Trying to understand whether eSignatures are legally valid or not.

Electronic Signature Law: The Validity of Electronic Signatures

Earlier this year, when COVID-19 hit the United States, we were all forced to quickly reevaluate how and where we do business. Face to face meetings turned to Zoom calls, and we rapidly adapted to a life where working remotely was the new norm. 

What did this mean for times when it truly seemed you needed to do something in person? For instance, what about conducting contractual business that normally requires your blue-inked John Hancock on the dotted line? 

Chances are if your signature was required this year, or if you were seeking a signature from someone else, an electronic signature was given in lieu of paper and pen. 

This upswing in virtual everything has been a life preserver for businesses and individuals alike, but it begs the question of validity. Are the virtual actions, approvals, and signatures we are offering valid and enforceable? Ultimately, if an issue arises, will a mediator or a court rule that an electronic signature constitutes an agreement? 

Revv can help. We offer a drag and drop editor to help you create documents, manage them collaboratively, collect electronic signatures, and even accept payment for services. We utilize electronic signature technology every day, so we’re well versed in the legality of electronic signing. 

We’ll explain whether or not your electronic signatures are legally enforceable, how long they are enforceable, where they’re accepted, and how they remain compliant. We’ll also cover documents that are not legally enforceable with an electronic signature.

Are Electronic Signatures legally enforceable?

You open a document, click a box, select a font, and suddenly you’ve “signed” an agreement. Bob Dylan was right:  the times, they are a-changin’. 

Whether you’re on the sending or receiving end of an agreement that requires an electronic signature, you really just want peace of mind in knowing:

  • The correct person will actually be electronically signing the document.
  • The signature will be accepted as binding and enforceable.
  • Both parties will be protected and indemnified against the use of the electronic signature.

The good news is, you can relax. While electronic signatures may seem new to you, or maybe just a lot more popular this year, they’ve actually been around since the early 2000s. 

President Bill Clinton signed the Electronic Signatures in Global and National Commerce Act into law on June 30, 2000, in an effort to bolster e-commerce and garner trust in the validity and safety of electronic business transactions. Electronic signatures have been in use since that time and have increased in popularity as more and more business move to more online-based models. 

What makes an Electronic Signature valid?

The E-Sign Act makes provisions for what constitutes a valid electronic signature. These provisions deal more with consumer consent and disclosure rather than the design or safety of the electronic signature itself. Here are the requirements for obtaining a valid electronic signature.

1. Consent. If you’re requesting an electronic signature from a client, the E-Sign Act states you must first obtain the client’s prior consent. The consent must inform the client of the following:

  • They’ll be signing electronically, not with pen and paper. 
  • Their consent covers a particular agreement, what the agreement is, and if any other documents, agreements, or transactions will be covered with this consent.
  • Consent may be withdrawn. An explanation of how to withdraw consent must be included, and any expiration that may occur which would not allow for the consent to be withdrawn. 
  • How they may obtain a paper copy of what they’re signing, and informing them of any fee associated with the cost of obtaining a paper copy.

2. Hardware and software requirements. Prior to obtaining a client’s consent, a person or company requesting an electronic signature must make the client aware of the hardware and software requirements for obtaining the electronic signature. 

This is to ensure that the client will have access to a computer and the software needed in order to effectuate the electronic signature. The client must ensure they’re able to access these items prior to giving their consent.

If at any time prior to signing the hardware and/or software requirements change, the client must be made aware in writing. 

  • Record retention. Records of electronic signatures and documents must be kept in accordance with appropriate law, and the company or person requesting the electronic signature must be responsible for keeping these records. 

How long are Electronic Signatures valid

Electronic signatures are valid as long as an original signature would remain valid. The term of validity of the signature will vary from agreement to agreement. In other words, the agreement that is electronically signed will govern the term of the agreement, and thereby, the term of the signature. 

When the agreement expires, the electronic signature will expire.

