Though the ESIGN act was passed more than a decade ago (in 2000) making electronic signatures legally enforceable, many don’t know exactly what an electronic or “e-signature” is or how it can be used, (nor do they know it has it’s own national holiday right around the corner).
An electronic signature is any sound, symbol or process that is electronically associated with a contract or record that is adopted by the signer, indicating his or her intent to sign, as defined by the ESIGN act. Accordingly, electronic signatures can be verbal authorizations, electronically signed authorizations, or even the simple click of a checkbox. But let’s just get to the crux of the matter – the important components of an electronic signature are threefold:
1. The signer is who he or she says (varied methods of attribution based on the needs of the business, however, none are legally required by US law),
2. The signer’s intent to sign is captured (the method and purpose are clear the signer intends to sign) and
3. The document or record is verifiable. (this boils down to process; how was the document signed, what did the signer do, and how do you prove what is represented electronically is actually what happened)
Let’s go through an example of how this works in practice. AssureSign client, Rhodes Retail Services, Inc., requires a paperless employee on-boarding process, because many of their hires are virtual and scattered all throughout the U.S. As such, Rhodes Retail Services uses email and password authentication, allowing new hires to virtually sign and submit the documentation to headquarters, taking only a matter of minutes. The signer’s intent is made clear through browser-based AssureSign signing process. Since Rhodes Retail started using electronic signatures, the company has been able to reduce their on-boarding process from seven days to two. Additional perks of e-signatures include copies distributed to all parties and document audit trails.
One final item of note before we sign off (pun intended): Electronic signature is not the same as a digital signature, even though many use the two terms interchangeably. Digital signatures embed a unique digital “fingerprint” into documents and the signer is required to possess a certificate-based digital ID in order to link the signer and document. As such, digital signatures are often impractical to execute due to the advanced technology requirements of the signer. AssureSign electronic signatures, meanwhile, comply with the eSign Act of 2000 and the Uniform Electronic Transactions Act (UETA) making them extremely secure and legally enforceable, but also much more practical as signers can quickly execute agreements from the office, home or a mobile device without high tech requirements.
Speed, efficiency, verifiability and customer experience are just a few reasons why entire industries have made the switch. Click to learn how these top industries are winning with electronic signatures!
Editor’s Note: This post was originally published in August 2015 and has been updated for freshness, accuracy, and comprehensiveness.