A Guide to eSignature Requirements

10 minute read

As the world continues to go digital, so do contract signature processes. Gone are the days when teams had to route physical documents for signatures, which creates inefficiencies and slows down workflows. In turn, these time-consuming activities can hold up important business transactions and deals.

Integrating eSignatures helps you streamline contract execution. Electronic signatures are legally enforceable and eliminate long wait times to get business relationships off the ground. They are just as valid as a hand-written signature but in an electronic format. And you can use eSignatures for a range of electronic documents, whether business contracts, services agreements, nondisclosure agreements, or any other electronic contract you may need.

Improve the way you get contracts finalized by using more advanced electronic tools. This guide provides everything you need to know about how eSignatures work and how to meet technical and legal eSignature requirements.

How eSignatures Work

For your team to finalize legal contracts and documents, signatures are a key requirement. They show that all applicable parties approve the terms of the document and agree to their rights and responsibilities as detailed. 

Traditionally, contracts have been signed by hand on a physical document, a process known as providing a wet signature — with pen and paper. Often, two or more copies of each contract were needed so each party would have one, and then they were stored in a filing cabinet or other physical space.

However, digital tools have created an entirely different process. An electronic signature, or eSignature, allows the parties to review a digital document on a connected device and provide their approval and signature electronically. These tools provide enhanced authentication methods to ensure someone’s identity, including a PIN, password, or multi-factor authentication process. 

With an eSignature solution, these steps are all it takes to execute a contract:

  1. Upload the final draft into a software program.
  2. Enter the names and email addresses of the signatories.
  3. Add comments or flag applicable sections that need attention.
  4. Route the document for signature in moments, using a precise order of recipients.
  5. Obtain signatures from each person with a few clicks.
  6. Save and store the agreement in a protected online format.
  7. Ensure each signatory and involved party gets a copy of the finalized contract.
  8. Keep accurate, robust records with time stamps and audit trails.

The eSignature process eliminates unnecessary physical paperwork and speeds up document workflows. This contributes to an overall more efficient business.

The Legal Framework Governing eSignatures

Certain regulations govern the electronic signature process. In particular, the Electronic Signatures in Global and National Commerce Act (E-Sign Act) was enacted back in 2000 and outlines how businesses can ensure legitimacy with online signature solutions.

This act allows electronic records and signatures to be considered legally valid and meet applicable laws and regulations regarding in-writing information and transactions. An electronic signature is defined by the E-Sign Act as any “sound, symbol, or process” on a contract or record used by the person with the intent of signing the document.

In practice, the eSignature process typically relies on some kind of platform or software that certifies the signatures and creates a finalized document. For your business to guarantee legal recognition and accuracy, this executed contract cannot be altered without the consent of the signatories.

Types of eSignatures

In the realm of digital signatures, there are a few terms you may come across that seem similar. Online signature, electronic signature, eSignature, and digital signature are often used interchangeably. However, these terms can have different meanings and implications. Understanding them will help you certify your process and integrate the right signature platform for your needs.

Simple Online Signatures

An online signature is the most basic term and essentially refers to anything that replaces a handwritten signature. This is often the simplest method of signing. It could be appropriate for certain types of documents, but it isn’t always as strong or enforceable as more advanced methods available today.

Advanced and Qualified eSignatures

With enhanced technology, more robust signature protection systems are in place. These can provide your business with more legal protections, ensuring an agreement or document will hold up in court should a dispute arise. 

Here are a few types of more qualified signatures to know:

Electronic Signature or eSignature

An eSignature, or electronic signature, is a bit different than a simple online signature. To qualify as such, the signature must meet technical and legal regulations as outlined in the E-Sign Act. eSignatures verify the signatory’s identification and certify that they agree to all the terms in the contract.

Digital Signature

Digital signatures go even further. These provide a higher level of security, relying on encryption and more robust verification techniques, such as the signatory uploading a photo of their ID card. Digital certificates issued with this method allow the document to have more protection from alteration, and the signatures have even more legal validity in case there is a breach of contract. 

Biometric Signature

Finally, something called a biometric signature is becoming more common. With this method, you verify your identity with biometric data, such as voice or retina recognition or fingerprinting. This could also include a scanned image of a handwritten signature.

H2 Legal Requirements for eSignatures

Under the E-Sign Act and the Uniform Electronic Transactions Act (UETA), which was passed one year before the E-Sign Act in 1999, there are a few additional requirements that must be present for valid eSignatures. Understanding these eSignature requirements will make certain you’re always creating enforceable and protected signed documents. Here are the six important legal terms to follow:

Intent to Sign

When you sign a contract, it must be clear that you had an intention to do so. Intent to sign is signified by providing your digital signature or other digital indication of acceptance.

