Are eSignatures legally binding?
What is an eSignature?
The primary purpose of this new law was to ensure three things:
- Data integrity
- Non-repudiation (the assurance that someone cannot deny something)
According to the statistics, transactions with electronic signature have increased 8fold (from 89 million to 754 million) globally over the last five years. They are proven to be more secure and reliable, compared to the handwritten signatures. In addition to being more secure, eSignatures help companies go paperless and save a lot of time and resources. It’s no wonder why eSignature continues to grow in popularity in every sphere. Everyone wants faster, better, cheaper.
What are the benefits of eSignatures?
Below are 8 proven benefits of employing eSignature:
- Speeds up document workflows.
- Reduces paper-related waste.
- Saves on costs.
- Enhances security.
- Improves customer/employee experiences.
- Audit trail and time stamp for recording IP addresses.
- Legally binding.
- Sets an organization up as a future-forward leader/thinker.
As soon as eSignature becomes an integral part of a company’s workflow, it brings additional benefits, notably, speeds up payments and sales, unburdens customer reps by enabling direct access to documents. Moreover, companies that go paperless reduce human errors in their documents by 90%. Electronic signatures are now widely used in nearly every industry to sign contracts, rental agreements, waivers, tax forms, and financial documents.
What makes eSignatures legally binding?
Let’s consider the factors below that make eSignatures legal and binding:
- An eSignature shows that a signer read and accepts the content in a document/agreement.
- An electronic signature shows that all parties involved agree to do business electronically.
- A good eSignature platform tacks everything that happens to a document during the signing process.
The mentioned criteria is recommended by the ESIGN Act for every electronic signature workflow. ESIGN also recommends that any law requiring signatures is satisfied by an electronic one; eSigned documents can be submitted to the court as evidence.