What Is an Electronic Signature?

An electronic signature (also called e-signature) is a mark of consent you place on a document using an electronic device like your phone, computer, or tablet. That mark could be a typed or drawn version of your name, a scanned version of your wet ink signature, biometric data like a fingerprint, or even as simple as a tick in a checkbox.
E-signatures remove the need to print documents before signing them. Instead, you use signature software to sign your signature with your finger, stylus, pen, or keyboard, right onto your digital document.
In this article, we’ll learn:
  • Why people opt for electronic signatures instead of wet ones
  • The difference between a digital signature and an electronic signature.
  • What documents can be signed electronically
  • The different types of electronic signature
  • How to sign an electronic signature

Let’s dive in!

Why People Opt for Electronic Signatures

People choose to use electronic signatures in place of handwritten signatures for many reasons. Some of them include:

  • Speed

    Electronic signatures shorten the tedious signing process of printing, signing, scanning, and re-uploading documents before sending to recipients. There’s only one step; sign! This will save you anywhere from 10 minutes to a few hours depending on if you own a printer or need to run to the store.

  • Security

    Paper documents are easier to steal or misplace. But you can store an electronic document on your computer and protect it with a password. 

  • Environmental friendliness

    Electronic signatures reduce paper waste since they don't require signatories to sign on physical papers. Over 40% of harvested wood goes to paper production which reduces oxygen and threatens animal habitats.

  • Record keeping

    Electronic signatures generate audit trails when you use the right software. Audit trails are digital records of the history and actions you perform on a document. That means your electronic signature can record who opens or views that document.

What is the difference between an electronic signature and a digital signature?

The major difference between electronic and digital signatures is the level of security they provide to signed documents. It’s important to note however that digital signatures are a type of electronic signature. Some electronic signatures use digital signatures as part of the method of ensuring document integrity so you may get all the benefits of digital signatures with the right electronic signature.

Verification
Verification methods

Electronic signatures provide simple ways to confirm a signer’s identity, such as allowing the signer to use checkboxes in order to show their consent, add their email address, and the date they signed the document. Some of these ways can be thought of as being less secure while others are just as secure (or more) since they can use digital signatures as part of how they do this.

Digital signature secure documents with hashing and Public Key Infrastructure (PKI). Hashing protects the signature by encrypting it while a PKI gives signatories of a document public keys. These keys encrypt and decrypt signed documents to prevent hackers from tampering with it.

Validation
Validation methods

Digital signatures are validated with trust service providers —Trust service providers issue the digital certificates which browsers and software use to link individuals with their public keys and authenticate content they access.

Electronic signatures can be validated with trust service providers when they're implementing digital signatures. If not, electronic signature tools often use their own validation methods along with file checksums — sequence of numbers and letters used to check data for errors. If you know the checksum of an original file, you can use a checksum utility to confirm your copy is identical.

Speed
Speed

While digital signatures offer higher-level security in some cases, electronic signatures are faster and more convenient because they take less time to authenticate users. If you need to sign a document immediately, an electronic signature is your best choice.

What documents can be signed electronically?

Sales contracts, invoices, and purchase orders, vendor agreements, you name it! As long as it’s legal and admissible in court to sign a document electronically, you can do that.

Other documents you can sign electronically include:

  • New hire paperwork
  • NDAs Letters of intent
  • Offer letters
  • Sales contracts
  • Permission slips
  • Rental/lease agreements
  • Liability waivers
  • Financial documents. E.g. Expense reports

You can also sign documents in different formats, such as PDFs, Docs, Epubs, and JPEGS electronically.

Types of electronic signature

There are 3 types of electronic signatures to use, depending on the type of document you want to sign and the level of security you require for your doc.

  1. SES

    Simple electronic signature

    This type of signature operates the lowest level of authentication and verification.

    An example of this is email verification links. The electronic signature software will send unique links or access codes to your email address. Clicking on the links or entering the access codes into the software will then verify your identity.

    It’s best to use this signature when you sign simple agreements between just you and a second party. It’s not the recommended option for signing important documents. E.g. Project documents.

    Last Pass Graphic
    Sample email verification link e-signature from Lastpass

  2. AES

    Advanced electronic or digital signature

    An Advanced Electronic Signature is more secure than a SES. Its method of verification links a signatory to their electronic signature through the Public Key Infrastructure (PKI). This system uses multi-factor authentication to verify the identity of signatories. 

    For example, the electronic signature app will prompt you to type an access code- sent to your devices via message- to verify your identity. It may also prompt you to answer secret questions you have previously set up before you can sign the document.

    This signature best suits employment letters, rental agreements, and account opening documents.

  3. QES

    Qualified advanced electronic or digital signature

    A qualified electronic signature is created by a Qualified Signature Creation Device (QSCD), and it's the most secure type of electronic signature.

