- March 14, 2019
- David Rand, VP of Marketing
Electronic signatures (eSignatures) are legal and binding in most countries. They are widely used in business and personal transactions, and offer a number of advantages over traditional handwritten signatures.
For businesses, eSignatures can improve efficiency and reduce costs by eliminating the need for paper-based documents and wet ink signatures. They can also help to ensure compliance with legal requirements, as digital signatures can be verified and authenticated.
In addition, eSignatures can provide a tamper-proof record of agreements, which can be useful in disputes or litigation. As a result, it is important for businesses to have a clear and up-to-date Electronic Signature policy in place.
This policy should:
• Set out the circumstances in which eSignatures will be used
• Define how they will be authenticated
• Specify the types of documents that can be signed electronically
• Identify any restrictions on their use.
By following the points in this article, businesses can make the most of this convenient and efficient technology.
Are eSignatures in PDF a big deal? No pun intended, but electronic signatures and PDFs go hand in hand. Companies use both to get approvals more quickly and close deals faster. If you’d like to use e-signatures in your business, start by creating an e-signature policy.
Here are some key considerations:
Acknowledge e-signature legality
Determine which types of agreements are OK to e-sign
When creating an electronic signature policy, it’s best to start with agreements that are lower risk. Talk to your lawyers and management to determine what your organization considers lower risk. Popular low-risk documents include non-disclosure agreements and simple sales contracts.
Develop a notary policy
Can notaries sign electronically? The short answer is yes, according to The Uniform Electronic Transactions Act (UETA). So if your organization uses notary services, it’s likely you can adopt them as part of your e-signature process. Check UETA guidelines and contact The American Society of Notaries if you have questions.
Provide a consent to do business electronically
Because most e-signature laws require that you to get the consent of other parties to do business electronically, build an e-signatures consent clause into your workflow.
Here’s a sample:
Please read the following information: By signing this document, you give your consent to electronic disclosures and to the use of electronic signatures. This CONSENT informs you of your rights when receiving legally required disclosures, notices and information from us and when using electronic signatures in connection with your transactions with us. By consenting to the electronic delivery of disclosures, you agree that we may provide electronically any and all communications to you. You are not required to receive notices and disclosures or sign documents electronically. If you prefer not to do so, you may request to receive paper copies and withdraw your consent at any time.
Offer an opt-out clause
Notice that the above sample language includes the opportunity for signers to opt out of using an e-signature. It’s important to provide this, as well as to include the process for signing documents by hand, so anyone who opts out knows how to send manually signed paperwork to you.
Understand the laws
There are typically three kinds of e-signature laws around the world:
- Minimalist laws: Allow e-signatures to be broadly enforced with few legal restrictions
- Two-tier laws: Recognize that certain authentication technologies provide better risk management, so users get stronger legal standing then those who don’t use those technologies
- Prescriptive laws: Restrict the types of signature technologies that are acceptable
Consider choosing governing laws from a country with minimalist laws—such as the United States, the United Kingdom, Canada, Australia, and New Zealand—to reduce restrictions on e-signature usage.
Use advanced authentication for higher risk agreements
To provide extra security for higher-risk agreements, consider using advanced authentication techniques such as:
- Knowledge-based authentication that requires signers to answer questions that prove their identity
- Customized passwords that signers create
- Phone authentication with live representatives
Communicate your electronic signature policy
Once your policy is written and legally approved, communicate it to your employees, contractors, and anyone else who does business with you. Make sure to answer any questions about using e-signatures in daily workflow. After all, an e-signature policy is only as good as its users.
Get Started Today!
There’s no better time than now to get started with electronic signatures. With so much of our lives and work moving online, eSignatures are becoming increasingly essential for everything from signing contracts to accessing records.
Not only are they more convenient than traditional signatures, but they’re also more secure. Electronic signatures are legally binding in many countries, and they can help to ensure that your documents are tamper-proof.
If you’re not already using eSignatures, it’s time to get started.
Thanks to advances in technology, there’s no need to wait – you can start using electronic signatures today.
Learn more about our Esign API.