Product Features Tips and Tricks

How to avoid having your e-signature legally denied

In the past decade, the use of e-signatures has exponentially grown in popularity. Due to their convenience and ease of use, e-signatures are especially being increasingly utilized by businesses of all sizes.

However, some concerns still remain. In the past, the use of e-signatures in the judiciary sphere has faced some stumbling blocks. For many people, the process of using e-signatures in court cases and other matters related to law, is still unclear. One common problem is that many people still think that all e-signatures are valid in a court of law. But in reality, this is not the case.

In this post, we are going to take a closer look as to what exactly are the key factors that make digital signatures legally-binding in the United States.

Features of the UETA and ESIGN Act

Both The Uniform Electronic Transactions Act (UETA) and The Electronic Signatures in Global and National Commerce Act (ESIGN Act) give electronic signatures (that meet the required legal standards) the same legal status as traditional wet ink signatures in the U.S. These acts were implemented to:

signature-requirement

Allow any law with a signature requirement to be able to be satisfied by an electronic signature.

electronically-price

Allow electronically executed agreements to be presented as evidence in court.

validity-shield

Deny the validity of an e-signed document if it does not meet the requirements set down by these laws.

Therefore, it’s important that you make sure your e-signature provider complies with the ESIGN Act, the UETA and other digital signature requirements set down by the courts.

 

 

Digital signature concerns

If an e-signature is considered invalid because it does not meet all the legal requirements, the results can be not just inconvenient, but even damaging.

For example, in 2016, California bankruptcy lawyer Paul Bains’ documents were refused in court because of the method he used to sign them.

Paul Bains used the e-signature platform DocuSign for bankruptcy petitions and other documents. But judge Robert Bardwil of the US Bankruptcy court of California ruled that DocuSign did not meet the pre-set standards for e-signatures to replace a wet ink signature on legal documents. He said that although the platform could be used for other business purposes, it could not be considered legally binding in a court of law.

So primary concerns still remain the same – an ever-present lack of assurance that a signature is added on behalf of the right person.

The pivotal moment arrived when Bains was asked to prove that the electronic signature belonged to the legitimate party. But this was not possible, as DocuSign’s e-signature was generated using a ‘click to sign’ button and the declared name itself was just a placeholder that could actually be filled by anybody.

The unfortunate case of Paul Bains’ digital signature could have ended differently if a few important points had been considered.

 

What factors make digital signatures legally-binding?

In a court of law, a digitally signed audit log has to be provided, along with each completed signature throughout the document signing process. The audit log displays the time, date, transaction ID and user associated with each and every action.

SignNow not only meets, but exceeds the minimum requirements of these laws regulating e-signatures. The audit trail ensures that documents containing e-signatures are technically and legally sound. All processed files are stored in a secure cloud. Users may also deploy SignNow as an on-premises appliance to use as a fully private solution.

With SignNow, high-level security for your stored documents is ensured with SOC 2 Type II certification. SignNow also provides users with a digital certificate as an additional level of security. This is an authentication method that allows individuals to verify if a document has been altered in any way. The digital certificate ensures that a document is free of any tampering after the signer has added their signature. If a change is made in any way to a document after it has been signed, the digital certification created by SignNow is broken.

The platform is also compliant with HIPAA regulations for data privacy and security provisions for safeguarding sensitive medical information.

By taking all of these factors into account, you will have the knowledge to choose the right digital signature solution for streamlining your business and private operations while staying legally-compliant.

%d bloggers like this: