People around the world collectively sign hundreds of thousands, if not millions, of papers every day. Regularly, we sign bank forms and documents, real estate contracts, and application forms — the list goes on.
For centuries, signatures have been established as one of the global and well-known requirements to grant and validate legal consent. The authority signatures have is evident through its use in legal transactions, particularly in deals that involve money and assets.
A signature is a distinct and personalized mark or sign by an individual on a document to declare and confirm awareness, consent, approval, and commitment. Globally, the majority of individuals sign using a pen and paper, but electronic, typewritten, engraved, and stamped signatures are now valid.
The purpose of a signature
The most basic use of signatures is for authentication. Government agencies, private-owned businesses, financial and non-profit institutions, and organizations of different causes require signatures to verify the identity of the person they are transacting with. For instance, a salesperson might require your signature on a sales receipt to compare it with the signature on the back of your credit card. While anyone can effectively copy a signature, a forged signature is definitive proof to convict a person of fraud. In addition, due to signatures holding legal power, fraud and identity theft are prevalent; fraudsters forge signatures to access the information of their victims to steal money and conduct illegal activities. Therefore, a signature must be unique and hard to imitate to avoid problems.
Aside from authentication, the use of signatures assures data integrity or the assurance that no data was modified since the signature was applied, and non-repudiation or the false rejection of participation in a deal.
Signatures are traditionally in cursive and while perhaps the majority of people sign in such a writing style, it is not a requirement. One can use their printed, non-cursive name or even a shape or symbol, such as a star or happy face, which is now a valid signature. A cursive signature is unquestionably ideal; nevertheless, a signer can use any distinct mark, as long as the purpose of signing is clear to him or her.
Signing in cursive has several benefits. Its advantages include easier association with an individual, difficulty to forge unlike symbols, and prevention of avoidable difficulties like the refusal of another party to accept a seemingly unprofessional signature. Overall, a person’s signature must be consistent on all documents to avoid any problems.
Electronic signatures are a result of innovation — and the relentless demand of people for convenience. As businesses set their eyes on automating their processes for efficiency, embracing the advantages of digital solutions, technology companies have been introducing new innovations, including electronic signatures.
Electronic signature tools have become the much-needed answer to several inefficiencies caused by manual or wet signatures. As the opposite of manual signatures, and as its name suggests, one can only create electronic signatures using a computer or mobile device.
According to the U.S. Electronic Signatures in Global and National Commerce Act (E-SIGN Act) of 2000, an electronic signature is “an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a person with the intent to sign a record.” The passing of the bill granted electronic signatures the same legal status as wet signatures.
Another bill that governs the use of electronic signatures in the U.S. is the Uniform Electronic Transactions Act (UETA) of 1999. The act secures the legality of both commercial and government transactions. While the E-SIGN Act is a federal act affecting all 50 states, only 47 states adopted the UETA; Illinois, New York, and Washington have their own bill on electronic signature.
An electronic signature can be typing your name at the end of an email, attaching an image of your handwritten signature, clicking on “agree” or “disagree” button on digital contracts, using a Personal Identification Number (PIN), and signing using a touchscreen device such as a smartphone or tablet.
Digital signatures, a type of electronic signature, use Public Key Infrastructure (PKI) technology, reducing the risk of fraud. Moreover, businesses that provide electronic signature solutions abide by the highest levels of security, following global standards.
The use of electronic signature solutions results in efficiency and an increase in productivity. For businesses, they can achieve their goals faster and with less effort, as they can sign documents in minutes. Apart from the improvement in the way companies operate, electronic signature solutions help eliminate paper, printing, and mailing costs. By going paperless, they can save money and designate it for operational improvements.
Manual or wet signatures require a person to mark a document physically using a pen. It is the traditional way of signing papers and has been around for many centuries. In general, a wet signature is a name in cursive or any distinct mark or symbol. In some cultures, there are individuals who use a name or wax seal as their signature.
As one of the necessary components to guarantee a rule-based society, individuals often use wet signatures to authenticate cheques, contracts, and printed legal documents. While a handwritten signature is still one of the most used ways to make a document legally binding, it is not safe from forgery.
While the common practice is to sign a document in front of a witness, the arrangement is not foolproof as some contracts do not include the information of the witness and in some instances, the witness may deny or forget witnessing the transaction.
Electronic signatures vs manual signatures
Both electronic and manual signatures are legally binding, provide authentication, and protect individuals from illegal activities. However, in terms of efficiency and ease of use, their advantages vary.
While electronic signatures provide better protection against fraud by using complex security systems, wet signatures are more straightforward and easy to complete.
All in all, the decision to use electronic or manual signatures depends on many factors, including ease of use, the required level of security, and acceptable cost.