Electronic Signatures vs. Digital Signatures. Which One Should You Choose?
Electronic signatures and digital signatures – these are two terms that are thrown around quite frequently in today’s modern, digital age. Looking at how similar they sound, it is easy to get confused between the two. However, in reality, there is a significant difference between these two terms. All digital signatures are electronic signatures, but not all electronic signatures are digital signatures. Confused? Read on to find out what sets these two apart and figure out which one suits your signing needs the best.
What are electronic signatures?
The concept of electronic signatures is rather broad and generic, and may or may not prove to be a secure medium to bind the signer to the agreement. An electronic signature is an online medium that captures the intent to approve the content of an electronic document. For example: your name typed in an email, a captured image of your paper-based signature, or typing your initials at the end of any message.
What are the drawbacks of electronic signatures?
Based on the definition, an image of a wet signature or simply typing your name at the bottom of a document can also be considered as an electronic signature. The challenge is, this does not necessarily verify the authenticity of the signer. For example, chances are someone else can easily forge your signature or capture an image of your wet signature. History is replete with such lawsuits, leaving businesses with severe impacts. On March 9, 2011, in the dispute between Carrefour Banque and Fort de France, scanned signatures were deemed to be insufficient to enforce the agreement, owing to the lack of authenticity of the signer’s legal commitment. To prevent such situations, digital signatures were introduced.
What are digital signatures and what’s the big difference between the two?
The distinction that sets the two apart is the fact that digital signatures offer a legally enforceable way to identify the signing party through digital certificates obtained from certifying authorities. A digital signature platform offers detailed logs of document edits, as well as security measures to prevent document manipulation by any external agents and make sure the signer’s identity is verified.
Furthermore, to authenticate online identities and secure online session from cyber eavesdroppers, trusted Certificate Authorities (CAs) such as Entrust generate cryptographic keys. Digital signature solutions like DrySign are authorized and certified by such legal entities.
Laws and regulations involving digital signatures in the United States
Nations worldwide have adopted electronic transactions and digital signatures to improve online shopping transactions and make signing agreements/documents smoother and safer over the internet.
- The ESIGN Act introduced by President Bill Clinton on 30th June, 2000, granted legality to electronic signatures.
- The Uniform Electronic Transactions Act (UETA) was adopted to establish a consistent framework that defines the legitimacy of electronic signatures in online transactions. In order to standardize e-signatures, the following criteria were set:
- The intent to sign should be clear.
- The consent to conduct online business must be acknowledged by the signing parties.
- There should be a concrete way of associating the signatories with the agreement.
- Detailed records are to be maintained and made available to all the signing parties.
Which one should you choose?
Be it for personal use or enterprise-level operations, any contract or agreement has its own depth of legal implications, depending upon the context. When it comes to legally enforcing the contract, there is no better alternative than a secure digital signature solution that offers all the necessary features to keep the document safe from external manipulation and maintains the signer’s authenticity. Moreover, digital signatures are easy to implement and come with tons of integration options.
Broadly speaking, electronic signatures are more about simply verifying a document with the intention of signing, without too much focus on authenticity and security. On the other hand, digital signatures warrant the authenticity of the signing parties, keep the document secure, and legally bind the signatories to the contract.
The essence of any agreement, contract, or enforceable document signing lies in its legal implications. The lack of enforceability of any legal covenant beats the point of signing it in the first place, and this is where electronic signatures fail to make a significant impact.
In the grand scheme of things, investing in digital signatures not only avoids lawsuit settlements, but also speeds up your workflow, reduces inaccuracies & file handling costs, and cuts down any hidden costs associated with office supplies, document storage & preservation, and so on. All in all, going for digital signatures is definitely a step in the right direction.