Legally Binding Signature: Everything You Need to Know
A legally binding signature makes an agreement official once all parties have placed their signatures on a contract.3 min read
2. Federal Law Requirements
Updated August 19, 2020:
A legally binding signature makes an agreement official once all parties have placed their signatures on a contract. Signatures are the most common method of indicating that you have read over and agreed to the terms, even if a person’s signature is so stylized and unique that’s illegible. Further, as agreements move into digital form, the basis on what qualifies as an official signature has been broadened substantially.
Regardless of the form, the importance of the signature entails proof that an offer has been accepted and considered. However, are there rules for determining if a signature is valid, or even if signatures are necessary, to begin with?
In fact, there are few that you should be aware of. First, a signature is a person’s name written in a unique form. With that, this is not truly necessary in all cases. All one would need is a mark that represents who that person is. It can be in the following forms:
As long as the signature represents who that person is and his or her intent, any of the marks are considered valid and legally binding. Signatures are usually recorded in pen, but this is not always the case.
What Constitutes a Signature?
A signature may be issued by anything that marks on paper. The pencil is not the ideal choice because it can erase or be smudged, but signatures made in pencil are just as valid as signatures based in pen. Signatures can be issued in digital form or via stamps because there are various forms of writing implementations. If you cannot sign an agreement on your own, you can give it to another party who can sign documents on your behalf. You may also use what’s called a digital signature, a way of signing documents that’s not in printed form.
When discussing digital signatures, also called e-signatures, this means typing an individual’s name at the end of a digital document, pasting images of an individual’s signatures, and using a unique code to make it official. Once you click the “Accept” button, the document is officially signed. However, a signature is not always necessary to bind an agreement, but when signatures are necessary, whether it is in e-form depends entirely on the consent and intent of the parties involved.
In the U.S. and Canada, if intent and consent are involved, e-signatures are as legally sound as a signature signed by hand. Due to the large-scale shift from paper to digital form, lawmakers passed the Electronic Signatures in Global and National Commerce Act of 2000. The law realizes the validity of contracts and electronic records as providing the same weight as paper counterparts. Since it falls under federal law, this affects all agreements considered to enter interstate commerce, but states have different laws when it comes to digital signatures.
Federal Law Requirements
However, federal law mandates that no record, contract, or signature may be unenforced or denied because a signature comes in digital form. At the state level, the Uniform Electronic Transactions Act offers similar protection of digital records and signatures. The law also permits people to choose a paper version instead. Consumers should be given the chance to give electronic consent, in a way that demonstrates that a consumer may access information in digital form that will be used to offer the information that’s the subject of consent.
Each state has its own similar brand of law. For digital signatures to be enforceable and valid, the digital document must be enforceable and valid. This also means that a complete digital copy of the document that’s signed by all parties should be made or sent to available parties that can be retrieved or saved. The document should also be printed. As with an agreement signed via hand, it may be challenged in front of a judge that the document was changed after it was officiated through signature.
In most instances, the document, along with the digital signature, is valued unless it is proven otherwise. This boils down to the weight of the evidence. Among other types of evidence, the steps taken to maintain the integrity of the signed agreement would be factored in deciding if it has been changed in some way.
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