Title: Service Provider Manager Company: Vixxo
“Makes contracts and signatures easy. The best part is that we no longer have to worry about paperwork coming back modified, red lined, or with white out. The users we delegate can fill out and modify only fields we delegate. Also there are no more missed fields on our contract as if we make them required it wont allow the user to move forward and sign until they complete the required fields.”
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Electronic signature, virtual signature or e-signature is a legally enforceable and a valid way to obtain the intent to sign on any electronic records or documents.
Here are some definitions as per the ESign Act:
“Electronic” – The term “electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities
“Electronic Agent” – The term “electronic agent” means a computer program or an electronic or other automated means used independently to initiate an action to respond to electronic records or performances in whole or in part without review or action by an individual at the time or the action or response.
“Electronic Record” – The term “electronic record” means a contract or other record created, generated, sent, communicated, received, or stored by electronic means.
“Electronic Signature” – The term “electronic signature” means an electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.
The world is widely adopting online or electronic transactions including electronic documents and contracts. E signature solutions provide a perfect way to capture signatures on the electronic document online and have become a crucial part of online transactions as they help companies close deals or sign important documents quickly and efficiently while cutting costs significantly.
Electronic document signing has been enacted legally as equivalent to handwritten signature or wet-ink signatures in the US by the ESign Act of 2000 (US Federal Law), UETA and other regulation, Canada by PIPEDA law, European Union by eIDAS regulation (European Union), UK by Electronic Communications Act 2000 (UK) and other similar laws in a whole host of countries around the world.
While virtual signatures consist of simply entering the name during signing online (which still needs to be captured with additional information associated with the e signatures), it is widely supplemented by digital signatures which adds non-repudiation and tamper-proofing element to any electronic signatures making them highly secured. Please read more about the Electronic Signatures vs. Digital Signatures non-technical blog to clarify the difference between the two forms of signatures.
Yes. Both European and U.S laws have long acknowledged that e signature solutions are permissible in legal proceedings to establish the identity of any electronic statement in which they are incorporated. Here are two major laws that make virtual signatures in the USA legally binding.
The Electronic Signatures in Global and National Commerce (E-SIGN) Act – This act granted e-signs the same legal weight as handwritten signatures throughout the United States, greatly speeding up and simplifying how organizations assemble, track, and manage signatures on documents of all kinds. A good e-signature solution according to the ESIGN Act, should meet the following requirements;
The Uniform Electronic Transactions (UETA) Act – This act has been welcomed by 47 states, Puerto Rico, U.S Virgin Islands and the District of Colombia. However, three states – New York, Washington, and Illinois – have not adopted UETA, though they have designed their own statutes relating to electronic signatures.
Many people use these two terms interchangeably, but in reality, a digital signature is not equivalent to an electronic signature.
An electronic signature according to the US Federal ESIGN is an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a person with the intent to sign a record.” An electronic signature is easy to use, and customers can sign documents online; for instance, by checking a box. In short, a electronic signature is simply a representation of an individual’s voiceprint, symbol, handwritten signature in an electronic image form.
A digital signature, on the other hand, contains an algorithm that encodes the signature to produce a unique signature certificate. It is a technique of encrypting a document, with undetectable digital codes, making it virtually impossible to alter or duplicate it.
Since E-SIGN and UETA Acts are meant to be used for commercial transactions, several types of documents – particularly governmental and legal type document – are not covered. For instance, trust and wills should be signed manually. Additionally, court documents; family law matters such as adoptions, divorces or marriages; or notices of termination like utility cutoffs, insurance cancellations, and evictions normally must involve paper documents.
Most importantly, although E-SIGN and EUTA apply to commercial transactions relating to contract and sales, it does not apply to bank deposits and collections, warehouse receipts, bank deposits, letters of credit, investment securities or transactions concerning a security interest.
E signature solutions are broadly accepted and employed in common law countries such as Canada, Australia, United Kingdom, and the United States. The legal focus is greatly on the circumstances and facts surrounding the event of signing and not the technological approach used.
Of the many countries which have endorsed electronic signature legislation, some have adopted acts, policies, and laws that stand out for their diligence and inclusivity. These include:
USA: Electronic Signatures in Global and National Commerce Act – The E-sign Act, enacted in June 2000 was the United State’s first key federal law which guarantees the legality of documents signed with e-signature.
USA: Uniform Electronic Transactions Act – This act, which has been adopted by 47 states so far, aimed at bringing uniformity to various state laws in regards to online document archiving and e signatures.
Canada: Personal Information Protection and Electronic Documents Act – – Better known as PIPEDA, this act was intended to encourage e-commerce by boosting consumer’s trust in dealing with businesses.
Australia: Electronic Transactions Act 1999 – This act provides a regulatory structure that allows the use of electronic transactions and makes sure that no document will be rejected simply because it was electronically completed.
European Union: European Directive 199/93/EC – The EU directive is akin to the U.S ESIGN Act, in the sense that, it offers protection for consumers and businesses which agree to carry out business online using digital documents and e signatures. The European Union in 2014 repealed the 199/93/EC directive, with the aim of crafting a more standardized pan-EU market for electronic transactions.
United Kingdom: Electronic Communications Act 2000 – This act ensures the legal acceptability of eSignatures regarding electronic communications, encryption, and data storage England, Wales and Scotland residents.
United Kingdom: Electronic Signatures Regulation 2002 – Based on this regulation, an electronic signature in the U.K is in the form of electronic data that is associated or attached to another piece of electronic data.
Rest of the world – All over the world, more than 60 countries have drafted their own laws and regulations in regards to digital transactions and e signatures. In short, the number of countries which have some kind of legislation regarding electronic signatures is continuing to increase every year.
DTM is a collection of online services which enable businesses to manage document-based transactions digitally. DTM technology guarantees digital signatures that are highly authenticated and secure, making them more legally enforceable compared to traditional signatures.
The Industry standard for Digital Transaction Management is called DTM, and it has clear requirements for security, privacy, scalability, availability, universality, compliance, and openness. DTM requires industry experts to craft and employ best practices for practitioners in various fields, from lawyers to doctors to government workers.
Since their legal effects match the ones of typical handwritten signatures, e signs can be utilized in various situations such as:
Public Key Infrastructure (PKI) technology is a form of technology which ensures virtual signatures are non-forgeable.
In a PKI system, each electronic signature transaction consists of a private key and a public key. While the public key is easily accessible and available to those who need to authenticate the signer’s online signature, the corresponding private key is confidential and is only available to the person signing the documents online.
Under the eIDAS regulation, there are three distinct levels of e-signatures; “simple” e signature, qualified e signature and advanced e signature. Under the eIDAS regulation, there are three distinct levels of e-signatures; “simple” e signature, qualified e signature and advanced e signature.
Source (eIDAS Article 3).
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No. Electronic signatures do not have to match your handwritten signatures. Whether you use your computer mouse to make a signature or prefer scripting your full name or initials, any mark or symbol you make is legally valid.
No. A document once electronically signed is usually stored, encrypted and backed up on secure servers. After someone signs a document online, they cannot add fields or alter their signature.
Yes. You can do so unless it has been completely signed by all parties. When signed, documents create a binding contract and therefore cannot just be canceled without agreement from the signatories.