Digital Signature Software
Published August 26th, 2016 by

7 Ways to Make an Electronic Signature Legally Binding

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7 Ways to Make an Electronic Signature Legally Binding

Electronic signatures can be risky if you don’t know how to determine the legitimacy of the contract. It is important to understand that you should be accountable of the contract that you signed. Signing a document is not just about putting your name on the document, but also putting your honor and credibility.

It is essential to verify if an electronic transaction is legally binding as some may look for loopholes to make a dispute on the contract and may claim that they do not need to pay for services that were given to them.  Some may also claim that they did not agree on the contract which may result to bring the case to court. Recognizing the legality of every electronic transaction can help you gain a better understanding on your legal stand. In addition, it can guide you on what needs to be considered before you agree to a contract online. The electronic transaction has its strengths and weaknesses, but with the knowledge of determining which is valid or not will minimize the risk of the transaction.

The laws on electronic signature vary in different countries, but most industrialized nations already consider it to be legally binding while developing countries are already making an act for signature laws. The United States, for example, is governed by the Electronic Signatures in Global and National Commerce Act (ESIGN) and the Uniform Electronic Transactions Act (UETA). The general rule in verifying the electronic signatures and transactions are stated in the ESIGN Act.

Here are some ways to ensure that your electronic signature is legally binding.


All electronic transactions must be able to authenticate the signers. Authentication can be done through confirming a username and its password, code, social security number or date of birth. The electronic signature tools should allow the person who created the document to customize the authentication options. This gives the creator of the contract to choose the authentication process that can be more convenient to them. The authentication process depends on the risk level of the document. Some may require multiple ways to verify the identity of the signer. The identity of the signing parties must be established before they make an agreement or contract.

There are multiple electronic signature software in the market today that you can choose from. So when selecting a software provider, make sure that you carefully consider its authentication process and it should meet your needs. It will be to your advantage if you have a software that can be customized to ensure the security of the documents and at the same time can efficiently and effectively meet the demands of your business. You need to be mindful of the qualities of the software when choosing a digital signature software provider. It should not only provide the present solution to the business but should also be flexible to meet the future needs of the business.

Transparency and Consent

The legalities of the digital signature will also depend on the transparency and the consent of the electronic transaction. According to SIGNiX, the consent and the legal disclosure of the contents of the document should be approved by both signing parties before they will sign it. The signers must be aware that what they are signing is considered a legal document and they will be accountable once they sign the contract. It is necessary for the documents to meet the legal requirements stated in the international and of the country’s law to make it legally binding. Also, if should be in accordance with the company’s policies and standards.

The electronic signature should be validated and must establish its integrity from the time the documented was created and while it is stored. The software’s security feature is very crucial to guarantee that the document is free from security breaches. The electronic transaction should be proven that what was written on the document was what both parties have agreed. Although different eSignature software has unique processes in making a contract, it should clearly identify the signatory, the intention must be indicated and its integrity should be established at all times.

A clear statement of the consumer’s consent must be obtained from financial institutions before making any contract. The consumers must be informed regarding the hardware and software requirements needed to access and store the electronic documents. It must demonstrate its accessibility to the information if the consumers agree to the given terms. If there are changes in the requirements, the signers must be notified and should be given the option to opt out.

Signers Must be Aware of Its Legal Impact

The signers must understand that their signature is legally binding. The value of an electronic signature and the handwritten signature are the same which means it has also a legal impact. The signer should acknowledge that the electronic transaction is legal. It is important to thoroughly read the contents of the document before you affix your signature.

An electronic signature is only considered to be valid if the signer has the intent to sign it. Since it has the same value as the written signature, it is also bound by the same law as the paper transaction.

Electronically Notarized the Documents

Notarizing a document electronically gives you the confidence that the electronic signature is valid and the document is legal. The eNotaries validates the electronic signature as well as the electronic document. You may spend some money for the notary charges, but this will give you the assurance that the documents are legally binding.

Free From Tampering

No tampering should be detected on the documents. If tampering with the contents of the documents was made, it’s important that your software should be able to easily detect the changes that were done. The best electronic signature software should be able to notify the signers if there are alterations or modifications done on the document after it was signed. It is vital that the documents are secure at all times to prevent tampering and hacking.

Different digital signature creator software providers also have different ways to verify if alteration were done on the contract. Some may notify you that changes are made. Other software may automatically make the contract void once a modification is detected. Invest some time to read the reviews on electronic signature software in order to determine how the software can validate the electronic signature and guarantee that the documents are free from tampering.

Document Must be Accessible by Signers

For the digital signature to be legal, all signing parties must have a duplicate copy of the documents. The signer must have the capability to access the documents whenever they want it through the internet and should be able to obtain a hard copy when needed.

The signers must be made aware that they can demand a paper copy if they want one and any fees involved must be disclosed.

All Events Must be Documented

It is important that all events that took place on the document should be documented. Every change must be automatically logged. The audit trail must be available anytime in case the documents are needed for legal purposes. You should be able to get a copy of the events behind the transaction. Aside for downloading the PDF copy of the signed documents, also download the PDF of the audit trail. It is essential to determine who signed the documents and when it was signed. Any modification made on the document should also state why it was modified and when it occurred. The signing parties must make an approval that they agreed to those changes. This will help your case, especially that you have the evidence to support your claims in court.

It is a good practice to always consider the legality of each transaction every time that you make an agreement or contract online. You should always be prepared for the legal risk of whatever you sign like the paper signature. Always put into considerations when getting an eSignature tool provider that it should meet your future legal needs.

Always keep in mind that when making a contract to read the terms and conditions stated on the document to avoid any dispute in the future. A contract must be agreed upon by all relevant parties before the signing of the documents should take place. You should also have a copy of the documentary evidence of what was agreed and make sure that it is secured to prevent any falsification on the contents of the documents. That is why it is important to be very conscious in choosing the digital signature provider since they will be responsible for storing the document. The documents should always be kept in a safe and secure place to prevent data breaches.

Selecting the best electronic signature software can be challenging, especially that there are plenty of software to choose from. Read on digital signature software reviews to help you decide on which software best suit your needs and meets that standards and policies of your company. Confused on which software will work for you? Check the list of digital signature software at

Keith Moore

Keith Moore has worked with several leading Android development agencies to build customized mobile apps enabling businesses to extend the use of their services to smart phones and mobile devices.

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