Understanding Electronic Signatures
In today's digital age, "Are electronic signatures legal?" is more relevant than ever. With the rise of platforms like DocuSign, Adobe Sign, and PandaDoc, electronic signatures, or e-signatures, have become increasingly common. But are these signatures legally binding? And what makes an electronic signature legally binding? Let's dive into these questions, focusing on the legal frameworks in the United States and Canada.
An electronic signature, an e-signature, is a digital mark indicating agreement or approval on a document or form. It can take many forms, including a typed name, a scanned image of a handwritten signature, a click on a "sign" button, or a unique code. The critical question is: is an electronic signature legally binding?
Legality of Electronic Signatures
The answer is a resounding yes; in the United States and Canada, electronic signatures are legally binding and recognized by law, provided specific criteria are met.
The ESIGN Act and the Uniform Electronic Transactions Act (UETA) provide the legal framework for electronic signatures in the U.S. They state that a contract or signature may not be denied legal effect, validity, or enforceability solely because it is in electronic form. The United States Electronic Signatures in Global and National Commerce (ESIGN) Act and the Uniform Electronic Transactions Act (UETA) have four major requirements for an electronic signature to be legally binding as per U.S. law. Those requirements are intent to sign, consent to do business electronically, an association of signature with the record, and record retention.
Electronic signatures, including those created through DocuSign, Adobe Sign, and PandaDoc, are legally binding in the U.S. (for most documents, but not all) because those services follow U.S. legal requirements.
Similarly, In Canada, electronic signatures are federally endorsed by the Personal Information Protection and Electronic Documents Act (PIPEDA). This law equates electronic signatures with physical ones, making them fully court-admissible and allowing companies to freely use digital and paper documents. However, PIPEDA stipulates that an electronic signature must be unique, created under the signer's sole control, able to confirm the signatory's identity, and protected by technology that can detect any subsequent changes in the document. This means simple marks like an "X" or an icon are not considered valid electronic signatures as they cannot be identified as unique or prove the signer's identity. Electronic signature providers DocuSign, Adobe Sign, and PandaDoc follow all PIPEDA requirements for e-signatures in Canada.
On the provincial level, electronic signatures have been legally accepted for years, drawing on the Uniform Electronic Commerce Act (UECA) and other provincial commerce legislation like Ontario's Electronic Commerce Act. The requirements for electronic signatures provincially are similar, if not less onerous than PIPEDA, and thus, electronic signature providers DocuSign, Adobe Sign, and PandaDoc are legal in at least nine of ten provinces because they follow all requirements for e-signatures in the provinces. Quebec is the only province with its own electronic signature laws, and this article will not discuss those laws.
What Makes an Electronic Signature Legally Binding?
Generally, across the U.S. and Canada, several criteria must be met for an electronic signature to be legally binding. These include:
- Identity of the Signatory: The signer's identity must be verifiable. This can be done through various methods, such as matching the email address used in the invitation to sign with the one entered upon signing, using a one-time passcode supplied by the sender, or sending a one-time passcode via text message.
- Intent to Sign: It must be clear that the signer intended to sign the document and understood that they were signing a legally-binding document.
- The integrity of the Document: The document must remain unchanged after signing. Any alterations to the document after signing can invalidate the signature. Encryption methods can be used to ensure the integrity of the document. Being able to store the signature and the associated certificate is also crucial.
Are DocuSign, Adobe Sign, and PandaDoc Legally Binding?
Electronic signatures created through DocuSign, Adobe Sign, and PandaDoc are legally binding as they meet the abovementioned criteria. Indeed, These platforms offer features that exceed the legal requirements of electronic signatures in the U.S. and Canada, such as identity verification, audit trails, and document encryption, among others.
Is a Typed Signature Legally Binding?
Yes, a typed signature can be legally binding. However, a typed signature will provide a lesser level of security and verifiability than an electronic signature (like from DocuSign, Adobe Sign, and PandaDoc).
Summary: Enforceability of E-Signatures
In conclusion, electronic signatures are enforceable and can be legally binding in the U.S. and Canada. However, to ensure that the necessary criteria are met to make an electronic signature legally binding in those jurisdictions, use platforms like DocuSign, Adobe Sign, and PandaDoc as a best practice instead of simply typing the signature into the word processer.
Remember, the enforceability of an electronic signature depends on various factors, like the method of signature, the type of document being signed, and the laws of the specific jurisdiction. Note, for example, employment contracts are a kind of document that e-signatures are legal for in the U.S. and Canada. Thus in the U.S. and Canada, our goHeather employment contracts' e-signatures are enforceable because we use PandaDoc to satisfy all the legal and legislative requirements necessary for an e-signature to stand up in court.
The digital age has revolutionized how we conduct business, and electronic signatures are a significant part of this transformation. They offer a fast, efficient, and secure way of signing documents, reducing the need for physical storage and time-consuming paperwork. As long as the necessary legal criteria are met, electronic signatures can be a powerful tool in your digital toolkit.
So, the next time you're asked, "Is a typed signature legally binding?" or "Are electronic signatures legally binding?" you can confidently answer, "Yes (for almost every kind of document)." But remember, not all electronic signatures are created equal. Ensure you're using a trusted platform like DocuSign, Adobe Sign, or PandaDoc to ensure your electronic signatures are legally binding.
goHeather is an HR platform that automates employment contracts. To make your own airtight employment contract with all the terms and conditions you need for any province in Canada in just five minutes, click here.