Electronic signatures are valid in almost all situations. And if you want to make your business (or law firm) run as efficiently as possible, you should use them.
In this post we’ll talk about about whether electronic signatures are legal, the benefits to using them, and how you can get started using them today.
The Electronic Signatures in Global and National Commerce Act
The ESIGN Act was signed into law in 2000 (additionally most states have adopted some form of the Uniform Electronic Transactions Act (UETA)).
In general, these laws provide that:
“(1) a signature… may not be denied legal effect, validity, or enforceability solely because it is in electronic form; and
(2) a contract… may not be denied legal effect, validity, or enforceability solely because an electronic signature or electronic record was used in its formation.”
That’s pretty awesome, right?
Of course, it isn’t that simple and to be effective, you must meet certain requirements. Specifically, signatures are only binding if the signing party (a) intended to sign the contract; and (b) consents to do business electronically. Further, the electronic signature platform must save and retain the contract itself and an associated record that reflects the process under which the signature was obtained.
And since this is the “law,” there are exceptions. Most notably, if a separate statute requires physical signatures for wills, trusts, and related family law contracts, then an electronic signature may not be valid. Additionally, there are very specific exemptions listed in the ESIGN Act and the UETA.
Benefits for Your Startup or Freelance Business
Say goodbye to paper, pens, mail couriers, fax machines, scanners, and email attachments!!!
Using an electronic signature platform allows you to efficiently and quickly circulate final drafts for review and signature. Once signed, everyone involved gets a copy of the fully e-signed contract and access to the platform where they can download the contract later.
The electronic signature platform also captures an audit trail of the signatures – court admissible advice regarding when, where, and how a signing party signed the contract. The parties will all have access to this audit trail too.
Last, it is free for the recipients. The only people that have to pay are the businesses creating the contracts for e-signature. But even then, it is as inexpensive as $25 per month for a single user.
How to Implement Electronic Signatures in Your Small Business
This part is easy. Just sign up for an electronic signature platform like HelloSign or DocuSign. We use DocuSign and are very happy with their service (if you sign up using our referral link, both you and us will benefit).
The biggest benefit to using a platform like DocuSign is that they handle all the legal requirements such as obtaining consent from the parties and creating and maintaining the contract itself and the audit trail.
So, to summarize this post, if you are not using electronic signatures for your business, you are doing it wrong! : )
*This article is very general in nature and does not constitute legal advice.