What is an Electronic Signature?

An electronic signature, commonly referred to as an e-signature, is any electronic process that indicates approval or acceptance of a document or transaction. E-signatures provide a digital replacement for handwritten signatures, allowing agreements and contracts to be signed electronically rather than the traditional paper-based method. With global digital transformation accelerating across all industries, e-signatures have become a vital technology for enabling key business processes remotely while maintaining security and legal validity.

Purpose and Validity of E-Signatures

The core purpose of e-signatures is to provide the same legal standing for digital signatures as traditional paper documents with handwritten signatures. They indicate the consent and agreement of parties to legally binding contracts and documents. The main pieces of legislation which have enabled the validity of e-signatures in the United States are the Electronic Signatures in Global and National Commerce Act (ESIGN) at the federal level and the Uniform Electronic Transactions Act (UETA) at the state level. These laws establish that:

• E-signatures cannot be denied legal effect solely due to their digital format.

• In most cases, electronic contracts and records should not be invalidated or considered unenforceable if they contain an e-signature.

• E-signatures generally carry the same weight and legal effect as traditional wet ink signatures.

This legal framework provides the basis for the validity of e-signatures, allowing almost any process that indicates agreement to replace a handwritten signature. When implemented appropriately, they enable fully digital and paperless transactions across a huge range of business and governmental processes.

Types of E-Signature Solutions

There are various e-signature technologies which can legally bind signatories to documents and agreements:

1. Simple Electronic Signature (SES)

   • Includes any electronic symbol, process, or sound attached to or associated with a document

   • Examples: typed name, scanned handwritten signature, or a digital representation of a signature

2. Basic Electronic Signature (BES)

   • Requires a higher level of assurance than SES

   • Uniquely linked to the signatory and capable of identifying the signatory

   • Created using means under the signatory’s sole control

   • Linked to the document in a way that detects subsequent changes

3. Advanced Electronic Signature (AES)

   • Provides a higher level of assurance and security than BES

   • Created using a secure signature creation device

   • Based on a qualified certificate for electronic signatures

   • Cryptographic algorithms ensure the integrity and authenticity of the signed document

4. Qualified Electronic Signature (QES)

   • Provides the highest level of assurance and security

   • Created using a qualified electronic signature creation device (QSCD)

   • Based on a qualified certificate for electronic signatures issued by a qualified trust service provider

   • Equivalent to a handwritten signature and legally admissible in court

5. Digital Signature

   • A type of electronic signature that uses public-key cryptography

   • Signatory uses a private key to create the signature, and recipients use the corresponding public key to verify it

   • Ensures integrity, authentication, and non-repudiation of the signed document

6. Biometric Signature

   • Uses biometric data, such as fingerprints, facial recognition, or iris scans, to create a unique signature

   • Requires specialized hardware to capture and process biometric data

   • Offers a high level of security and assurance

7. Clickwrap Signature

   • Signatory agrees to terms and conditions by clicking an “I Agree” or similar button

   • Commonly used in online transactions and software installations

   • Provides a record of the signatory’s acceptance of the agreement

Comparing E-Signatures and Digital Signatures

While electronic signatures and digital signatures are closely related technologies, they have some distinct differences:

• E-signatures refer to any electronic approval process, whereas digital signatures use encryption and biometrics for enhanced security.

• Standard e-signatures apply to basic agreements and contracts. Digital signatures apply for documents and transactions requiring the highest level of authentication, non-repudiation and integrity.

• E-signatures provide a legal equivalent for handwritten signatures. Digital signatures also comply with the most stringent global standards for digital security.

In essence, all digital signatures qualify as e-signatures, but only some e-signatures have the sophistication to be termed digital signatures. For routine documents and basic agreements, appropriately implemented e-signatures are legally valid and enforceable while bringing immense convenience and efficiency benefits. To learn more about the distinctions, read our Digital Signature vs Electronic Signatures article.