{"id":4556,"date":"2016-04-04T10:47:33","date_gmt":"2016-04-04T15:47:33","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/business-operations\/contracts-and-electronic-signatures.html"},"modified":"2024-06-06T02:17:29","modified_gmt":"2024-06-06T07:17:29","slug":"contracts-and-electronic-signatures","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/business-operations\/contracts-and-electronic-signatures.html","title":{"rendered":"Contracts, Electronic Signatures, and Digital Signatures"},"content":{"rendered":"\n
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Contracts, Electronic Signatures, and Digital Signatures<\/h1>\n
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\n By Susan Buckner, J.D.<\/a> | Legally reviewed by Susan Mills Richmond, Esq.<\/a>\n | Last updated\n
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Editorial Note: We earn a commission from affiliate partner links on FindLaw. Commissions do not affect the editorial integrity of our legal content.<\/p>\n\n <\/div>\n \n

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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

In 2011, then-President Obama made waves by electronically signing a bill into law using a device known as an "autopen." Although his predecessors had used the facsimile device to sign routine items like letters, this was its first use for an official Congressional document. It also breathed new life into the question: Are electronically generated signatures legal?<\/p>\r\n

The\u00a0Electronic Signatures in Global and National Commerce Act<\/a>\u00a0(ESIGN), enacted in 2000, made electronic signatures legal under federal law. The\u00a0Uniform Electronic Transactions Act<\/a>\u00a0(UETA) provides a model for states to copy in creating their own regulations. Forty-nine states and the District of Columbia use UETA and ESIGN. New York’s\u00a0Electronic Signatures and Records Act<\/a>\u00a0(ESRA) law recognizes electronic and digital signatures.<\/p>\r\n

Electronic vs. Digital Signatures: What’s the Difference?<\/h2>\r\n

Although people often use "electronic signatures" and "digital signatures" interchangeably, they differ in some critical ways.<\/p>\r\n

Electronic signatures, or\u00a0e-signatures, are any electronic procedure indicating a document’s acceptance. It may be a handwritten signature, as is sometimes used in emailed documents. It can be as simple as a PIN entered into a cell phone as part of a two-step authentication process. Any verification on an electronic document can be an e-signature.<\/p>\r\n

Digital signatures\u00a0may not be signatures at all. A digital signature is a certificate attached to a transmitted document that authenticates the sender’s identity. The trust service provider (TSP) assigns the digital signature. It links the e-signature with the document.<\/p>\r\n

The ESIGN Act allows the use of electronic signatures on legal documents. Digital signatures are not required. They provide another layer of security and verification for e-signatures.<\/p>\r\n

ESIGN Requirements<\/h2>\r\n

The ESIGN Act makes all electronic signatures legally valid. It declares all documents are valid, even if signed electronically. To be\u00a0legally binding, electronically signed documents<\/a>\u00a0must contain these elements:<\/p>\r\n