Making Sure Your E-signatures Are Legal Worldwide

Jan 20

Electronic signatures have been in use since around 2000, and their legal standing was also defined in various statutes. These signatures were considered a strategic asset as they allowed for more flexibility between the parties involved.

When lockdowns came, electronic signatures turned from being an asset into a necessity. A survey conducted by airSlate showed an increase of about 50% in the use of e-signatures in 2020. As of this writing, many businesses and individuals still use e-signatures in their transactions.

In our current state where many businesses transitioned to remote or hybrid workplaces either temporarily or permanently, the importance of getting into binding agreements online is on the rise. However, many are still concerned about whether these e-signatures are legal, safe and valid in all the places covered in the contracts. In this guide, we will address these concerns. We've put together a useful guide that addresses the legality of e-signatures in certain places or jurisdictions. We've also briefly covered how to make international agreements in Confluence and Jira.

3 Types of Global e-signature Laws

Permissive Laws

In places with permissive laws, only a few restrictions apply and in most cases, e-signature is legal and enforceable regardless of how they were electronically signed. Countries with permissive laws on e-signatures which include the United States, Canada, Australia and New Zealand are generally technology-neutral and they consider e-signatures as equally important or binding as handwritten ones.

Prescriptive Laws

With prescriptive laws, e-signatures will only be recognized if it follows specific laws governing them. These laws are the strictest and most difficult to comply with because they require the right technology or software. Prescriptive laws are the rarest type of e-signature law, and they are enforced in India, Malaysia, Brazil and Israel among other countries.

Two-tier Laws

In countries that implement two-tier laws, electronic signatures are legal and valid. However, digital signatures carry more weight. They recognize digital signatures to have the same status as handwritten signatures. While you can use any technology for making electronic signatures, only approved technologies are allowed for digital signatures. There are also rules on how these signatures should be used.

The European Union along with South Korea, China and Thailand adopted the two-tier approach with the eIDAS regulation

Electronic signatures vs. Digital signatures

Many people use the term electronic and digital interchangeably. However, when it comes to electronic signatures and Digital signatures, there is a major difference between these two.

An electronic signature or e-signature is any electronic input indicating an intention to sign a document, not necessarily an actual signature. An electronic input could be entering your name in a name field, ticking a box or both. On the other hand, a digital signature is a type of electronic signature but it has an extra layer of security using a technology called public key infrastructure or PKI. This technology encrypts the signature to ensure that the signee is who they say they are.

In most cases, electronic signatures suffice.

E-signature laws around the world

E-signature law in the US (Standard: Permissive)

The ESIGN Act says that “if a law requires a signature, an electronic signature satisfies the law”. In the US, they give the same weight for electronic signatures and wet ink in most cases.

E-signature law in the EU (Standard: Two-tier)

The Electronic Identification, Authentication, and Trust Services (eIDAS) is the regulation that governs e-signatures in all 27 EU member states. This regulation sets out the criteria for what is considered a “qualified electronic signature,” which has equivalent evidentiary value to a handwritten signature.

These criteria for qualified electronic signature are:

the signatory should be linked to and identified uniquely with the signature
data for creating the signature should be under the sole control of the signatory
the signature should have a means for verifying that it has not been tampered with

Digital signatures come under the umbrella of qualified electronic signatures as they use the PKI technology which satisfies the three criteria.

In some countries, they require qualified electronic signatures on certain types of documents or contracts. For example, in Poland, you need to create a qualified electronic signature for employment contracts.

Although eIDAS puts greater weight on qualified electronic signatures, it also says that electronic signatures should still have legal effect as evidence.

E-signature law in the UK (Standard: Two-tier)

Post-Brexit, the UK still follows the eIDAS regulation. What this means is that all types of electronic signatures can be used as evidence, but they put the highest evidentiary value on eIDAS-compliant qualified electronic signatures.

E-signature law in Canada (Standard: Permissive)

In Canada, e-signatures are governed by the Personal Information Protection and Electronic Documents Act (PIPEDA). This law takes a broad approach and it allows any type of e-signature in almost any type of contract. In Canada, e-signatures are given the same weight as handwritten signatures.

Are most e-signature tools legal worldwide?

Yes, most countries recognize the legality of e-signatures. Countries can either have permissive, prescriptive, or two-tier laws, all of which recognize e-signatures. This is important for Confluence or Jira users because if you want to complete legal contracts in these platforms, you could simply use the Contract Signatures for Confluence or Contract Signatures for Jira apps which will ensure that your e-signature will be legal and valid in most jurisdictions.

One of the most popular signature apps available is DocuSign. However, this app requires you to export your Confluence documents and sign them in a different format and platform. With Contract Signatures for Confluence, the signing process happens in the same platform even if the person signing is not in Confluence. The same is true for Contract Signatures for Jira.

It is important to note that Contract Signatures for Confluence and Contract Signatures for Jira do not yet support qualified electronic signatures under eIDAS but they do support qualified electronic seals. Seals are considered an alternative to qualified electronic signatures. Legal entities use a seal for their various documents and it can be used by more than one person within the organization.

Contract Signatures ‘seals’ in documents and protect them against tampering. In Confluence or Jira, you also get an audit certification which includes important information such as timestamps, the IP address of the device used, and other information that will confirm the identity of the person who affixed the signature. There is also a link that verifies the authenticity of the signed contract.

Both the Contract Signatures for Confluence and Contract Signatures for Jira enable you to safely complete contracts that are legally binding around the world.