An electronic signature is a legally binding signature that happens to have been executed, well, electronically. They are digital representations showing a person’s consent or agreement to a document or transaction.

For example, manual course registration for students makes it so hard to get a document stamped or processed for signing. Each student would have to go from one department to another, and sometimes across different campuses to ensure all documents were complete before the start of the semester. However, with e-signatures, you don’t have to through endless paperwork—printing, copying, and processing to get signatures, students can simply collect signatures digitally and complete their registration.

When to Use e-Signatures

Almost any document can be legally signed electronically, as long as the e-signature method used complies with the relevant laws and regulations. Here are some examples of commonly e-signed documents 

• Contracts (employment, sales, NDAs, etc.), 
• Financial documents (loan agreements, account opening forms)
• Real estate documents (leases, purchase agreements)
• Insurance policies
• Medical forms
• Permission slips
• Tax documents (depending on country)

Legal Framework for E-signature Law

E-signature laws like UETA and eIDAS are the guardians of your electronic contracts and are commonly adopted across different countries. They ensure courts recognize e-signatures as legally binding, create a clear audit trail to prevent forgery, and protect you from unknowingly signing agreements. 

UETA, a model law adopted by most states, establishes that electronic signatures have the same legal effect as traditional signatures, requiring consent and proper record retention. The following are the criteria for e-signatures under UETA:

• Intent to sign:  Your e-signature is only valid if both parties intend to sign. For example, the tenant and landlord have agreed on the rent price prior and use the signature to finalize this agreement.
• Consent to conduct business electronically– both parties must agree to do business electronically. If one of the parties insists on doing business physically, you can’t bring up an e-signature as proof of agreement.
• Association of an electronic signature and electronic record– your electronic signature must be visible on the document and the system used to record the transaction must keep an associated record.
• Record retention– all parties must be able to access the signed document.

What Is the eIDAS?

Electronic Identification, Authentication, and Trust Services (eIDAS)  is the legal framework for ensuring electronic transactions are safer, faster, and more efficient across all EU countries. It covered agreements across different sectors including travel, B2B invoicing, government services, banking, etc.

This ensured that people doing business in the EU or working with people in the EU have a secure and legal means of collecting agreements. E-signature laws like UETA and ESIGN are the guardians of your electronic contracts. They ensure courts recognize e-signatures as legally binding, create a clear audit trail to prevent forgery, and protect consumers from unknowingly signing agreements.

Similarly, countries outside of the EU and the US have their stipulated framework for e-signatures outside of UETA and eIDAS but they generally have similar criteria. However, the nuances are what differentiate the extent of e-signature validity in specific regions. Skipping these laws can lead to costly legal disputes, financial losses, and a damaged reputation. 

Common e-Signature Use Cases

Depending on your region, e-signature validity varies slightly depending on the purpose. However, e-signatures are generally accepted and just binding across most countries in these scenarios:

• Employment Contracts: Most interviews are conducted virtually even if the role is on-site. So, it’s only appropriate that employees can accept the offer digitally with e-signatures. However, you have to research the specific requirements for electronic employment agreements and ensure you comply with them.
• Sales Agreements: e-signatures are perfectly suitable for digital and offline sales agreements. For example, you can use them for purchasing product licenses, e-book purchases, invoices, car sales before pickup, etc. 
• Lease Agreements: Landlords and tenants can electronically sign documents like residential leases or commercial property rentals. In most cases, you could request a video inspection or go physically to inspect then look through the agreement terms and sign if you are satisfied.
• Non-Disclosure Agreements (NDAs): Confidentiality is a crucial aspect of NDAs, using e-signatures further strengthens this by securely backing up the agreement. 

Common Roadblocks to e-Signatures

While e-signatures are generally accepted as legal and valid as traditional signatures, there are some exceptions to this. So, here are some common factors to consider when using e-signatures:

• Local Laws: Always verify the exact set of laws in your region about e-signatures, and the type of agreements required for different contract types.
• Consent: Ensure that all the parties give explicit consent for e-signing the agreement. Electronic signatures are only valid when all parties agree to use them.
• E-signature Platform: Make use of a reputed platform that offers advanced features of security along with a crystal clear audit trail for proving the validity of the signature.
• Consent Forms: Whether it is consent to some form of marketing or consent to a certain type of treatment, e-signatures have indeed made the process of obtaining consent rather effortless and legitimate. 
• Purchase Orders (POs): Automate your procurement with electronic signatures. Whether a supplier or a buyer, e-signatures on POs speed up the approval process and reduce any possibility of delay.
• Tax Documents: Not all tax agencies allow e-signatures, although most of them do. But in some cases, you would have to confirm with your particular tax agency about their regulations on e-signatures.
• Permit Applications: Many government agencies now have electronic signatures for permit applications. However, you might need to traditionally sign for some business licenses, construction permits, environmental clearances, etc.

  Benefits of Using e-signatures

• Speed and Efficiency: Electronic signatures significantly reduce the time required to sign and process documents. There’s no need to print, sign, scan, and send documents back and forth.
• Security: Many electronic signature platforms use encryption and digital certificates to ensure the authenticity and integrity of the signed documents2.
• Cost Savings: Reducing the need for paper, printing, and postage can lead to substantial cost savings1.
• Accessibility: Documents can be signed from anywhere, at any time, using various devices, making it easier for all parties involved

How to Use Formplus e-signature tool as a Freelancer

Formplus allows you to collect, manage, and store data effectively. This includes agreements like writing contracts, lease agreements, property sales, employee contracts, NDAs, etc. It has an e-signature tool that allows you to collect signatures for your contract forms, application forms, registration forms, and other documents.

Why Formplus

• Informed Consent: You can also add your terms, conditions, and even a disclaimer at the bottom section of your form. This way the person signing has informed consent and your agreement is unarguably legally binding. 
• Secure Storage: Your agreement is securely backed up in your Formplus cloud storage, and you could integrate your preferred cloud storage e.g. Google Drive, Dropbox, etc as extra storage. You could also send a copy of the respondent copy to them, so they have their digital copy of the agreement.
• Privacy and Data Protection: You can create private forms that allow only specific persons view and respond to the form, this ensures the person signing the agreement is actually who you want to sign it. Formplus also adheres to strict privacy standards– we do not share personal information with external entities without user consent, except for legal purposes.
• End-to-end Encryption: Formplus uses end-to-end encryption to ensure your documents are tampered with when sending or receiving responses. No one can intercept the form or change its content except the person meant to see it.
• Compliance with Industry Standards: Formplus ensures that forms and data collection processes comply with relevant legal requirements and industry standards such as GDPR.

Wrapping Up

E-signatures are changing how we sign agreements. For example, you can easily use e-signtures to sign different types of agreements e.g contracts, lease, loan applications, etc rather than having to walk into an office.

However, there are some nuances to e-signtures validity; e-signature laws help you see these minor differences. E-signature laws helps you understand the legal recognition and protection you have when e-signing different types of agreements in different regions.