Digital Signature Legality and Interest in the World

Table of Contents

1. What are digital signatures?
2. The legality of digital signatures 
3. Are digital signatures better than ‘wet’ signatures?
4. Conclusion

Digital signatures play an important role in ensuring that businesses conduct their operations with ease, but are they legal? 

Prior to the computer age, people executed contracts and agreements with pen and paper. It was, therefore, easy to authenticate agreements by penning down a signature, usually at the end of documents.

However, computers have brought considerable changes to how contracts are created now. Organizations are going from digitizing sections of their business to operating completely online. The unavoidable need to engage with international customers has compelled many companies to embrace this change.

There is also the concern of global warming, trees, etc. But perhaps, none of these reasons hit organizations like the pandemic. The COVID-19 pandemic forced many to go digital, and we saw the rise of remote work. And although the demand for remote work abates, that for digital signatures remains.

With the rise of digital signatures comes more questions about its legality. The short answer is that in most cases, digital signatures are legally accepted and have the same ruling as a handwritten signature. There are instances where you may need a long answer, though, and it’s all laid out below.

The legality of digital signatures

There are many national and international laws that confirm the legality of digital signatures. For example, the Electronic Signatures in Global and National Commerce Act (E-SIGN) was passed into law in 2000 by the United States. Alongside the Uniform Electronic Transactions Act (UETA), It signaled the beginning of acceptance for digital signatures worldwide. 

Today, many other nations have followed suit to establish specific laws that enforce legality. Others have added it to existing laws. For instance, Canadian law states that letters, characters, and numbers can be used with digital signatures.

The United Kingdom also granted legal status to digital signatures in 2000 through the Electronic Communications Act. However, they adopted the European Union’s Electronic Identification and Trust Services for Electronic Transactions (EU Exit) in 2016.

As for the European Union, most of the countries under them have also recognized digital signatures as a legal and enforceable means of authentication. 

It is common to find digital signature laws or sections under laws attesting to its legality. In fact, in countries where there are legality issues with digital signatures, it is usually a case of certain conditions or requirements.

Therefore, it is essential to consult relevant laws when reaching agreements, especially with parties in other countries. 

In any case, digital signatures are usually valid as far as other elements that make up a contract are present. For example, there must be an offer, consideration, acceptance, capacity, consent, intent, etc.

The E-SIGN, for instance, requires that all parties consent to digital signature use. In addition, there must be no force or threat to sign digitally. Instead, the signer should be given the option to use a traditional handwritten signature if it is what they prefer. Other provisions include the verification of the signer.

If all criteria have been met, the legality of digital signatures stands and businesses can go on. There are, however, certain instances where it may be impossible to use digital signatures. Those are exceptional cases, such as in the event of death, birth, adoption, or divorce. 

Are digital signatures better than ‘wet’ signatures?

The benefits of digital signatures are numerous, some implicit and others explicit. Direct benefits of digital signatures include convenience, ease, speed, cost-effectiveness, and mobile-friendliness. 

You can use digital signatures with other technologies and apps. That’s why you can quickly sign a Word document digitally in seconds. 

Digital signatures will reduce the timeline for approving agreements to hours and sometimes minutes. It also makes it possible to conduct businesses across the globe while giving concerned parties a centralized view of the edit and audit trail.

All it takes is a notification; each party can sign the document from anywhere. There is no need to print, scan, or move papers between offices. As a result, the HR departments can hire faster, and the sales team can increase efficiency when they adopt digital signatures. 

Digital signatures are also more secure due to the technology employed in their authentication. In place of handwritten signatures that can be forged, it uses secure algorithms to prevent alterations. 

Furthermore, since digital signatures are done electronically, it also reduces the need for papers, which is a considerable advantage to the environment.

Conclusion 

Digital signatures have the same rulings as handwritten signatures as far as legality is concerned. Numerous national and international laws have supported the use with occasional differences in requirements. 

Not only are digital signatures enforceable in many countries, but they are also very convenient to use and have several benefits. 

If you adopt a contract management tool like Contractbook, you will have access to the best digital signature functions, among other advantages.