Electronic signatures are quite different from conventional signatures. Instead of writing with the hand, electronic signatures are typed digital agreement with a document or acknowledgment of receipt. This type of signature can lead to legal disputes since it cannot be checked for consistency with a handwritten signature. However, your business can avoid legal trouble resulting from the use of electronic signatures. All that is required is to create precise policies and procedures for signing documents electronically. After that, people can start signing your documents with your company without the need to print, sign, and mail them back.
Important Legal Issues
There are several court rulings that validate the use of electric signature. Besides, the federal law commonly referred to as the E-Sign Act of 2000 ratifies the court rulings into law. A typical legal tussle that readily comes to mind is the Cloud Corp vs. Hasbro, Inc. In its ruling, the Seventh Circuit Court of Appeals affirmed that the federal law indicates that electronic signature has the same legal weight as a handwritten one. Moreover, a similar federal law called the Uniform Electronic Transmissions that gives electronic signature the same legal standing as a handwritten one has been adopted by 46 states in the USA.
However, it is essential to note the possibility of an electronic mail account getting hacked. In such instances, the electronic signature signed by such as account might not be from the actual person. Unlike handwritten signatures, electronic signatures cannot be verified by comparing them with a previous signature. That is why it is essential to find other means for ratifying the legitimacy of electronic signatures.
Since the possibility of an electronic signature getting forged exist, the party can back out of an agreement with claims of a forged signature. An excellent countermeasure is to establish another communication channel that ratifies the digital signature. For instance, you can send the document to the other party through email and request for acknowledgment of receipt and signing of the document. The party then replies the email with the signed document as an attachment.
Means of Sending digitally-signed documents
Another excellent strategy is to limit the channels through which the party can send an electronically signed document to your business. The option of submitting such document in person is ruled out; the party may as well make a handwritten signature during the submission. In the same vein, faxing the document is equally irrelevant. The best approach is to secure the document with a password and transmit it only through an email.
It is essential to note that the provisioning of the E-Sign Act mandates that the party consent to using an electronic signature. A business does not have the right to refuse handwriting signature from a second party. The provisioning of the E-Sign Act clearly states that a party must consent to sign the document electronically to be valid under the Act. However, federal law does not outline the procedure of verifying a party’s consent to sign a document electronically.
Many businesses resort to using secondary verification procedure. For instance, many online banks simply ask their customers to verify their bank account. The law also requires a business to notify the customer about the option to opt-out of the electronic signature at any time. The customer must also be notified if a paper-based contract is available.