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What is the Legal Significance of An Electronic Signature?

The office space is increasingly moving away from dependence on papers to accomplish tasks. This is an indication that, while a completely paperless future is not possible tomorrow, the concept is not farfetched. One of the areas which are at the forefront of eliminating papers in the office is the electronic signature.


A brief look at electronic signatures

The signature is a crucial part of deal-making. Given the centrality of deal-making in the business world, one can conclude that the signature is quite important. At a stroke of a pen, one establishes their trust in a deal with another party or parties.

As the world of technology continues to evolve at breakneck speeds, how people use technology to accomplish day-to-day tasks is also evolving.

Electronic signatures are a product of this fast-moving digital world.

For starters, an electronic signature is a kind of legal esign which is simply electronic data used by a signatory to append a signature to a document. Similar to a handwritten signature, this esign has legal standing as long as it stays within the scope of the regulations under which it was created.

The primary objective of the esign is to authenticate an electronic document. It does so quickly using a mark which is uniquely identifiable. The use of electronic signatures is growing especially in legal transactions, business dealings, and even in private affairs.

Increased adoption of electronic signatures comes on the back of its ability to eliminate fraud. Further, the solution enhances the integrity of data as well as transparency. In this light, Stratistics MRC established that the digital signature market was worth $662.4 million in 2016. Between 2016 and 2022, the market is expected to expand at 30% CAGR to hit $3.2 billion in 2022.

The legal aspect of electronic signatures and what makes them legal

But there is a catch. The market is finding it hard to navigate the legal implications landscape of electronic signatures. In particular, the use of the esigns to authenticate documents has raised the need for a fundamental overhaul of authentication procedures. As such, there is a need for electronic signature legal services to help streamline the process.

Given the crucial role, signatures play in situations like in courtrooms, there is a need for people to clearly understand the legal significance of electronic signatures. However, it is imperative to note that not all countries deem electronic signatures as valid.

A great majority of developed countries deem esigns as admissible and legally enforceable. In these countries, electronic signatures hold up in court.

For instance, the US has two pieces of legislation which confer legal power to esigns. On the one hand, the Uniform Electronic Transactions Act (UETA) harmonizes state laws when it comes to issues like retention of paper records as well as guarding the legal standing of esigns.

On the other hand, the United States Electronic Signatures in Global and National Commerce Act (ESIGN Act) recognizes the legal status of electronic signatures. Here, the Act works on the condition that all the parties to a transaction or a contract elect to authenticate electronic documents electronically. As long as this condition is fulfilled, the electronic sign is legal and so are the documents.

Both the ESIGN Act and UETA provide that no one will deny the legal effect of signatures, records or contracts which are in electronic form.

Clearly, the law in the US recognizes the legality of electronic signatures and that makes them legal. Other jurisdictions like the European Union and Switzerland have their own laws which give legal effect to the esigns. Notably, the EU has electronic identification, authentication and trust services (eIDAS) while Switzerland has ZertES.

Criteria for certification of the legality of esigns

The legislation might vary in language across different jurisdictions but the intention is usually similar. As such, the criteria used to identify whether or not an electronic sign is legal is almost similar.

  • As the first step, it must be possible to uniquely identify the signer of the document. This signer must then be appropriately linked to the electronic signature without any instance which raises doubt.
  • The second step in the certification process is the signatory who has been successfully, and without any reasonable doubt, linked to the signature must be the only party who can access the private key used in the creation of the signature.
  • Third, the signature must have the ability to detect any kind of effort directed at tampering with the data associated with it. This is significant especially after an electronic document has been signed.
  • Lastly, there must be a way to void the signature in the event that the data associated with it is tampered with.

Electronic signature solutions

As the niche expands, demand for electronic signature solutions also grows. At the same time, the legal responsibilities associated with eSignatures are getting complex. As such, organizations which use the electronic signatures might need to create an eSignatures legal department to deal with any cases which might arise from that direction.

But this depends on the organization's ability to easily scale and support extra departments. What happens if a startup needed electronic signature solutions but does not have the capacity to expand to accommodate new departments?

The answer lies in electronic signature solutions for legal services . In particular, there exists numerous electronic signature software which streamlines the whole business of electronic signing of documents.

These solutions are cloud-based, which is to say that they can be accessed via any connected device. Also, the solutions can be accessed by multiple individuals at the same time. The solutions enable users to append signatures to a range of electronic documents.

Using these solutions affords users convenience in that one can simply email a document to the signatory with specific orders dictating where the signer should put the signature. Also, the solutions enable users to protect even websites by simply embedding signature fields in them.

Wrapping up

Ultimately, electronic signatures take the handling of documents for critical projects a step ahead in terms of security. Clearly, electronic documents are only accessible to authorized people. Also, only authorized signers can access and append their signatures on the documents. As such, the solution affords convenience and security to users like never before and makes the office space more fun and less draining.

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