Answering Common Questions About Electronic Signatures

Electronic signatures are becoming more and more popular because they are quick, effective and convenient. For organizations seeking new ways to improve business continuity over the last year, electronic signature usage has skyrocketed. In fact, in our 2021 State of Electronic Signature report, we found that 90% percent of Docusign eSignature customers have significantly increased their usage. But how did we get here?

On June 30, 2000, the milestone Electronic Signatures in Global and National Commerce (ESIGN) Act was passed in the U.S. to create a reliable norm for electronic signatures. The ESIGN Act provided e-signatures with clear legal effect in the U.S.

The ESIGN Act established that: 

  • Any law with a signature requirement can be satisfied by an electronic signature.
  • Electronically executed agreements can be presented as evidence in court.
  • The validity or enforceability of an electronically signed document may not be denied  simply because it is electronic.

Over the next 21 years, organizations in nearly every industry have adopted the use of electronic signatures to transform the way they do business. However, we sometimes hear questions regarding the legality, safety and compliance of the technology. 

So, in honor of ESIGN Day 2021, we decided to answer some common questions about electronic signatures.

Are electronic signatures legally binding?

An electronic signature can create a legally binding and enforceable contract.

In the U.S. and many other countries, electronic signatures and records can carry the same weight and legal effect as traditional handwritten signatures and paper documents. The Electronic Signatures in Global and National Commerce Act (ESIGN) and the Uniform Electronic Transactions Act (UETA) in the United States, the Electronic Identification and Trust Services Regulation (eIDAS) in the European Union and other similar laws throughout the world were enacted to recognize the enforceability of e-signatures.

Will an electronic signature hold up in court?

The authenticity of an electronic signature is actually easier to prove in litigation than traditional signature, thanks to built-in digital audit trails.

In disputes over agreements, courts are sometimes charged with establishing whether a signature is valid and attributing it to the signer, based on an evidentiary burden of proof. A digital audit trail does that brilliantly and in a way that other methods can’t touch, because the data captured around an electronic signature provides more concrete evidence around the authenticity of someone’s signature, and thereby their obligations under a contract, making it easier to meet the burden of proof.

Aren't e-signatures more likely to be forged or misused?

Traditional (wet) signatures can easily be forged or be tampered with. Electronic signatures have many layers of security and authentication built into them, along with proof of transaction: an audit trail that includes the history of actions taken with the document, including the details of when it was opened, viewed and signed.

At Docusign, we continually monitor the security and privacy landscape to ensure our approach remains in step and complies with the latest state, federal, and international requirements.

Are electronic signatures compliant in regulated industries?

Many industries that handle transactions requiring signatures daily, like healthcare and financial services, are subject to both state and federal regulation. 

Electronic signatures have actually made it easier for organizations in many regulated industries to conduct business in an ever-changing business environment. For example, many healthcare providers are now offering new patient enrollment as well as other transactional services online, and electronic signatures can authenticate these transactions.

Docusign’s data governance standards, policies and procedures are informed by a full range of factors, including adherence to industry regulations (such as 21 CFR Part 11, Annex 11 [EU], HIPAA, SAFE-BioPharma, and Sarbanes-Oxley) and significant investments in maintaining globally recognized certifications and attestations (e.g. enterprise-wide ISO 27001:2013 certification, PCI-DSS, and SOC 1 Type 2 and SOC 2 Type 2 reports).

For more information about the legality, security and compliance of electronic signatures, check out our Trust Center and our related blogs:

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