We like simple solutions to complex issues and electronic signatures certainly speeds things up.
HOW TO USE ELECTRONIC SIGNATURES IN YOUR LEGAL DOCUMENTS
What is an electronic signature?
Previously all legal documents were signed by signatory (a person who had to sign that document) using a pen. Usually, all the signatories were in the same place at the same time for the official signing.
An electronic signature is a way to sign documents using an electronic method, without having to do it the old fashioned way.
There are many types of electronic signature including:
- printing out a copy of the document, signing it with a pen, scanning the signed document and emailing it to the recipient/others involved
- using a stylus or touch screen to “sign” your name
- using a tick box system – ticking a box which says you agree with the document
- pasting your signature (an electronic representation of your handwritten signature) on a document
- accessing the document through online software and clicking insert the signatory’s name
- advanced methods provided by specialist software
- using digital representation of characteristics like fingerprints
Why use an electronic signature in a legal document?
Previously, the signing took place by people being present in the same office/location. However, realistically it is not always possible for this to happen so a more modern approach has been developed to fit the needs of today’s business.
Which method is best?
It depends on how you define “best”.
Of course, the more complex the method, the more security. So, for example, there are advanced electronic signatures which are uniquely linked to the signatory, can identify the signatory and detect any changes in the signature.
So if you are dealing with a very high value agreement, you may wish to look for this type of added security but, for a low value agreement, a scanned copy of the page with someone’s signature will be sufficient. If security is a concern you can go one step further and ask to verify the signature against an official government documents (such as a driving licence). However, if you do this, please bear in mind the Data Protection issues regarding the information you collect and store.
Therefore, for most people the best option is online electronic signature software and there are a range of options to suit most budgets and needs including:
Adobe Sign – https://adobe.ly/2ib1Xaw
Do I need a clause in the document which says I am using electronic signatures?
Your document should contain a clause so that everybody is clear about the process. The clause will usually make sure that
- you can sign the document electronically and it will be a valid document and
- the document will not be effective (i.e. valid and enforceable) until everybody has signed at least one copy of the document
This means that each person only needs to sign one copy of the document for it to be effective. However, it always makes good business practice for everybody to eventually have their own copy of the document that is signed by all parties for their own records.
Can I use electronic signature on ALL legal documents?
Electronic signatures are perfectly acceptable for most documents. However, if your document doesn’t contain a clause about electronic signature or you are not quite sure please take legal advice before you sign.
How does electronic signing work?
This depends on the method that you use.
(1) If you are relying on scanned copies and assuming that your document has a clause about electronic signatures (see above) the following makes sense:
- one signatory signs the document first (it doesn’t matter who signs first because the document is not binding until everybody has signed at least one copy of the document)
- the signed document goes back to the other signatories who will then sign it
- once all signatories have signed at least one copy of the document it is effective and binding
- each signatory eventually receives a copy of the document which has been signed by all signatories
(2) If you are using online electronic signature software (see above) then you should follow the requirements of that system.
Sometimes the software provides a clause about electronic signatures (see above) but to give yourself peace of mind
- check that the document you are signing has a clause about electronic signatures
- if the document you are signing does not have a clause about electronic signatures then buy and insert one
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