A Primer on Electronic Signatures: Everything You Need to Get Started

Electronic signatures are a digital version of a normal “wet” signature, and in most regions carry with them a legal authority to sign standard contracts.

Ever since the E-SIGN Act (Electronic Signatures in Global and National Commerce Act) was passed in 2000, electronic signature adoption has been on the rise. Currently, the prevalence of at-home work due to COVID-19 has further reinforced the importance of online document-signing workflows versus the wet signature.

The Complete Guide to Electronic Signature Laws around the World


The electronic-signature market is predicted to increase by 24.6% in the next 10 years, from $951 million in revenue in 2019. And with the digital transaction management (DTM) industry poised to grow into a $10.5 billion market by 2026, electronic signatures are well on their way to achieving mainstream adoption.

Despite how widely adopted electronic signatures have become, consumer awareness remains limited.


Electronic Signature Definition and Common Laws

According to the ESIGN Act, electronic signatures (or eSignatures) are an “electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.”

In other words, an eSignature is a digitized version of your handwritten signature, and it bears many of the same legal implications (depending on regional laws). It can be used to approve or accept the contents of a document.

What makes electronic signatures popular?

Arguably the greatest eSignature advantage is its ease. Users can sign documents online with the click of a mouse, or they can trace their handwritten signature using a finger or a stylus. In addition, eSignatures allow businesses and individuals to process paperwork exponentially faster, eliminating the need for snail mail, printing, scanning, and hard-copy filing.

Following the arrival of COVID-19, social distancing measures, and the mass shift to working from home, eSignatures began skyrocketing in popularity. Businesses still needed to maintain their operations, but in the absence of office equipment such as scanners and printers, they quickly realized that an eSignature solution was the way to go.

Between March 16 and April 16, 2020, SignEasy experienced a 2.4x increase in paid subscriptions compared to recent months, among many other upward trends in usage across the globe.


  Sign up for our free trial to experience the easiest way to eSign your documents.


How can you tell if an electronic signature is legal?

It’s a complicated question because eSignature laws change from country to country. However, most legally recognized eSignatures have a few things in common.

First, an electronic signature must be connected to the contract, letter, or document in question. There must be a way, baked into the electronic signature, to tell if the text of the document has been changed in any way after it was signed. From there, the eSignature must be able to invalidate any signature written on a document that has been changed after the fact.

The signature must also, in some way, be linked to the person signing it — a name, a symbol, or a mark that uniquely identifies the signer.

Finally, the signatories must be able to retain a key unique to their signature in order to prove that they are the person who actually signed the document.

If all of these conditions are met, there’s a good chance the eSignature is legally binding in most regions.



What laws apply to electronic Signatures around the world?

While we’ve covered the U.S.’s ESIGN act, not all eSignature laws are the same. Here are a few of the more prominent laws regarding electronic signatures around the world:

India’s IT Act also states that digital signatures — not eSignatures — are legally equal to handwritten signatures. A digital signature is like an electronic signature but with a few important differences.


How Are Digital Signatures Different from Electronic Signatures?

A digital signature is a category of electronic signature that leverages algorithms and cryptography to prove the integrity and origin of each signature. It’s impossible to dispute who created the original document, and whether the signatures are valid

When a user signs a document online, they use the private key to create a signature. That is, during the signing process, a unique crypto-code ID is embedded in the document. At the time of verification, the signer simply uses his/her key to unwrap the digital signature code and compare it with the document to ensure a match.

For an overview of the comparison between these two signatures, see the table below.

Electronic SignaturesDigital Signatures
Use a wide array of methods – including email, employee ID, or phone verification – to authenticate signer identityLeverage certificate-based IDs to authenticate signer identity
Leverage an audit trail to demonstrate the validity and legality of a signed documentBind each signature to the document via encryption to demonstrate the validity and legality of a signed document
Easy to incorporate into existing processes and workflowsA little more complicated to understand and implement
Used for verifying document authenticityUsed for securing document integrity
Equivalent to a wet ink signatureNot the same as a wet ink signature.


Now that you know the difference between electronic and digital signatures, you will be able to make an informed decision about the kind of electronic-signature software that best suits your business.

Get on board with eSignatures today and boost your productivity by signing up for our free trial!

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