How the ESIGN Act Impacts Collecting Legally-Binding Signatures

Finding the time to print, send, and receive a document simply to collect a signature from a client is a huge use of resources that, given today’s eSignature technology, is frankly unnecessary.

Switching to eSignature software can be a bit of a leap of faith, however. How can you be sure that the signature you collect is legally-binding? The ESIGN Act.

WHAT IS THE ESIGN ACT?

Let’s get down to brass tacks. If you send a client a document for eSignature, is it a legally binding signature? In short, yes. However, it’s important to know why, and the exceptions that can lead to a situation where this isn’t true.

The Electronic Signatures in Global and National Commerce (ESIGN) Act provides the legal framework that makes collecting signatures over a digital medium legally-binding for businesses and private citizens alike.

According to the ESIGN Act, there are four requirements an eSignature must meet in order to be legally-binding:

1. Intent to sign - Just like a traditional signature, an electronic signature is only valid if each party intended to sign.
2. Consent to do business electronically - Each party signing the document must consent to doing business electronically. This requirement is more strict when requesting the signature of a customer or private citizen than when compared to a business.
3. Association of signature with record - In order for an eSignature to be considered valid by the ESIGN Act, the recipient of the signature must maintain a record that shows how the signature was collected, proving that the electronic signature was legitimate.
4. Record retention - A record of the electronic signature must be kept by the receiving party, and the record must be accessible by both the signer and recipient.

As long as the eSignature platform you use provides you with the ability to satisfy these requirements, any signature you collect using an electronic method is legally-binding in the United States. If you are conducting business with a company or organization that is outside of the United States, consult this document for a detailed breakdown of eSignature laws.

WHICH ESIGNATURE SOFTWARE WORKS WITH THE ESIGN ACT?

Luckily, pretty much every eSignature platform you’ve heard of meets the requirements set out by the ESIGN Act. Below, you can find a list of solutions that will provide you with legally-binding eSignatures:

• DocuSign
• PandaDoc
• HelloSign
• FoxIT
• AdobeAcrobat Sign
• EverSign

Essentially, if your software asks for permission to collect signatures digitally, and gives you the ability to reference and review signature records, your software will meet the requirements set by the ESIGN Act for what counts as a legally-binding signature.

If you have any questions about eSignature software, or any form of digital solutions to better reach and serve your clients, reach out to us here.