Electronic signatures – often also called esignatures (or e-signatures) and digital signatures – are exactly what they sound like. They are a way to digitally sign legal documents using your computer, tablet or even smartphone. In a world that is becoming more and more digital, electronic signatures are becoming more prevalent. Read this blog to find out more about esigning and how it works.
What are electronic signatures?
An electronic signature is any ‘data in electronic form which is attached to or logically associated with other data in electronic form and which is used by the signatory to sign‘. This covers a variety of forms, including:
- typing the name of the signer (known as the ‘signatory’) at the bottom of an email
- a scanned manuscript signature
- clicking an icon on a website to confirm an order
In essence, electronic signatures are any form of digital signature used to ‘sign’ a document online. Esigning is an alternative to wet ink signing paper documents.
Are electronic signatures legal?
Electronic signatures, like traditional handwritten signatures, are legal.
While a framework of laws (including the Electronic Communications Act 2000 and the Electronic Identification and Trust Services for Electronic Transactions Regulations 2016) has existed for several years, they never quite clarified the validity of electronic signatures. However, in 2019 the Law Commission published its report on the electronic execution of documents. This report found that existing legislation and case law enabled electronic signatures to act as valid signatures, provided an authenticating intention can be demonstrated.
When can electronic signatures not be used?
In England, Wales and Scotland, most documents can be signed electronically. However, exceptions do exist.
Certain documents which cannot be esigned in England and Wales include:
- Powers of attorney, including Lasting powers of attorney
- Wills and codicils
- mortgages and charges
Care must also be taken with regard to deeds. A deed is a special kind of document that must meet certain criteria (ie it must say that it is a deed, be made in writing, be signed as a deed in front of witnesses and delivered). Examples of deeds include:
- some leases and tenancies
- certain business agreements (eg Shareholders’ agreements and Partnership agreements)
- transfers of land
- powers of attorney
In recent years, the Law Commission found that deeds can be electronically signed, provided that all other formalities are complied with. This is especially important as deeds must still be physically witnessed and cannot be witnessed over video call or other virtual means, even when being esigned. Instead, the witness must clearly see the signer electronically sign and then sign electronically themselves. It is recommended, that deeds that are esigned include a clause confirming that all witnesses were physically present when witnessing the electronic signing. As a result, great care must be taken when esigning deeds and, in some cases, it may be easier to wet-sign deeds to ensure that they are enforceable. For more information, read Execution of deeds.
In Scotland, documents in respect of Wills, testamentary trust dispositions and settlements and codicils cannot be executed and signed electronically.
For more information, read Signing contracts.
How do electronic signatures work?
Electronic signatures act much like handwritten signatures: they are unique to each signer and act as a record of the agreement. The main difference is that documents are signed online rather than by hand on paper.
Generally, esignature software solutions, like RocketSign®, rely on common electronic authentication methods (eg email addresses) to verify the identity of signatories. In some cases, multi-factor authentication may also be used.
Once a document is esigned, the signatures carry with them a layer of information about who signed the document and when and where the document was signed, providing a clear audit trail alongside the final document. This means that electronic signatures don’t just act as authentication, but they also track and store signatures and signatory information at the different stages of the document’s lifecycle.
What are the benefits of signing documents digitally?
With the ongoing digital transformation, digital signatures are being used more and more. However, there are many benefits to electronic signatures than simple necessity, including:
- greater flexibility – digital signatures allow you to esign your document anytime and anywhere (eg from remote locations or while you’re on the go)
- reducing cost – especially relevant for business, esignatures can help you save money by speeding up workflows, saving time and reducing expenses related to the printing, posting and storing of documents
- becoming more sustainable by going paperless – by esigining documents the amount of paper required can be drastically reduced (especially for businesses)
- greater efficiency – using esignature software solutions (like RocketSign®) helps streamline the signing process. Document owners (and signers) can see who has signed the document and when, can track the signature status of documents, send signature reminders and even store fully signed documents in one place
The big takeaway is this: an esignature is just as legal as a traditional, pen-and-ink signature. It’s simple, it’s time-stamped and it’s stored for you whenever you need it. And it’s included in every Rocket Lawyer membership.
If you want to sign documents electronically (or if you want someone else, like a customer, to sign documents online), you can do this with RocketSign®. RocketSign® lets you add electronic signatures to your online document. Using this technology you and your customers can sign using any computer, tablet or other mobile device.
For more information on esignatures, read our guide on Electronic signatures and do not hesitate to Ask a lawyer if you have any questions.
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