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Renting Advice Comment How to rent out your property   |   May 21, 2014

Are Electronic Signatures safe and legal?

Should I or shouldn't I?

Apart from helping the environment by cutting down on millions of tons of paper, there are plenty more reasons as to why the takeover of the Electronic Signature is good business for everyone. The technology of the signature has evolved from the days of illiterate pirates scrawling crosses with a quill on parchment, to more modern day renters signing legally binding rental agreements with a ballpoint pen, although the underlying reason has remained the same: a mark of identity and the commitment to obligations and intent to adhere to a set of desired terms as written in a contract.

The evolution of the signature hasn’t stopped there; now we’re in 2015 we no longer need to rely on environmentally unfriendly paper, tip-ex and ink to create a signature that is legally binding. The era of the Electronic Signature has finally arrived - making everyone’s life easier, quicker and a lot more secure.

Who and why?

Global enterprises, business departments, individual professionals and consumers are beginning to standardise with eSignatures. These eSignatures are being used to increase the speed of results, slash costs and delight customers around the world in nearly every single industry – from insurance, technology, manufacturing, financial services, healthcare, communications, consumer goods and professional property management. It’s agreed across the board that eSignatures are saving everyone time and money. No faff, no expense and no time wasted.

How is it legal?

Before we answer this question, let’s look at what ‘legally binding’ really means. A Court of Law, when looking into matters of legality surrounding signatures and upholding contracts will ask this question: “Was the party signing to evidence his or her intention to be bound by the document in question and its terms?” To constitute a signature, an individual has to add their name to a document with the intention of giving the document and the terms therein authenticity, and to be bound by them. Courts will also look at whether or not the individual had the authority to make the obligation, and as to whether they were competent to do so.

There are obvious exclusions such as those under external duress and minors. The two key questions that are normally asked are:

  • 1. Did this person really intend to sign this?
  • 2. Has the document that I signed been tampered with in any way? If the answer to both these questions are “yes” then the signature, in whatever form, is legally binding.
  • The Acts

    The adoption of the Uniform Electronic Transactions Act (UETA) and the passage of the Electronic Signatures in Global and National Commerce Act (ESIGN) in 2000 cleared the way for a legal landscape surrounding the use of electronic signatures and records in commerce around the world. In the UK the Electronic Signatures Regulations 2002 ensures that certification-service providers’ activities are reviewed for compliance and safety and that certificates are issued to the public.

    All certification service providers in the UK are obliged to adhere to the privacy offered to users’ data outlined in the Data Protection Act 1988. These Acts declare that a signature should not be deemed illegal or illegitimate simply because it is electronic in nature. When a signature is made electronically, the signature software used should either do one of the two following things: - Attach a record to the signature reflecting the process within which the signature was created, or - Add a textual/graphical statement to the record, reflecting that it was executed electronically. T

    The ‘intent to sign’ question is answered with requesting a precise signature placement, thus indicating that the user intentionally moved the cursor and confirmed a signature. This, alongside records of email audit, IP address, time stamps and unique URLs make agreements consented into via electronic signatures ‘watertight’ and arguably more secure than ‘old fashioned’ signatures. Electronic Signature platforms will also ensure that the document delivered for signature is ‘non-editable’ which easily removes the concern raised in question 2 about whether or not the document has been tampered with.

    When can signatures be questioned?

    It's worth noting that electronically signed agreements, much like their paper counter-parts, can be called into scrutiny. Compliance with these laws is the very least a provider can do when presenting an online eSignature platform. If a dispute ever arises, then legal compliance is not enough on its own. The signature process must also ensure there is enough evidence to uphold the contract in a court of law, and thus surrounding process is vitally important.

    Photo Credit: lastquest

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