U.S. Electronic Signature Compliance Explanation

Are electronic signatures legal in the United States? What laws primarily regulate electronic signatures?

Electronic signatures are legal in the United States, and U.S. electronic signatures are primarily regulated by the “Electronic Signatures in Global and National Commerce Act” (“ESIGN”) and the “Uniform Electronic Transactions Act” (“UETA”).

ESIGN and UETA are two U.S. laws that regulate electronic records and signatures related to transactions. ESIGN applies to commercial, consumer, or business affairs, while UETA applies to person-to-business, business-to-business, or government affairs.

What are the validity requirements for electronic signatures in the United States?

To make an “electronic signature” legally binding under the ESIGN Act, it is recommended that all electronic signature workflows include the following five elements:

1. Signature Intent Like handwritten signatures, the signer must demonstrate a clear intent to sign the agreement electronically. For example, the signer can indicate intent by using a mouse to draw a signature, typing their name, or clicking a clearly labeled “Accept” button.

2. Consent to Conduct Business Electronically Most electronic signature laws also require consent to conduct business electronically in some form. This consent must be provided in a way that proves the user has the necessary technology for electronic signatures. Many enterprise electronic signature solutions require signers to “click accept” standard consent terms or provide options for custom consent terms.

3. Opt-Out Clause If the signer chooses not to sign the agreement electronically, clear instructions on how to manually sign the agreement should be easily accessible as part of the signature workflow.

4. Copy of the Signature All signers should receive a copy of the fully executed agreement. Many electronic signature solutions automatically provide executed agreement copies to signers as part of the approval workflow.

5. Record Retention Record retention requirements are addressed by the ESIGN Act, which legalizes the validity of electronic records as long as they accurately reflect the agreement and can be reproduced as needed. Typically, this requirement is met by providing a fully executed copy to the signer or allowing the signer to download a copy of the agreement.

What types of electronic signatures are recognized in the United States? What are the requirements for each?

The United States recognizes two types of electronic signatures: electronic signatures and digital signatures.

Electronic Signatures:

Refer to any electronic process that indicates acceptance of an agreement or record. Electronic signatures use various common electronic authentication methods to verify the signer’s identity, such as email, company ID, password protection, or PIN sent to a mobile phone.

Digital Signatures:

Digital signatures use digital certificates from trusted service providers (TSP), such as certificate authorities (CA), to verify the signer’s identity. Digital certificates demonstrate signature proof by binding the digital certificate associated with each signature to the document using encryption.

In what situations can electronic signatures be used in the United States?

Electronic signatures can be used in the following documents or scenarios, but are not limited to:

• Human Resources
• Confidentiality Agreements
• Software Licensing
• Education
• Life Sciences
• Technology Sector
• Consumer Transactions (excluding certain post-breach notices and non-uniform exemptions in California’s UETA)

In what scenarios cannot electronic signatures be used in the United States?

Electronic signatures cannot be used in the following documents or scenarios:

• Marriage certificates, birth certificates, and death certificates
• Wills and testamentary trusts
• Depending on the state, other documents that may require “wet” signatures include “Do Not Resuscitate” orders, powers of attorney, healthcare proxies, adoption documents, divorce documents, and other family law documents