Have you ever “signed” a PDF with a picture of your signature and wondered, “Is this legal?” Or maybe you aim for the strictest compliance, so you print out every document, sign with a pen, and send back a scanned copy. The truth is, these conveniences can work for small agreements, but they aren’t always legally binding. This doesn’t mean all contracts must be signed in person – in fact, there are tools to help you document a signature is adequately reliable.
That’s where Digital Signatures come in.
Lineup Systems’ out-of-the-box electronic (digital) signature solution (provided via our Proposal Builder plugin), utilizes SignRequest technology to capture customer signatures. With digital signatures enabled, your customers will be able to digitally sign proposals or order confirmation documents after clicking on a link sent to their email. This process provides a legal alternative to the traditional method, where a user would need to print, sign and scan a document, before sending it back to be attached manually in your order management system.
On average, digital signatures increase turnaround time on a signed document by 25x! In addition, companies who use a digital signature tool can expect:
- Opportunities for automation: when Proposal Builder and digital signatures are enabled within Adpoint, you can set Workflow rules to automate most of your approval process, saving time, energy and money!
- Faster turnaround times: the easiest way to decrease the time between contact sent and contract signed is to make it easy and secure to provide a signature.
- Cost savings: empower your team to spend time on what really matters, instead of chasing signatures. Save on printing and mail costs.
The benefits of digital signatures are clear, but for some, the question of legality remains. It is important to note that only a judge can ultimately decide if a signature is valid. However, there is a strong legal basis for digital signatures, and they have been upheld in court in many cases.
For reference, here is some information on legal frameworks for digital signatures in the EU and United States:
European Union: eIDAS regulation
As of July 1, 2016, all EU member states have adopted the (EU) No 910/2014 regulation (also known as eIDAS). As such, all EU member states have the same regulations regarding electronic signatures.
eIDAS Article 25: Legal effects of electronic signatures
“An electronic signature shall not be denied legal effect and admissibility as evidence in legal proceedings solely on the grounds that it is in an electronic form or that it does not meet the requirements for qualified electronic signatures.”
(Source: Article 25 eIDAS)
This ensures that an electronically signed document can be admissible as evidence of contract. Additionally, SignRequest is classified as a having advanced electronic signatures, which is beneficial in a dispute as they have higher requirements with respect to the level of proof.
eIDAS Article 26: Requirements for advanced electronic signatures
An advanced electronic signature shall meet the following requirements:
- it is uniquely linked to the signatory;
- it is capable of identifying the signatory;
- it is created using electronic signature creation data that the signatory can, with a high level of confidence, use under his sole control; and
- it is linked to the data signed therewith in such a way that any subsequent change in the data is detectable.
(Source: Article 26 eIDAS)
There are two laws that establish the legality of electronic signatures in the United States.
- The Electronic Signatures in Global and National Commerce Act, signed into law on June 30, 2000, provides a general rule of validity for electronic records and signatures for transactions in or affecting interstate or foreign commerce.
- UETA (1999) establishes the legal equivalence of electronic records and signatures with paper writings and manually signed signatures, removing barriers to electronic commerce.
SignRequest (which powers Adpoint’s digital signature functionality) delivers electronic signature Advanced Digital Certificates. A Digital Certificate is like an electronic version of a passport and will only be issued after verification of your identity by a trusted third party (called a Certificate Authority or CA).
Advanced Level Certificates comply with the requirements set by eIDAS (EU No 910/2014 regulation). Below, an explanation will be given on these requirements confirming SignRequest compliance.
1) It is uniquely linked to the signatory
SignRequest provides a ‘signing log’ once the document is signed. This log provides a unique link to the document signatory, and the signed document.
2) It is capable of identifying the signatory
The SignRequest ‘signing log’ contains the following information about the signatory:
- Email address
- All inputs made, for example:
- Name and Signature
- IP address during signing
- Time and date of the signature
- Hash code of the signed document
This information can be used to identify the signatory, and additional criteria can also be captured if needed. It is created using electronic signature creation data that the signatory can, with a high level of confidence, use under their sole control
The signatory is the sole holder of the private key, used to apply the signature (ensuring it is possible to verify who they are). The signatory can keep their email account, phone and/or SignRequest account under their sole control.
It is linked to the data signed therewith in such a way that any subsequent change in the data is detectable
The ‘signing log’ provided by SignRequest contains a hash code. This hash code is unique for every document, and any changes to the document will result in a new hash code. As such, it is possible to compare the code of the document with the hash code of the signing log to determine the document is unchanged. When a recipient opens the signed document, the signature verification process automatically checks to see if any changes have been made to the document since it was signed.
Additionally, the signing log and hash codes of the document are sent by email once all parties are signed, and a log is kept of all hash codes. The documents can also be sealed with SignRequest’s digital certificate.
Setting up digital signatures with Adpoint is easy. First, you’ll need our Proposal Builder plugin, which allows you to automate your proposal creation process. Contact your account manager to learn more or get started.