    Here, the signature software uses ID verification to authenticate the identity of signatories. For example, the software may require you to take a snapshot of your driver's license or any other form of ID.

    It may also prompt you to do face-to-face identification through a video call.

    This signature best fits business audit reports, consumer credit contracts, and employment contracts.

How to sign an electronic signature

Some people use software like Microsoft Word or Adobe to sign e-signatures. We share how in our post How to create electronic signatures. But those are not without their challenges. For one, the Adobe Reader DC application commonly develops issues when you run it on your computer and the Microsoft Word application does not allow users to sign directly on documents. You’re limited to importing drawings of your signature from other apps.

That’s why we recommend dedicated e-signature tools, most of them are free too!

Here’s how signing with SignWell works:

  1. Signup for a free SignWell account

    SignWell is a free electronic signature software for signing documents electronically. You can sign PDFs, Docs, Epubs, and other document formats.

    All signatures created with the SignWell software comply with the US and international laws, such as the E-Sign Act and the Uniform Electronic Transactions Act (UETA). These laws recognize the validity and legality of electronic contracts and the defensibility of electronic signatures, and 49 states in the USA currently observe them.

    Sign up with a Google account

    To sign up with a Google account, go to the SignWell homepage. Then click on "Sign up with Google to start".

    Google Signup Graphic

    Select the Google account of your choice and that’s it! You’ve got an e-signature account, automatically created from your Google details and ready to be used.

    Choose account graphic

    Sign up with a new email and password

    If you don’t have a Google account or prefer to use a non-google email, go to the registration page to create an account with an email address and password.

    Simply fill in your email, name, and desired password then click on "continue".

    Signup Graphic

  2. Upload your document

    After you’ve successfully registered your account, you'll be redirected to your new SignWell dashboard. Click on "Add your first document" to upload the document you need to sign.

    Add Your First Document

    Click on "Upload document".

    How would you like to start your Document?

    Click on "Select a file" to choose the document you want to sign from your computer.

    Upload a file from your computer

    After uploading your file, click the checkbox for, “I’m the only person signing” if you don’t need a signature from others. For this walkthrough, we’ll assume that’s the case, but it’s a similar process if you’re requesting a signature from others instead.

    Upload Last Step

  3. Sign your document

    Once you upload the document you want to sign, you'll see a deck of elements on the left side of your screen. This deck houses options for adding signatures, initials, texts, check boxes, and dates to your documents.

    SignWell sets the signature option as the default, so you just need to click on the spot where you want to add your signature on the document. Choose to either type, draw, or upload a scanned version of your signature to sign the document.

    DATA ENTRY/SIGNATURES

    Once you’ve signed the document, click on "save".
    You should see your signature in the document now. Click Send to send the document to the other signer.

    Type Your Signature

    You should see your signature in the document now. Click Send to send the document to the other signer.

    Send Document modal

    Type in the recipient's email address and a quick message, then click Send.

    Send Completed Document

    Click or hover over the Share button to share your signed document or download it as a PDF.

Common Questions Related to eSignatures

Here are some answers to the most frequently asked questions about electronic signatures:

Are Electronic Signatures Legally Binding? Are They Allowed in Any Agreement?

Yes, electronic signatures are legally binding in all states in the USA, as well as 27 countries worldwide, including China, Russia, Australia, states in the European Union, and Canada. E-signatures are also allowed in agreements as long as both parties signing the documents give their consent, which they can represent by ticking a virtual checkbox or drawing their signatures.

What does signing electronically mean?

Signing electronically means using your computer or some other electronic device to draw your signature, or insert a scanned image of your real-time signature or symbol into a document.

What, specifically, makes electronic signatures legal?

Electronic signatures are legal when they identify and prove that a signer made a signature (through audit trails mostly), that they made the signature on purpose, and they have not changed the document after signing.

What's the Difference Between an Online/Electronic Signature and Digital Signature?

E-signatures focus on verifying the identity of signers, recording their intention to sign, and executing their agreement, while digital signatures focus on identifying signers using unique digital certificates. But digital signatures are also a type of e-signature and e-signatures can use digital signatures thereby negating that difference.

How do you make a legal electronic signature?

To make a legal electronic signature, sign up for an electronic signature software. Most software provide checkboxes, signature, and date fields to show that whoever is signing is consenting to the submission of the signature electronically.

You can upload your document to the electronic signature software, then draw, type, or upload an image of your signature on the document.

Do electronic signatures hold up in court?

Yes, electronic signatures hold up in court and have support from the Uniform Electronic Transactions Act (UETA) and the E-Sign Act, which recognize the legitimacy of electronic signatures on documents in court. It also helps if the electronic signature software you use for signing the document provides audit trails to ensure the authenticity of the signature.

You should note, however, that documents like divorce & adoption papers, court orders, notices of termination, wills, deeds, and other similar documents do not hold up in court when you sign them electronically.

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