Consent to Sign Electronically

When eSignatures are used, the parties must show they consent to this format. They must agree to conduct business electronically for an online contract to be valid and complete.

Signature Attribution

This requirement means that the signatory must be able to show that the eSignature is directly attributed to them and no one else. Using a platform is a good way to check this requirement off your list since software can authenticate your signature.

Record Retention and Accessibility

An online contract, once signed, must have the ability to be retained, reproduced, and accessed as necessary by the parties. This means a detailed audit trail must be kept regarding signature details. You always want the most accurate records to meet both technical and legal requirements.

Data Integrity and Security

Further measures such as encryption help the contract and signatures stay protected. Here comes the digital certificate. When a digital certificate owner signs a document, they use a private key infrastructure, and their information then becomes encrypted. Unauthorized users are thus prevented from accessing this data.

Blockchain technology can play an important role in eSignatures. Blockchain is a type of digital log that stores and protects data. It ensures that records requirements are met and contracts cannot be altered once they’re finalized. Transactions like Bitcoin commonly use blockchain technology, but it can also be key in the online document signature process to increase integrity. 

Compliance With the ESIGN Act and UETA

Any electronic signature tool you use needs to follow both the E-Sign Act and UETA to ensure it is legally enforceable and protected. This means your solution must:

  • Authenticate and identify the signatory
  • Provide completed copies of the records
  • Protect the signed documents effectively once signed
  • Prevent unauthorized access
  • Use time stamps and other audit trails

A common best practice is to use a solution that provides all of these requirements for you while making the signature process quick and easy.

Technical Requirements for eSignatures

You need a solution that will be compatible with your workflows and integrate seamlessly within your business to enable an efficient eSignature process. Breaking down your specific needs and software priorities will help you find a match. Additionally, consider these key factors when looking at technical requirements for your eSign process:

Platform Compatibility

You have options when it comes to eSignature platforms to handle your digital transactions. The first point to consider is compatibility. Think through these questions:

  • What solutions do you currently use within your business?
  • Is the software compatible with your existing tools and systems?
  • Will you need to change service providers for any other workflows?
  • What do previous users say about the platform?
  • What support does the platform provide?
  • Can you book a demo before calling?

Also, verify that your current processes include all necessary technological requirements for the new platform. You want each of your systems to be compatible with one another so there are no gaps in your workflows.

Integration With Contract Workflows

Your business likely already has a process for contract signatures. You may be upgrading to a digital-only process or changing the platform you use to sign. Electronic signature solutions are important tools to implement when digitally transforming your business.

Whatever your goals are, make sure the signature platform you choose aligns with these goals. It should integrate seamlessly with your policies and procedures so that time isn’t lost and there isn’t a big learning curve for staff. 

For example, you may already have a routing order when sending contracts for approval and signature. The new platform shouldn’t change that order or process — it should just make it faster and more convenient for those involved.

Assess how each tool will be incorporated into your workflows. Make certain you find an option that doesn’t make the process even more cumbersome. Always provide training opportunities or learning materials to applicable internal parties so they know what is changing and what the new workflow will look like.

Audit Trail and Logging

Part of an improved digital signature process is ensuring you keep adequate records. Carefully evaluate how the tool logs pertinent information. Does it use time stamps effectively? What is the process for pulling reports and viewing document history? Are these features easy to access and use?

Consider using a solution that incorporates blockchain technology to guarantee documents and records cannot be modified. Authorized users should be able to access audit trails and verify data safety.

Digital solutions can help you improve your recordkeeping practices. Platforms can strengthen accessibility, security, and organizational measures to make the contract process exponentially more efficient. Just make sure the tool you choose will provide these benefits for your team.

API Integration

Understanding how a solution will integrate into application programming interfaces (APIs) is important when looking for the right eSignature solution. APIs help your processes flow efficiently, ensuring different systems can communicate and transfer data. They help you avoid excessive or redundant data entry and use automation tools to improve workflows.

Look for an electronic signature platform that integrates seamlessly with APIs so your platforms can continue to communicate successfully. This enables you to increase data accuracy, foster productivity, and streamline once cumbersome processes.

Try eSigning in the Cloud Today

Cloud technology has made these integrations that much easier. Consider a cloud solution for electronic records and eSignatures that protects your documents, improves signature workflows, and integrates seamlessly with your existing tools and systems. These tools can also make certain you maintain legal standing with all applicable requirements met for your contracts and documents.

jSign from Consensus offers it all. With the help of blockchain technology, auto form-fill, and cloud-based solutions, jSign ensures you meet all eSignature requirements, both legal and technical. 

The platform helps you sign and authenticate official documents and records with just a few clicks, which speeds up your contract workflows from start to finish. The experts behind jSign offer customized plans to meet the eSignature needs of your unique organization.

Revamp your electronic signature process. Contact Consensus to request a jSign demo today.