What Is An Electronic Signature & Its Benefits?

Electronic signatures allow firms to close deals more quickly and efficiently.

This will teach you everything you need to know about electronic signature software, as well as the features and vendors to look for in 2023.

1. What is an electronic signature?

An electronic signature is the use of a digital impression, markup, or element to indicate that the individual signing the contract agrees to the terms.

It differs from a 'wet signature,' in which parties must physically make a mark on a paper contract with a pen. Electronic signatures are instead formed on devices such as desktop computers, tablets, and smartphones.

This new approach to contract signing has been accepted globally, and electronic signatures will be able to be used to sign all types of papers by 2023.

2. What is the purpose of an electronic signature?

An electronic signature's primary goal is to enable individuals and organizations to sign documents electronically in a legal, safe, and quick manner.

Signatories can use electronic signatures to finalize business, develop new partnerships, and set terms without having to meet in person. Instead, people can digitally sign documents on any device and in any place that suits them.

3. What is accepted as an electronic signature?

A digital signature is any electronic method that certifies and communicates an individual's assent to particular terms. 

This means that it must be obvious that the signatory intended to sign the agreement. This is accomplished by including a signature in the digital document, typically in a signature box. 

Certain jurisdictions, however, will have more strict standards for what constitutes a legitimate eSignature. As a result, it's always a good idea to double-check where eSignatures are accepted before utilizing them.

3. Benefits of digital signatures

a) Parties can sign contracts from anywhere

Electronic contract signing eliminates the requirement for parties to be in the same room to finalize a deal or sign a contract. The ability to sign contracts online allows parties to sign contracts from anywhere in the globe and collaborate on contracts. 

Contracts can be signed via email, mobile technologies, or online with a contract management tool like Juro. This adaptability allows firms to sign agreements more quickly and easily, no matter where they are.

b) More secure than wet ink signatures

Electronic signatures also provide an additional layer of protection over traditional wet ink signatures. 

You can request that someone see a wet ink signature being appended to a contract, but there are normally no further records of the signing.

However, when you electronically sign a contract through a platform like Juro, an immutable document record is created by default. This record includes: 

• The identity of the signer 
• The IP address of the signer
• What instrument was used to sign the contract?
• The signing date and time

4. Who uses electronic signatures?

Electronic signatures are commonly utilized in corporations, with most departments adopting eSignatures to complete contracts. 

MSAs and SOWs, for example, are usually signed electronically by sales representatives. This is because it allows them to close agreements without being in the same room as the prospect.

When it comes to making a new hiring, talent teams can frequently include eSignatures to employment contracts and offer letters. 

Contract signing online allows organizations like yours to sign contracts more quickly and with greater freedom in terms of where and when they do it.

5. Are Digital Signatures legal?

Electronic signatures are frequently accepted as legally binding documents. varied jurisdictions, however, have varied regulations regarding the legitimacy of eSignature.

Since the introduction of the Electronic Communication Act in the United Kingdom in 2000, they have been considered as legally binding.

They are also considered legally binding within the EU if specific circumstances are met. This is stated in the eIDAS regulation, which was passed in 2016.

Electronic signatures are also permitted under the ESIGN Act in all 50 US states where federal law applies. This means that eSignatures are legally binding in the majority of the United States.

6. Electronic signature features to look out for

a) Bulk signing

One of the best electronic signature advantages for growing enterprises is bulk signing. Instead of signing contracts one by one, bulk signing allows you to sign all of your contracts with a few clicks.

This is ideal for senior stakeholders who must sign a large number of conventional contracts. They rarely need to read each of these from beginning to end, and bulk singing allows them to complete these contracts rapidly and efficiently.

b) Sequential signatories

Sequential signature workflows, also known as signing orders, are another wonderful feature to look for in eSigning solutions.

This functionality is offered in Juro and allows contract owners to not only send contracts to numerous signatories, but also to modify the sequence in which they must sign the contract.

This assists firms in ensuring that contracts are shared with the appropriate individuals for approval at the appropriate time.

c) Detailed document records

As we indicated earlier in this essay, eSignature solutions with thorough audit trails can improve a signature's security and make it easier to verify.

Organizations can use these records to authenticate signers' identities and capture critical information about electronic signatures. If a contractual dispute arises, this information can be used in court.

d) Automated signing reminders

Automated signature reminders are an excellent option to have if you want to get contracts signed quickly.

Rather than waiting for counterparties and internal stakeholders to sign contracts, set up automated signing reminders to notify parties when a contract requires their involvement. 

These reminders are completely customisable, allowing businesses to set them on their own terms.

e) Contract reporting and analytics

Electronic signature technologies that include contract reporting and contract analytics are especially beneficial to firms that sign a large number of contracts. 

These actionable insights assist them in identifying and correcting bottlenecks in the contract workflow.

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