Where are Electronic Signatures valid?

Global commerce means global transactions and operating under different state laws. For companies transacting business in other markets, how can you determine if an electronic signature is valid? 

For instance, are electronic signatures valid in Canada? Yes, they are valid in Canada, but the provisions for their legality are slightly different. 

This means if you’re preparing an agreement to be signed by a corporation or individual in Canada, you will need to comply not only with the U.S. E-Sign Act requirements but also with the Canadian Personal Information Protection and Electronic Documents Act.

Likewise, if you’re conducting electronic business in any of the over sixty countries which accept electronic signatures, you will need to comply with their laws as well as the laws of the U.S. to ensure the validity of your electronic signature. 

When are Electronic Signatures not valid?

Electronic signatures are a convenient and time-saving way to conduct business, but there are some instances when only a pen and ink signature will be valid. 

The following documents are not covered as valid by the E-Sign Act.

  • Powers of attorney
  • Wills, trusts, and codicils
  • Adoption paperwork
  • Divorce decrees
  • Certain documents associated with UCC code
  • Court documents *a caveat here: many state and local courts have adopted e-sign procedures that allow for electronic signatures, but the E-Sign Act does not cover them.
  • Notices of default, eviction, or foreclosure
  • Cancellation of insurance benefits
  • Product recalls or notice of material failures
  • Documentation accompanying the transport of hazardous materials

It should be noted that each state has individual laws regarding the use of electronic signatures, so in addition to compliance with the E-Sign Act, it will always be necessary to determine if your state and/or local government has additional provisions regarding certain electronically signed documents. 

Are Electronic Signatures I create with Revv safe?

Want to begin using electronic signatures but not sure where to start? We can help. Using Revv to create your electronically signed documents is easy, and you can trust our team to ensure your electronic signature blocks are not only safe—they’re effective. 

Revv offers you an electronic signature platform along with an all-in-one document management that is the perfect solution for businesses of any size. 

Creating electronic signatures with Revv is easy. You can choose from two forms of document approval:

  • Soft sign: Send a document that does not need an electronic signature with an option to “accept or reject.” This is essentially the equivalent of clicking “I agree” when you accept cookies or install an app and agree to the terms of service. There is also legal precedence for soft signatures being legally binding in the U.S. and Europe. 
  • Bank-grade electronic signature. For documents that need an electronic signature, Revv offers secure, bank-grade electronic signature technology that is safe, fast, and easy to use. 

For an added layer of security, you can enable more layers of recipient verification by using SMS-OPT-based authentication. And it’s not only the documents that you create via Revv that are safe: the emails sent for e-signing are equally safe, due their unique, secure links. Best of all, electronic signatures created with Revv are mobile friendly, making for a more convenient process. 

Revv is your intelligent business partner that helps you create professional documents with safe and effective electronic signature blocks using simple drag and drop functionality. Our electronic signature blocks are easy for you to create, easy to edit, and easy for signers to understand and execute. 

The future is here

The future of document creation and execution is here, and it’s incredibly easy to switch from paper and pen to a digital format for conducting your daily business transactions. 

Obtaining electronic signatures is lightning fast, valid, and an acceptable method of document execution in the United States as well as in over sixty other countries. You can feel confident obtaining electronic signatures for your most important documents and reduce the time it takes for agreements to be executed simply by switching to electronic signatures. 

Revv makes transitioning to electronic signatures easy by providing fully integrated software that guides you in an easy step-by-step process. The drag and drop editor means virtually anyone can create a professional document with an electronic signature block. There’s even a selection of hundreds of ready-made document templates to get you started.

Using Revv to help you build your business, keep your team efficient, and manage documents from creation to completion is a great way to save time, money, and headache.

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Diksha

Diksha

Diksha is a Product Expert at Revv. She works with the creative marketing team to come up with new and exciting content for you. When not working, she can be found engrossed in the world of fiction novels while foot-tapping to Coldplay's tunes.

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