What Is an Electronic Signature?

An electronic signature is exactly what it sounds like: a signature that you can use electronically, either by inserting a preformatted signature into a document, or using a third-party tool that allows you to sign something from your computer.

So, instead of having to physically print, sign, and then scan (or otherwise reupload) a document that needs a signature, an electronic signature allows you to sign something digitally, without having to actually sign a hard copy.

Why Is It Important to Sign Documents Electronically?

Here are a few key reasons why you should use electronic signatures when possible:

They're legally valid and widely accepted for agreements in any industry.
They cut turnaround time in documents by 40% or more.
Electronic signatures take the hassle out of dealing with paper, printers, and scanners.
Electronic signature tools like SignWell make them easier than ever to do, for free.

What Are the Legal Aspects of Signing Electronically?

For an electronic signature to be considered valid, it has to meet the following requirements:

1Consent to Do Business Electronically

The person signing a document electronically must give consent. This is sometimes presented in the form of a checkbox, ensuring that the person signing is consenting to the submission of the signature electronically.

2Intent to Sign the Document

Similar to consent, users must be offered an opportunity to either accept or turn down signing the document electronically.

3Attribution of the Signature

The signature must be able to be attributed to the person signing—via IP address, a secure login, or other contextually appropriate means.

4Association of the Signature to the Document

The signature needs to be clearly connected to the document; for example, a signature sent over via email cannot be applied to a document that exists elsewhere, even if the person sending the email says it’s okay. To be legally binding, the electronic signature needs to be clearly connected to the specific material being signed.

5Record Retention

The signature must be able to be stored by the receiver, so that it can be produced as needed at a later date.

This might sound like a lot of rules, but if you are considering adopting electronic signatures for your business, you'll find that the tools like SignWell have already taken all these measures into account.

Common Questions Related to eSignatures

Are Electronic Signatures Legally Binding? Are They Allowed in Any Agreement?

Yes they are! The person signing a document electronically must give consent. This is sometimes presented in the form of a checkbox, ensuring that the person signing is consenting to the submission of the signature electronically.

What's the Difference Between an Online/Electronic Signature and Digital Signature?

We have a free online signature tool helps you create a free downloadable electronic signature, which is the same as an online signature. Digital signatures are a type of electronic signature with encrypted information that helps verify the authenticity of messages and documents. This typically involves a more complicated process involving private and public encryption keys. More on that here.