Are electronic contracts valid? What about an electronic signature? The short answer is yes, in general, electronic contracts and signatures are valid and can create legally binding obligations just like a traditional contract written on paper.
47 out of 50 states, including Pennsylvania, have enacted the Uniform Electronic Transactions Act (UETA), and the remaining three states have similar statutes that govern the validity of electronic documents, including contracts and signatures.
As enacted in Pennsylvania, UETA states the following regarding legal recognition of electronic records, electronic signatures and electronic contracts, so long as both parties have agreed to conduct transactions by electronic means:
(a) FORM.– A record or signature may not be denied legal effect or enforceability solely because it is in electronic form.
(b) FORMATION.– A contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation.
(c) WRITING.– If a law requires a record to be in writing, an electronic record satisfies the law.
(d) SIGNATURE.– If a law requires a signature, an electronic signature satisfies the law.
73 P.S. Section 2260.303.
You may have heard the (commonly confused) terms “electronic signature” and “digital signature.” Here’s a breakdown of the differences between the two:
An electronic signature is defined by Pennsylvania law as “an electronic sound, symbol or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.” 73 P.S. Section 2260.103. Simply put, any signature or mark that is in electronic form and evidences your acceptance of terms, such as when you sign using your finger or a stylus in the checkout line to pay for your coffee or groceries, or clicking a box that says “I agree” on a website or in a software application.
A digital signature is a subset of the larger category of electronic signatures, with additional security measures included which uniquely identifies the signer and the document. Think of an electronic signature as a distinctive identifying mark, based on international standards designed to ensure secure implementation. A digital signature can be created using a variety of online services and software applications.
Did you know you can create your very own electronic signature on your iPhone or iPad?
If you have an iPhone or iPad and you’re tired of printing PDF documents in order to sign them, you’re in luck. Save a tree and quickly sign and return documents in the Mail app in iOS 9 (the latest version of Apple’s mobile operating system) by following these simple steps:
- Open the Mail application.
- Open the email containing the PDF attachment that needs to be signed.
- Scroll to the bottom of the email, and tap on the PDF attachment icon.
- Once the PDF attachment is open, tap on the toolbox icon in the lower right corner of the screen.
- Tap on the signature icon in the lower right corner of the screen. You also have additional markup options, including drawing, highlighting, or inserting text (such as a date) from this screen.
- Create a signature by drawing it with your finger on the screen, then tap Done in the top right corner.
- Resize the signature if necessary to fit in the space you’d like to place it by tapping and dragging the corner of the signature window.
- Tap and drag the signature to place it in the appropriate place on the document. You can also change the color of the signature by tapping a different color at the bottom of the screen.
- Tap Done in the top right corner.
- Finish drafting the email reply, which will include the signed document, and tap Send.