The use of electronic signatures has transformed the way businesses transact online. It’s fast and efficient to sign documents anywhere. It’s secure and legally binding, which improves the workflow.
However, it’s not enough that individuals and organizations know how to facilitate the use of eSignatures. It is equally important to learn about the electronic signature law that enables eSignatures to be binding.
In this article, we will tackle the laws for electronic signatures and their validity and enforceability.
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Overview of Electronic Signature Laws
The use of electronic signatures has been widely popular in the United States in the 1990s. But it was not until the turn of the millennium that a law existed to make it legally binding. Under President Bill Clinton’s administration in 2000, the Electronic Signatures in Global and National Commerce Act officially came into effect.
Since then, the eSignature law has solidified the legal use of electronic signatures. For future digital transactions, it is not unlikely that its handwritten counterpart will become obsolete or at least less popular.
What Is the Electronic Signatures in Global and National Commerce (ESIGN) Act?
The ESIGN Act is a federal law that establishes the legal validity of electronic signatures and records. Enacted in 2000, it aims to facilitate the use of electronic signatures in interstate and foreign commerce.
The ESIGN Act sets forth the requirements for electronic signatures and records. This includes that they must be created, transmitted, and stored in a manner that is secure and reliable. The Act also establishes that electronic signatures and records have the same legal force and effect as paper documents.
What Is the Uniform Electronic Transactions (UETA) Act?
The Uniform Electronic Transactions Act (UETA) is a federal law that provides a legal framework for eSignature use. The law supports that eSignatures are legally valid if the parties have consented to do a certain transaction electronically.
UETA was enacted in 1999 to promote the use of electronic commerce and to standardize the laws governing electronic transactions. To date, only the State of New York has chosen not to adopt the UETA Act. However, it has legislated its own version of the law, making eSignatures legally valid and enforceable.
Comparison of Electronic Signature Laws by Country
There are a variety of electronic signature laws in place around the world. Each country has its own unique set of rules and regulations governing eSignatures. Below, we zero in on the laws for eSignatures in a few countries besides the United States.
Australia
In Australia, the Electronic Transactions Act of 1999 became the pioneering law for the legally binding use of electronic signatures. With this law, eSignatures were granted the same legal weight as its handwritten equivalents.
The digital signature law in Australia is much like the eSign Act of the US. This means that the use of an electronic signature is accepted in almost every type of transaction in Australia. In 2011, the Electronic Transactions Act was amended to provide better legal protection for consumers who use digital signatures.
Be that as it may, Australian law does not cover eSignature use in matters involving migration and citizenship. While it differs per jurisdiction, certain state laws discourage the use of eSignatures, especially for real estate and family law.
Canada
There are two applicable eSignature laws in Canada. These are the Personal Information Protection and Electronic Documents Act (PIPEDA), and The Uniform Electronic Commerce Act (UECA).
At the provincial level, eSignatures have been recognized to be legally enforceable since UECA was made into law in 1999. In total, nine provinces in the country adopted the digital signature law.
In Canada, eSignatures are bestowed the same legal validity as manual signatures. Certain family laws involving trusts, wills, divorce, and real estate transactions are not covered under PIPEDA.
China
Under the Electronic Signatures Law of the Republic of China, electronic signatures are acceptable and legally binding.
However, the court system of China still greatly depends on paper-based documents. For electronically signed documents to be admissible in court, the parties involved must provide the necessary electronic records. These will serve as evidence that a signed agreement legitimately existed between parties.
Despite its legal validity in China, handwritten signatures and manually signed documents are still preferred and more admissible in court. This is especially the case with legal matters involving the Chinese government.
United Kingdom
Much like the US, Canada, and other countries mentioned, eSignatures are legally binding in the UK. Laws such as the Electronic Communications Act 2000, and the Electronic Signatures Regulations 2002 legally provide the eSignature regulations.
The first digital signature law enacted in 2000 provides a comprehensive detail of electronic transactions and digital contracts signed electronically. The 2002 eSignature regulations, meanwhile, describe the legality and enforceability of digital signatures.
There are, however, transaction types that may require further assessment and not be covered by the law. This includes real estate, banking, lending, and government filings. More evidence is needed to prove their authenticity for these to be considered admissible.
Overview of the Legal Validity and Enforceability of eSignatures
There are a number of general principles that can be applied in order to assess the enforceability of electronic signatures. These are as follows.
- Signer intent. The intentions of the parties involved must be considered. It is important that the parties have expressly agreed that electronic signatures will be used in lieu of traditional signatures. If proof of intent is then established, this will favor the party being questioned of a contract’s validity.
- Verification. The electronic signature affixed to the document should indicate the signatory’s intention to be bound by the document. Typically, this will involve some form of electronic verification, such as a digital signature. This can be verified with the use of reliable eSignature software with an audit trail feature.
- Identification. The electronic signature must be linked to the signatory in a manner that is verifiable. That is, it should be possible to identify the signatory and confirm that they were the ones who signed it. This is a key feature of many eSignature providers.
- Security. Finally, it is also important to consider the overall security and reliability of the electronic signature software being used. If the system is secure and reliable, this will add weight to the argument that electronic signatures are legally enforceable.
Fill is one of the most trusted eSignature providers in the market. Fill was designed to help individuals and businesses to make their workflow a breeze with digital signatures. On top of this, Fill reassures that all documents stored and electronically signed in the platform are valid and enforceable.
Make Your High-Level Documents Legally Binding with Fill
Fill is a paperless solution to secure all your business transactions and digital contracts. With Fill, your documents are legally valid, enforceable, compliant with federal and international laws, and equipped with military-grade encryption features. This guarantees 100-percent safety and security for all your documents.
Moreover, this integrated solution is complete with an audit trail feature to track document progress. This allows for the detection of when, where, and who signed a document. This feature adds up to why digital signatures are admissible and legally valid, as supported by all electronic signature laws.
Ensure that all your electronically signed documents are safe and compliant with federal and international laws. Sign up for free today.
