People get naturally paranoid about contracts.
It’s a question we get often: how can I be sure an eSignature will be fully enforceable and won’t leave me stressed out if someone wants to challenge our agreement in court? Is this good enough? What about all those old-time lawyers that made everyone sign everything in blue ink?
Well, luckily for you, state and federal legislatures have codified exactly what you need in an eSignature — and federal courts have added additional guidance in recent years. No, you don’t need that old-timey blue-ink signature any more to make a document fully enforceable — an eSignature will be fine, as long as you’re doing it properly.
Here’s five things to make sure you’re doing so you don’t have to worry about your agreement’s enforceability in court.
Make it very clear that someone will be signing a legal agreement electronically.
For an eSignature to be binding, a signer must actually intend to sign the contract electronically. This may seem like an obvious point, but it can get tricky if you are trying to create an eSignature for an ecommerce checkout flow.
Keep electronic records and provide them to all signers.
You need to keep a record of any contract that is electronically signed, including the date, the method used to apply the signature, any authentication measures used, and an audit trail. Everyone signing the contract should get a copy of this electronic record.
Make sure you can prove who signed the agreement.
Signer authentication methods can include email, secure links, unique signer codes, and multifactor authentication (e.g. codes sent via SMS).
You don’t need a squiggly black line that looks like an ink signature — unless it just makes you feel better.
The E-Sign Act in defines “electronic signature” as “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.” There is no requirement by E-SIGN or UETA that an eSignature look like a pen-to-paper signature. In fact, a federal court in 2013 determined that a clickwrap signature DID in fact meet the requirements set forth in E-SIGN to be legally binding.