Ready to accelerate the pace of your business? Here are a few tips to make sure your electronic signatures are binding.
Make it very clear that someone will be signing a legal agreement electronically.
For an electronic signature to be binding, a signer must actually intend to sign the contract electronically. This may seem like an obvious point, but it can get tricky if you are trying to create an eSignature for an ecommerce checkout flow.
Keep electronic records and provide them to all signers.
You need to keep a record of any contract that is electronically signed, including the date, the method used to apply the signature, any authentication measures used, and an audit trail. Everyone signing the contract should get a copy of this electronic record.
Make sure you can prove who signed the agreement.
Signer authentication methods can include email, secure links, unique signer codes, and multifactor authentication (e.g. codes sent via SMS).
You don’t need a squiggly black line that looks like an ink signature.
The E-Sign Act in defines “electronic signature” as “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.” There is no requirement by E-SIGN or UETA that an eSignature look like a pen-to-paper signature. In fact, a federal court in 2013 determined that a clickwrap signature DID in fact meet the requirements set forth in E-SIGN to be legally binding.