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Electronic signatures, or electronic signatures, allow us to sign legally binding contracts online without printing a paper or picking up a pen. They are more convenient than a traditional signature, save time and shipping costs as they can be used to sign documents remotely, making the recipient’s location irrelevant and results almost immediately. In return, it’s easy to see why electronic signatures have become a must for many small businesses.
What is an electronic signature?
Put simply, an electronic signature is just that: an electronic signature. It allows signers to approve or agree with the terms of a document, just like with wet signatures. An electronic signature is essentially a process that computers use to authenticate the signer and certify the integrity of the document.
Digital signatures are a type of electronic signature that uses complex algorithms, Certificate Authorities (CAs), and Trust Service Providers (TSPs) to authenticate the signer along with the integrity of the document.
electronic vs. Digital signatures: the subtle difference
The difference between an electronic signature and a digital signature is subtle for anyone who is sending or signing a document. However, they’re not that subtle for auditors, compliance officers, judges, and regulators. An electronic signature is a generic term for any electronically transmitted signature, whether it is a digitally written signature on a document or a signature generated via an electronic document signing service such as DocuSign. Digital signatures are a kind of electronic signature with advanced features that keep them compliant and secure.
Standard electronic signatures can be fine for agreements and approvals where security and compliance standards are lax. Think about situations in which an HR professional has to approve an employee’s vacation. An electronic signature can be perfect for internal use.
However, when dealing with processes that are subject to intense security and strict compliance standards, a digital signature is what you need. In basic terms, digital signatures are a subset of electronic signatures with specialized features that lend themselves best to industries such as legal and healthcare. Digital signatures are equipped with audit trail, encryption and other back-end tools to ensure that the signature is authentic. These are popular for contracts, tax documents, insurance forms, and so on.
Like a regular but better signature
Electronic signatures are superior to their ink-based predecessors. They are instant, portable, legally binding and reduce our damage to the environment. And they are often backed by technology that ensures the signature is authentic.
Immediate, convenient, foolproof
Electronic signatures accelerate approvals and agreements by eliminating downtime from the process. With electronic signatures, you don’t have to wait for the mail or get in the car to deliver documents. The moment you apply your electronic signature to a document is the moment you can move on to the next step.
Electronic signatures also make signing documents much easier. Because e-signature solutions are so portable, you can sign or request signatures from virtually anywhere in the world, using the device of your choice. You don’t need to print, sign, scan, then resend your document, and you don’t need to own a fax for the sole purpose of sending and receiving signed documents.
And since many e-signature solutions don’t allow you to send a document until every signature field is filled in, you don’t have to worry about small mistakes turning into huge problems.
Electronic signatures are as legally binding as their ink counterparts. In 2000, the United States passed the E-Sign Act, which legally defines what an electronic signature is and gives those electronic signatures the same legal authority as an electronic signature. Almost all states have also adopted the Uniform Electronic Transactions ACT (UETA) which authorizes electronic signatures. Some types of documents, such as wills, cannot be signed electronically.
Having to print, scan and fax just to get an electronic signature isn’t just time-consuming and hassle. It is also harmful to the environment. Every appliance you buy increases your overall carbon footprint. The more devices you can take out of the equation it makes your workflow better for the planet. The same goes for any trees that need to be felled for the paper you are printing for your paper documents.
Use of electronic signatures
There is no way to do an electronic signature. The specifications depend on the electronic signature method in use. But in general, they mostly work the same way. When you seek someone’s approval or agreement, share your document, define the areas that require a signature, and send the document to the other party. It’s even easier when you’re the signer – you just need to open the document, sign all required fields, and then submit.
Electronic signatures in Microsoft Word
Sometimes, you may want to add an electronic signature to a Word document. This is fine for irrelevant use of your signature, such as in a cover letter or memo. And doing it is easy enough. You can sign a white paper page and run it through the scanner or open Microsoft Paint and draw your signature electronically. From there, it’s all about saving your image, pasting it into Word, and resizing it appropriately. The process works in a very similar way if you’re also using Google Docs.
But you don’t want to use Word files as a means of signing most documents. Anyone can edit the rest of the content of that document before adding their signature. If you have a contract or some tax documents, for example, you should convert that Word document to PDF, then use your preferred e-signature solution to sign or request a signature.
Frequently Asked Questions (FAQ)
Are electronic signatures legally binding outside the United States?
Electronic signatures are legally binding in most countries outside the United States, including Canada, China, Russia, Japan, and dozens of others. While there are subtle nuances between each country’s laws, they are generally the same. Legal experts should be consulted before using electronic signatures internationally.
Are electronic signatures secure?
Electronic signatures are secure and probably safer than wet signatures. Anyone can learn to copy someone else’s signature with enough time and practice. Furthermore, it is difficult for the average human to verify whether or not the signer has signed a signature. The electronic signature software, however, is protected by sophisticated cryptographic algorithms to prevent tampering and maintains an audit trail to resolve disputes.
Is e-signature technology right for me?
If you find yourself signing a document or requesting signatures multiple times a day, you should consider an electronic signature. Not only is it faster and easier, but many e-signature apps provide you with templates to streamline document processes, ways to keep track of all your documents, and tools to ensure every field in a document is signed.