Are Digital Signatures Legally Binding?

Written by Heather Mueller on September 4, 2014

Posted in Form Hacks

The short answer is “yes,” although many people still don’t fully understand how to use digital signatures correctly and some remain leery of them. Despite that, ink is being replaced with digital versions of the classic autograph on everything from latté receipts to legal contracts.

While Formstack is not able to provide legal advice (you’ll need to consult with your own attorney for that), we can help break down the basics of electronic signatures and how they’re viewed by the American legal system. For a quick primer, keep reading.

First, What Is an Electronic Signature?
Attorney-at-Law Kenan L. Farrell addressed this question in another post, where he offered this definition:

An electronic signature is any legally recognized electronic means that indicates a person adopts the contents of an electronic message. 

There are a variety of ways to collect legally legit electronic signatures and consents in your Formstack forms, from adding “I agree” checkboxes to enabling touchscreen eSignatures. For more details on how the legal system handles these types of signatures, we highly recommend reading Farrell’s full guest post.

In fact, go ahead and read it now. We’ll wait.

Done? Great! As described in that post, electronic signatures function just like their pen-and-paper counterparts, indicating the signer agrees to adopt all intentions recorded in a document.

Laws Governing Electronic Signatures
Since 2000, electronic signatures have been governed by the Electronic Signatures in Global and National Commerce (E-Sign) Act. This federal law stipulates that no “signature, contract or other record” can be denied or unenforced simply because a signature is in electronic form. At the state level, the Uniform Electronic Transactions Act (UETA) provides similar protection to digital signatures and records.

Limitations of Electronic Signatures
In most cases, an electronic signature is just as legally binding (if not more so) than traditional pen-and-paper agreements. There are some instances—wills and trusts, for instance—where electronic signatures may not be binding. In these cases, your state’s adoption of UETA will likely come into play, so check with your attorney when dealing with documents that are sensitive in nature or likely to be reviewed in court.

The good news? Formstack tools make it easy to collect most of the signatures you’ll need on a day-to-day basis.

Best Practices When Collecting Electronic Signatures
If you’ve been using Formstack for awhile, you know how easy it is to collect and store signatures electronically. Here are a few do’s and don’ts to keep in mind when building agreements and signature options into your forms:

  • Don’t: Allow users to upload their own pictures of signatures. Although they can be proven legal, it’s the least bulletproof form of signature.
  • Instead, Do: Add a Formstack signature field users can more legitimately “sign” using a mouse or touchscreen.
  • Don’t: Assume people are reading every word of your privacy policy, terms of agreement and other important statements.
  • Instead, Do: Use checkboxes. While you don’t want to overwhelm people with too many fields, it’s a good idea to validate that the people filling out your forms understand what they’re signing. Checkboxes make that easy.

Looking for more tips?
Get the guide to learn about all the ways you can easily gather legally binding electronic signatures using Formstack. (Not a Formstack user? Sign up for your free trial below.)