The Ultimate Guide to Electronic Signatures
The multi-day process of signing and sending ink-to-paper signatures used to be a major road bump in the contract management process. No more. Today, procuring a court-admissible signature takes a few seconds—and can be done remotely, from a computer or mobile device. In addition to streamlining administrative procedures, electronic signatures—or e-signatures—offer businesses an elegant way to reduce risks, save resources and build a better customer experience. From understanding how they work to evaluating the legal and procedural benefits they provide, here is everything you need to know about electronic signatures.
What are the benefits of electronic signatures?
As the business world continues its transition to a paperless, digital environment, electronic signatures are quickly becoming a business necessity. But, are they really a legitimate replacement for traditional signatures? In a word, yes. Not only are electronic signatures widely recognised as statutorily valid, they also provide some key advantages that can improve your business’ operational efficiency overnight. Here are a few benefits to implementing electronic signatures:
- Increased flexibility: from your smartphone to your personal desktop, electronic signatures make it easy to conduct business on the go.
- Operational efficiency: streamline contract execution and increase employee productivity by fully automating your document workflow.
- Risk reduction: avoid human error and ensure your signers are who they say they are with advanced methods of digital authentication
- Reduced operational costs: bring your paper trail online to save money on physical supplies (paper, postage, etc.) and stop wasting business resources and time on tedious administrative tasks.
- Improved UX: foster stronger client relationships by providing a simple, easy-to-use document management experience for your clients.
How do electronic signatures work?
The inherent simplicity of electronic signatures makes it easy to dismiss them as merely a 21st-century substitute for ink-to-paper signatures. In fact, electronic signatures are far more advanced than they appear.
Electronic signatures are full SaaS solutions that authenticate, track and store signatures and signer information at every stage of the contract lifecycle. Just like handwritten signatures, e-signatures are unique to each signer. However, while witness testimony and handwriting are the only way to guarantee the validity of a traditional signature, e-signatures offer added layers of authentication.
Every electronic signature has a specific Public Key Infrastructure (PKI), which appears as a unique sequence of encrypted numbers—one public and one private. The encrypted data offers a record of the date and time that signing took place and holds information about the signer's IP address.
Are electronic signatures legally binding?
In Australia, the Electronic Transactions Act 1999 (Cth) states that electronic signatures are acceptable whenever a signature is required by law, with the exception of migration and citizenship documents, bills of exchange, wills, power of attorney, and some real estate transactions.
DocuSign’s eSignature solution meets the requirements for a valid electronic signature under section 10 of the Electronic Transactions Act.
It’s legal around the world, too. In the United States, our solution complies with the definition of an electronic signature under the Electronic Signatures in Global and National Commerce (ESIGN) Act and the Uniform Electronic Transactions Act (UETA). In the United Kingdom, the equivalent legislation to the ESIGN Act is the Electronic Communications Act 2000, which our solution also complies with. The same goes across the EU, with our eSignatures compliant with eIDAS and EU electronic signature technical standards.
Many other countries have adopted an electronic signature law or recognise electronic signatures, and DocuSign proudly meets the definition of a valid electronic signature under the vast majority of those laws. If in doubt, chat to us or a legal representative in the country you’re dealing with.
Who Uses Electronic Signatures?
With remote work steadily taking over the business world, signing documents from afar is now more than just an efficient use of time: it’s a requirement. Luckily, businesses in nearly every sector can benefit from the use of e-signatures and contract lifecycle automation. A few key business functions and industries where electronic signatures are frequently used include:
- real estate transactions
- sales contracts
- HR/employee onboarding
- government services/applications
- financial services
- intellectual property licensing
- non-disclosure agreements
- age verification
Take the First Step Toward Contract Management Efficiency
Electronic signatures offer businesses an easy way to save money, manage risks and increase productivity—all of which will accelerate growth and drive revenue. If you’re ready to take a step toward a brighter future in contract management and want to learn more about how electronic signatures work, learn more from our team of contract management experts.
Try DocuSign eSignature yourself - sign up for a free trial today.