• By: Passageways
  • January 20, 2017
Reading Time: 3 minutes

The Law of eSignatures eSignatures offer the same legal standing as a handwritten signature. Providing a fast, secure, and accurate identification alternative for signatures, while keeping all your records compliant.

This perfectly legal, markedly more secure, amazingly simple process is the frontier of the complete digital transformation of board governance. Here’s what you should know about the legal status of eSignatures.

This information is intended to help businesses understand the legal framework of electronic signatures. However, Passageways does not provide legal advice.  We advice all boards to consult and annually update their bylaws, in accordance with their state laws, with the advice of legal counsel.

United States Law

Are eSignatures Legal?

Yes.

Status and Enforceability of U.S. Law

Enacted in 2000, the federal legislation governing eSignatures is called the Electronic Signatures in Global and National Commerce Act (ESIGN) and the Uniform Electronic Transactions Act (UETA). 47 states have enacted a version of the UETA. These laws provide:

  • No contract, signature, or record shall be denied legal effect solely because it is in electronic form
  • A contract relating to a transaction cannot be denied legal effect solely because an electronic signature or record was used in its formation

The ESIGN Act and its state level siblings demand that signatures be granted legal effect or enforceability whether created electronically or with traditional ink. These laws permit the use of electronic signatures for virtually all types of agreements with some excluding property transfers, wills, and some legally required notices to consumers among others.

There are four key aspects to ensure eSignatures are valid.

  1. An intent to sign must be present. Just like traditional signatures, the eSignature is only valid if each party intended to sign
  1. There must be an association of signature with a record. To comply with ESIGN Act and UETA the eSignature must be kept with a record that reflect how the eSignature was created or provide a textual or graphic statement.
  1. All parties must affirmatively agreed to use electronic records for the transaction. 
  1. Record retention. eSignatures require that electronic signature records be capable of retention and accurate reproduction for reference by all parties or persons entitled to retain the contract or record.

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U.K. Law

Are eSignatures Legal?

Yes.

Status and Enforceability in the U.K. 

Taking effect in mid-2016, and applicable to the European Union, the Electronic Identification and Trust Services Regulation (IDAS), makes eSignatures legal with prior consent. The regulation made eSignatures and other verification services admissible in legal proceedings. The regulation sets forth varying levels of security standards for electronic signatures to qualify as the equivalent of a wet-ink signature.

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Canadian Law

Are eSignatures Legal?

Yes. 

Status and Enforceability in Canada

The Personal Information Protection and Electronic Documents Act (PIPEDA) provided eSignatures the same legal standing as wet-ink signatures. The law requires:

  • The electronic signature must be unique to the person using it;
  • The person whose electronic signature is on the document must have control of the use of the technology to attach the signature;
  • The technology must be used to identify the person using the electronic signature; and
  • The electronic signature must be linked to an electronic document to determine if the document has been changed after the electronic signature was attached to it.

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Indian Law

Are eSignatures Legal?

Yes. With Consent.

Status and Enforceability in India

The Information Technology Act of 2000 provides eSignatures the same legal standing as wet-ink signatures. The law sets forth two levels of security standards for electronic signatures to qualify as the equivalent of a wet-ink signature.

The Information Technology Act provides that when an agreement is “expressed in electronic form or by means of an electronic record, such contract shall not be deemed to be unenforceable solely on the ground that such electronic form or means was used for that purpose.”

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About The Author

Passageways
Passageways
Passageways is a SaaS provider of collaboration solutions for boards and employees. OnBoard is a board governance solution, designed to improve collaboration for directors and administrators throughout the meeting life cycle. OnSemble's a lovable, drag and drop, Employee Intranet that connects an entire workplace to one central collaboration hub, builds your culture, and inspires employee engagement.