How To Be Compliant With Electronic Signatures

As we move into the digital realm of electronic signatures, some requirements and guidelines are associated with e-signatures that businesses must comply with.

In the United States, most situations are compatible with electronic signatures as long as certain legal requirements are met. Let’s explore a few tips for businesses to ensure documents comply with digital signature standards.

What Are Electronic Signatures?

Business and personal transactions widely accept electronic signatures across the world. Rather than having to be physically present to sign something conventionally in wet ink, users can sign electronically.

This innovation has changed the game for entrepreneurs and business-community members who no longer have to fax documents for legal signature purposes.

The benefits of electronic signatures far outweigh the downsides – going nearly paperless is just one of many.

Benefits of Electronic Signatures

Electronic signatures present many opportunities and benefits. You can use a form of electronic signature when you purchase from online retailers through safe and secure payment methods that retailers provide.

Ensuring you have these payment methods is one of the best ways to make a booming business succeed.

Other benefits of electronic signatures include being eco-friendly and carbon-free. E-signatures allow businesses to go global because consumers can gain access from anywhere and easily sign on to any digital device.

E-signatures can also save enterprises time and money, an added bonus that will help businesses thrive.

U.S. Legal Compliance Requirements

In 2000, two main acts were passed in the U.S. regarding electronic signatures. The Uniform Electronic Transactions Act (UETA) performs at the state level, and the Electronic Signatures in Global and National Commerce Act (ESIGN) at the federal level.

These acts have requirements to ensure e-signatures are legally binding. Those requirements are as follows.

Clear Intent to Sign

One must intend to sign with an e-signature for it to be valid. The person signing must understand the implications of what they’re signing and, in some cases, have the opportunity to decline the signature request.

Consent to Do Business Electronically

Most e-signature software provides the user with an option to consent to the document they are signing electronically. The business prompting the electronic signature must convey disclosures before they e-sign the document.

Clear Signature Validation

The person signing the document must fully grasp that an electronic version of their signature holds as much weight as a traditional wet ink version. One cannot use the fact that they used an e-signature as a means to discredit its validity.

The Integrity of Data

Adequate data integrity measures must accompany e-signatures to protect one’s e-signature records. The documents should be safe and secure from data loss or fraudulent tampering.

Record of E-Signature

Electronic signature records should adequately portray the agreement between the signer and the document they are signing. There must be proof that they are signing electronically instead of a wet signature.

Some electronic signature software presents an opportunity to download a copy of the document being signed electronically.

Electronic Signature Exclusions

There are a few situations where e-signatures are not an acceptable means of documentation. These rare instances are few and far between for requirement purposes. However, most court documents require wet ink signatures.

These situations include adoption papers, divorce agreements, court orders, and wills, end-of-life documentation, and health benefits and notices.

Electronic Signature Compliance

To ensure you have compliant e-signature documents, you must take these steps to meet the legal requirements in the United States. By implementing these policies, businesses can use electronic signatures to their advantage and reap the many benefits they provide.

Lavanya Rathnam

Lavanya Rathnam is an experienced technology, finance, and compliance writer. She combines her keen understanding of regulatory frameworks and industry best practices with exemplary writing skills to communicate complex concepts of Governance, Risk, and Compliance (GRC) in clear and accessible language. Lavanya specializes in creating informative and engaging content that educates and empowers readers to make informed decisions. She also works with different companies in the Web 3.0, blockchain, fintech, and EV industries to assess their products’ compliance with evolving regulations and standards.

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