Are electronic signatures legally binding?

United States: the ESIGN Act and UETA

The federal Electronic Signatures in Global and National Commerce Act (ESIGN, 2000) says that, for a transaction in or affecting interstate or foreign commerce, a signature, contract or other record may not be denied legal effect, validity or enforceability solely because it is in electronic form (15 U.S.C. § 7001).

ESIGN defines an electronic signature broadly: an electronic sound, symbol or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign it (15 U.S.C. § 7006). A typed name, a drawn signature or a click on “I agree” can all qualify. What matters is the intent to sign.

At state level, the Uniform Electronic Transactions Act (UETA) gives the same recognition. It has been adopted by every state except New York, which has its own Electronic Signatures and Records Act.

What ESIGN does not cover

Section 7003 of ESIGN lists records the Act does not apply to. Use the traditional process for these unless another law allows electronic signing:

• Wills, codicils and testamentary trusts
• Adoption, divorce and other family-law matters
• Most of the Uniform Commercial Code (sales and leases of goods under Articles 2 and 2A are covered)
• Court orders, notices and official court documents
• Notices of utility shut-off; of default, foreclosure or eviction on a primary residence; of cancellation of health or life insurance; and of product recalls that affect health or safety
• Documents that must accompany hazardous materials in transport

United Kingdom

Section 7 of the Electronic Communications Act 2000 makes an electronic signature admissible in evidence on the authenticity and integrity of the document it is attached to.

In its 2019 report on electronic execution of documents, the Law Commission of England and Wales concluded that an electronic signature is capable in law of being used to execute a document, including a deed, provided the person signing intends to authenticate it and any formalities for that document are met. Deeds, for example, still need a witness to be present.

European Union: eIDAS

Article 25 of the eIDAS Regulation (EU No 910/2014) says an electronic signature shall not be denied legal effect or admissibility as evidence solely because it is electronic or does not meet the requirements for a qualified electronic signature.

eIDAS defines three levels: a simple electronic signature, an advanced electronic signature (uniquely linked to and capable of identifying the signer), and a qualified electronic signature, which uses a certificate from a qualified trust service provider and has the same legal effect as a handwritten signature. Most everyday business contracts are signed with simple or advanced signatures; some member-state laws require a qualified one for particular documents.

What makes an electronic signature hold up

Courts ask the same questions they ask about ink: who signed, did they mean to, and is this the document they signed? A good e-signature record answers each one.

• Consent to sign electronically, recorded before signing
• Who signed: the email address the link was sent to, the time, the IP address and the browser
• Intent: a deliberate act such as drawing or adopting a signature and pressing a sign button
• Integrity: a cryptographic hash of the document, so any later change can be detected
• A certificate of completion and an audit trail kept with the signed PDF

What PactPen provides

PactPen provides simple electronic signatures and records each of the items above for every document. It is not a qualified trust service provider, so it does not issue qualified electronic signatures under eIDAS. If a law requires a qualified signature, a witness or a notary for your document, use that process.