Are electronic signatures legally binding?

The two laws

ESIGN is federal and applies to transactions in or affecting interstate commerce; UETA is a model state law that almost every state has enacted, with New York using its own equivalent statute. Between them they cover nearly all commercial and consumer agreements. Neither law prescribes a technology: a typed name, a drawn signature, a click on a button and a cryptographic signature can all qualify. What matters is evidence that the person meant to sign, which is why a signature drawn with a finger on a phone and embedded in the document is on the same footing as one made with a stylus on a tablet in a bank.

The four conditions

Whatever the tool, an electronic signature is expected to satisfy these:

• Intent to sign. The signer took a deliberate act meaning to be bound, not an accidental tap.
• Consent to electronic business. Both parties agreed, expressly or by conduct, to sign electronically. Consumers get extra disclosure rules under ESIGN.
• Association with the record. The signature is attached to or logically connected with the document that was signed, so the pair cannot be separated.
• Retention. The signed record can be kept and reproduced by everyone entitled to it. Each party keeping a copy of the final PDF satisfies this in practice.

What is excluded

ESIGN and UETA leave out documents where the law wants ceremony or extra protection. Wills, codicils and testamentary trusts are the best known. Adoption, divorce and other family-law matters are excluded, as are court orders and filings, and notices that touch someone's home or utilities, such as foreclosure, eviction, repossession and cancellation of health or life insurance. Parts of the Uniform Commercial Code sit outside as well. State law adds its own list, and some states require a notary or witnesses for documents that can otherwise be signed electronically. If a document is on any of those lists, print it and sign it in ink.

How to sign well

Make the intention obvious and keep the evidence. Sign at the end of the document rather than on a separate page, date it, and have both parties sign the same version rather than two copies typed at different times. Send each party the finished file the same day, and keep the original: a PDF that neither side can edit is worth more in an argument than a photo of a screen. If the other party is a company, note who signed and in what role. None of that is required by statute; all of it is what a reader in two years will want.

When to reach for ink anyway

Beyond the excluded documents, use ink where a third party will insist on it. Many county recorders want a wet signature and a notary stamp on anything touching land. Some banks and insurers have their own rules. Certain vehicle title transfers are handled by the state motor vehicle department, which sets the form and may want the seller's signature notarised, whatever the bill of sale says. The rule of thumb: if someone official has to accept the document, ask them what they accept before you sign it electronically.