the parties involved in the signing process - from start to finish.
It also includes details of the parties such as their full name, email address, signature, and IP address. Keeping an official log of these details strengthens the legal validity of the signature.
5. Document access and retention
All parties involved in the transaction should be able to access, retrieve, and save a digital copy of the signed document. A judge or other legal professional may also need to examine the signed agreement.
For this reason, digital signature providers must guarantee the safe custody and accessibility of the documents. A good example of this is iLovePDF Signature. The service sends parties a digital copy to download and safely stores the document with encryption in dedicated European servers.
Finally, deciding whether or not a digital signature is legally binding depends on the country in which you conduct the business transaction.
Different countries have different requirements for the legal acceptance of digital signatures, so it is important to take them into account. To help make digital signatures legal for use in cross-border transactions, countries have created eSignature standards:
- eIDAS: The European Union’s Regulation for Electronic Identification and Trust Services
- UETA: The United States’ Uniform Electronic Transactions Act
- ESIGN Act: The US Electronic Signatures in Global and National Commerce Act
For most international business transactions, digital signatures are expected to be compliant with at least one of these widely recognized standards.
How to choose the correct e-signature service?
Measuring how legally binding a digital signature is depends on many factors. Familiarizing yourself with this checklist will help you find the appropriate eSign tool and avoid any legal disputes in the future.
Now that you know how to check, you might be wondering, Which Digital Signature solution should I choose?
As e-signing is becoming the preferred choice over wet signatures for doing business remotely, there are loads of options on the market. To help you decide which is the right fit for you, read our post, 5 things to consider when choosing an eSignature service.
Or, click on the button below to start signing with iLovePDF’s legally binding digital signatures.
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