By David Rand, VP of Marketing
No pun intended, but electronic signatures andgo hand in hand. Companies use both to get approvals more quickly and close deals faster. If you’d like to use e-signatures in your business, start by creating an e-signature policy. Here are key considerations:
Acknowledge e-signature legality
Using e-signatures is perfectly legal. If anyone in your company needs convincing, cite the Electronic Signatures in Global and National Commerce (ESIGN) Act, which spells out the details.
Determine which types of agreements are OK to e-sign
When creating an e-signature policy, it’s best to start with agreements that are lower risk. Talk to your lawyers and management to determine what your organization considers lower risk. Popular low-risk documents include non-disclosure agreements and simple sales contracts.
Develop a notary policy
Can notaries sign electronically? The short answer is yes, according to The Uniform Electronic Transactions Act (UETA). So if your organization uses notary services, it’s likely you can adopt them as part of your e-signature process. Check UETA guidelines and contact The American Society of Notaries if you have questions.
Provide a consent to do business electronically
Because most e-signature laws require that you to get the consent of other parties to do business electronically, build an e-signatures consent clause into your workflow. Here’s a sample:
Please read the following information: By signing this document, you give your consent to electronic disclosures and to the use of electronic signatures. This CONSENT informs you of your rights when receiving legally required disclosures, notices and information from us and when using electronic signatures in connection with your transactions with us. By consenting to the electronic delivery of disclosures, you agree that we may provide electronically any and all communications to you. You are not required to receive notices and disclosures or sign documents electronically. If you prefer not to do so, you may request to receive paper copies and withdraw your consent at any time.
Offer an opt-out clause
Notice that the above sample language includes the opportunity for signers to opt out of using an e-signature. It’s important to provide this, as well as to include the process for signing documents by hand, so anyone who opts out knows how to send manually signed paperwork to you.
Understand the laws
There are typically three kinds of e-signature laws around the world:
- Minimalist laws allow e-signatures to be broadly enforced with few legal restrictions
- Two-tier laws recognize that certain authentication technologies provide better risk management, so users get stronger legal standing then those who don’t use those technologies
- Prescriptive laws restrict the types of signature technologies that are acceptable
Consider choosing governing laws from a country with minimalist laws—such as the United States, the United Kingdom, Canada, Australia, and New Zealand—to reduce restrictions on e-signature usage.
Use advanced authentication for higher risk agreements
To provide extra security for higher-risk agreements, consider using advanced authentication techniques such as:
- Knowledge-based authentication that requires signers to answer questions that prove their identity
- Customized passwords that signers create
- Phone authentication with live representatives
Communicate your e-signature policy
Once your policy is written and legally approved, communicate it to your employees, contractors, and anyone else who does business with you. Make sure to answer any questions about using e-signatures in daily workflow. After all, an e-signature policy is only as good as its users.