What is Electronic Signature

Signing a document no longer has to mean printing it, signing it by hand and sending it back. An electronic signature lets a person show their agreement with a document through an electronic process.

The electronic signature meaning is broader than simply adding a typed name or an image of a handwritten signature. Under the eIDAS Regulation, an electronic signature is electronic data attached to or associated with other electronic data and used by a signatory to sign. The European Commission also explains that it represents the signatory’s intention to agree to the content of a document or data.

Electronic signatures are used for contracts, approvals, consent forms, employment documents, financial agreements and other situations where someone needs to confirm their agreement electronically. The legal effect of an electronic signature depends on the jurisdiction and the type of signature used. In the EU, eIDAS provides the main legal framework for electronic signatures and trust services

How Does Electronic Signature Technology Work?

Electronic signature technology brings together the document, the signer and the records needed to complete a digital signing process.

A typical process looks like this:

The technology behind an electronic signature can vary. More advanced signatures may use digital certificates, cryptographic keys, authentication and trusted service providers. For example, the European Commission explains that advanced electronic signatures commonly use public-key infrastructure (PKI), certificates and cryptographic keys.

Types of Electronic Signatures

Under the EU’s eIDAS framework, electronic signatures have three levels. Each level adds requirements for stronger assurance.

A QES has the same legal effect as a handwritten signature under eIDAS.

The detailed requirements for SES, AES and QES depend on the applicable legal framework and are covered separately.

Suggested Read: A Country-by-Country Guide for Qualified Electronic Signatures

Common Uses of Electronic Signatures

Electronic signatures are useful wherever a person or organisation needs to approve a document without handling physical paperwork.

Common examples include:

• Banking and financial agreements
• Insurance documents
• Employment contracts
• Legal agreements
• Customer consent forms
• Business contracts
• Government and administrative documents

Businesses often use electronic signature software to prepare documents, send them to the right signers, track completion and keep records of signed documents. An electronic signature solution can bring these activities into one digital workflow, which is particularly useful when many documents need to be signed. An e-signature solution can also be connected with other business systems so that signing becomes part of an existing customer, employee or document workflow.

Benefits of Electronic Signatures

Electronic signatures make it easier to complete documents without relying on physical paperwork.

Electronic signature helps in: 

• Complete agreements faster
• Support remote signing
• Reduce paper-based administration
• Track signing activity
• Keep electronic records
• Reduce manual handling of documents

The European Commission notes that electronic signatures support paperless processes and can be used across areas such as contracts, e-commerce, online banking and administrative procedures.

Legal Validity of Electronic Signatures

Electronic signatures can have legal validity, but the requirements differ between jurisdictions and documents.

In the EU, the eIDAS Regulation provides the legal framework for electronic signatures. It also states that an electronic signature cannot be denied legal effect or admissibility as evidence simply because it is electronic or is not a qualified electronic signature. A QES has the equivalent legal effect of a handwritten signature.

In the United States, electronic signatures are also recognised under federal and state laws, including the Electronic Signatures in Global and National Commerce (ESIGN) Act and the Uniform Electronic Transactions Act (UETA).

When assessing an electronic signature, factors such as signer identification, consent, document integrity and records of the signing process can be important depending on the applicable law and transaction.