Are digital signatures legal?

Are digital signatures legal?

It is impossible to know how many contracts and agreements are signed each day. There are countless reasons to sign a document. Examples include employee contracts, rental agreements, purchase agreements, confidentiality agreements, non-disclosure forms - the list goes on! For years, it’s been the norm for such important documents to be signed and witnessed using pen and paper so it can be legally binding. These days, 97% of Americans own a cell phone, and we are in the paperless age. You may be asking are digital signatures legal? Read on for all the answers. 

Why are signed documents necessary?

Strictly speaking, signed documents are not necessary because verbal agreements are legally binding in the United States and Canada. This means that if someone offers to rent an apartment for $1000 a month and you agree, they can’t then ask for more money. Of, if you agreed during the job interview that you would work Monday to Friday from 9am until 4pm, your boss can’t later demand that you work weekends. So why are signed documents necessary? Mainly because short term memory is unreliable, and biases can lead both parties to remember things differently.

The clarity of signed documents means that months and years in the future, both sides can review what was agreed to. This saves time, energy, stress - and costly legal action! Risk management is important for businesses, non-profits, and individuals. Making sure all agreements are documented and signed is very important to protect against costly misunderstandings and conflict.

What are digital signatures?

Digital signatures are the online version of the old-school paper and pen. There are different formats for digital signatures. It can be drawn by hand using a tablet or pad. A handwritten signature on paper can be scanned and inserted as a JPG file into a document. Or, a e-signature field can be created. Individuals can then simply type in their name and submit. This is the easiest and fastest way to get a digital signature on a contract or agreement.

Are digital signatures legal?

Getting an online form signed is easy. The question is, is it legally binding? The good news is that yes, it is. Both the United States and Canada have passed laws which make digital signatures legal. The US government has the e-Sign Act - officially the Electronic Signatures in Global and National Commerce Act (E-Sign Act). This legislation validates the use of electronic signatures and records to satisfy any statute, regulation, or rule of law requiring that such information be provided in writing, if an individual has consented to such use and has not withdrawn such consent. In Canada, the federal government passed the "The Personal Information Protection and Electronic Documents Act."

Basically, these laws mean that electronic signatures are 100% valid and can’t be rejected because it was done online. This is great news for businesses, non-profits, and individuals who want a safe and efficient way to document agreements and contracts. 

Reasons to use Electronic Signatures

There are many reasons to go paperless and start using digital signatures. It saves time, money, space, and provides a highly personal and customized experience for customers and employees. It’s also more secure than emailing documents. Choose an online form builder that uses the same level of encryption as banks, and rest easy knowing that sensitive, confidential material is safe. Knowing that digital signatures are legally binding is just one more reason to switch processes and documents to online forms.

Now you understand why digital signatures are legally binding. There are lots of online form builders available, and Paperless Forms is designed to be very easy to use, while having all the quality and flexibility your business needs. It’s easy to get started with a free trial, so get started today. Have questions? We have real humans available to answer them. Just reach out and connect, and one of our team will respond.