One of the most significant business innovations of the last fifty years is the electronic digital signature. This technology was first developed as an idea in 1976, with an initial version released in 1977. However, it wasn’t until 1988 that digital signatures started being used in software applications. Now, electronic signatures that are legally binding are available across a variety of programs and platforms.

While most people have used a digital signature at some point to sign their names to an online document, the vast majority don’t understand how they work. That’s understandable!

To ensure our customers are familiar with the ins and outs of these useful security features, we’ll explain how electronic signatures work and what about their use makes them legally binding.   

How does an electronic signature work?

An electronic signature that’s legally binding works by following a unique protocol called public key infrastructure (PKI). Whenever a person signs an online document, the platform they’re using to sign creates two separate keys, one public,  one private.

The person signing the document keeps the private key, which they use to create the signature. As soon as they sign, an algorithm creates and encrypts a hash that identifies the signature’s owner using their public key, and the time the document was signed. Once it’s transferred elsewhere, if the signature can’t be attributed correctly by the algorithm, the signature is invalidated.  

The secure nature of the algorithm and the PKI means electronic signatures can be used on a variety of highly sensitive documentation without worrying about whether the signatures are valid.  

Electronic signature guidelines

Separate from the technical workings of electronic signatures, there are a variety of other guidelines in place that dictate whether these signatures are valid.

1. The signer must have a clear intent to sign the document. If they were tricked or coerced, the signature isn’t legal.

2. The signer must consent to sign electronically.

3. The signature must be correctly attributed to the signer (usually by using PKI or another technology).

4. The signature must be protected and not separated from the document at any time.

5. A copy of the contract or document must be sent to the signer.

6. A signed copy must be kept secure, so it can be reproduced when required.

7. The signer should always be able to opt out of signing a document online and sign a hard copy instead. 

Include an electronic signature clause in your waivers

One of the best ways to ensure your waivers and documents follow all the necessary electronic signature guidelines is to include an electronic signature clause in your contracts.

This simple clause outlines your agreement with the signer to sign the contract electronically. By signing this clause, the client or signer agrees they have consented to sign electronically rather than on a hard copy and are satisfied with how you are executing the agreement.

Efficiently execute waivers for your business with WaiverForever

Stop wondering, “Are my electronic signatures legally binding?” With WaiverForever, it’s easy to create and execute simple waiver forms that use the most secure PKI technology to guarantee all signatures are legally binding.

From there, waivers are stored in our secure cloud storage facility, so they’re accessible 24/7 and virtually impossible to delete or destroy.

Want to see how it works for yourself? Try a free trial of WaiverForever today.