Electronic Signatures & Global Compliance

Version 01/26/2023

Introduction

Electronic signatures are changing the way people conduct business because it allows companies to get deals signed and closed faster and more efficiently all while maintaining compliance. If your organization wants to utilize this function in a broader scope, then it’s good to be aware of where electronic signatures are accepted and, if necessary, enforceable in court.

This guide will cover the different types of electronic signatures, electronic signature laws, and take a deeper look at the following countries and regions: United States, Canada, European Union (EU), United Kingdom, Australia, Mexico, and Brazil. It will also share details on Sertifi’s most frequently asked questions.

Note: The information in this document is intended to be a helpful guide that highlights best practices when implementing electronic signatures on a global scale. Note the information in this document is for general purposes only. It is not considered legal advice. Consult with your Legal team to ensure you are complying with the laws enforced in the country that you choose to conduct business with. Since laws continue to change, Sertifi, cannot guarantee that all the information in this document is current. This is not intended to be an exhaustive or in-dept list of the abiding laws and countries where electronic signatures are legal.

eSignature vs. Electronic Signature vs. Digital Signature

There’s a common misconception that electronic signatures and digital signatures are the same, but there are some differences between the two.

The terms eSignature and electronic signature can be used interchangeably. An electronic signature is captured on an electronic device, such as a computer or cell phone, and is deemed equivalent to a written signature depending on the use case and country. For the sake of simplicity, we will use the term “electronic signature” throughout this document.

However, a digital signature is more than merely an electronic signature. Digital signatures have encryption technology that ensure the integrity of the signature that has been captured. The technology underlying the signature also verifies the authenticity of a signed document and binds the signature to it. Digital signatures use a standard, accepted format, called Public Key Infrastructure (PKI).

Three Types of Electronic Signatures

Simple Electronic Signatures: This type of electronic signature is technology-neutral, which means any electronic form or technology is generally accepted. This type of electronic signature should:

- show the intent of the signer
- be completed by the person associated to the signature
- be permanently associated to the agreement the signer intended to sign

Advanced electronic signatures: This form of electronic signature adds additional requirements above simple electronic signatures. This type of electronic signature must:

- be uniquely linked to signer
- identify the signer
- be under sole control of signer
- detect changes to the document or data after the application of the electronic signature

Qualified electronic signatures (also referred to as Digital Signatures or Certificate Signatures): The certificate electronic signature or the digital signature (or the qualified electronic signature in the EU) is an advanced electronic signature that uses a digital certificate issued by an accredited Certificate Authority as a secure, personal electronic identity credential. The unique digital certificate must be issued to an individual in a form they can keep under their control. An electronic signature based on a digital certificate meets the requirements for simple and advanced electronic signatures.

Three Types of Electronic Signature Laws

“Minimalist” laws allow for the broad enforceability of electronic signatures with few legal restrictions. Under such law, handwritten signatures, digital signatures, and all other forms of electronic signatures have the same legal status.

Countries with minimalist laws, like Australia, Canada, and the United States, have no technology requirements or electronic signature types that receive special legal status. With some exclusions, minimalist laws permit the use of electronic signatures for almost all uses.

Simple electronic signatures are commonly used in these countries.

“Two-Tier” laws accept electronic signatures as legally admissible, and enforceable, but recognizes authenticated digital signatures or qualified electronic signatures as possessing a greater evidentiary weight over electronic signatures in specific transactions.

The qualified electronic signature has special legal status and may be legally required for a few, specific transaction types. However, documents executed using simple electronic signatures are still submitted as evidence in court, if the party presenting it has enough evidence to prove that it’s valid. It’s important to know that even though these laws may command a specific process to create digital signatures, most of these countries also permit private parties to agree between themselves what will be an acceptable form of signature.

Most of the European countries and South Korea have enacted two-tier laws.

“Prescriptive” laws dictate specific technical methods to electronically sign a document, typically digital signatures. They might even dictate which electronic signature solutions are acceptable. Very few countries have adopted a prescriptive law for electronic signatures.

Additional Resources

Speak with your Legal team before using electronic signatures. When in doubt, it may be helpful to incorporate a clause in your agreements to increase the likelihood of enforceability in that specific country. For additional information on the laws pertaining to electronic signatures, refer to the following resources:

A Look at Global Electronic Signature Laws

United States

Electronic signatures have been widely accepted as a legally binding way to sign a contract since 1999. With the passing of both the Uniform Electronic Transactions Act (UETA) in 1999 and the Electronic Signatures in Global and National Commerce Act (ESIGN) in 2000, this established the legal use of electronic signatures and records in commerce.

Both laws indicate that electronic signatures and records carry the same legal binding effect and enforceability as a traditional handwritten signature and paper document. Both establish that a “transaction may not be denied legal effect, validity, or enforceability solely because it is in electronic form.”

Every state has adopted an electronic signature law, and 47 states have enacted a version based on UETA. States that have not adopted UETA are Illinois, New York, and Washington, but they have adopted their own electronic transaction laws. It’s always best to get consent from the involved parties to ensure they are comfortable with accepting an electronic signature as a valid way to sign and accept a contract.

Restrictions: In some cases, an electronic signature cannot be recognized as an appropriate way to conduct business. This can apply to wills, life insurance benefits, adoption documents, and divorce agreements. This is simply a short list of use cases and should be not considered a detailed list.

Canada

Enacted in 1999, the Uniform Electronic Commerce Act allows businesses to recognize electronic signatures as a valid and legal way to sign a contract equivalent as a handwritten signature. As with the United States, Canada considers electronic signatures to be legally enforceable. Contracts are treated as valid if all involved parties reach an agreement, regardless if it is verbally, electronically, or in paper form.

Always obtain consent from all parties before opting to conduct business electronically.

Restrictions: There are some exclusions where an electronic signature does not carry the same weight as a handwritten signature. This can apply to wills, trusts, and domestic contracts, such as marriage. It’s also important to note that the laws might vary depending on the province.

For further guidance on the acceptance of electronic signatures within each province, consult with your attorney or visit the Canadian Legal Information Institute.

European Union

With the passing of the Electronic Identification and Trust Services Regulation No 910/2014/EC (eIDAS) and officially going into effect in 2016, an electronic signature is equivalent to a handwritten signature. This law provides a standardized legal framework for businesses who wish to utilize electronic signatures anywhere in the EU. This law is also applicable to countries in the EU who wish to do business with their EU counterparts.

Article 25 of the law states that “An electronic signature shall not be denied legal effect and admissibility as evidence in legal proceedings solely on the grounds that it is in an electronic form or that it does not meet the requirements for qualified electronic signatures.”

Prior consent should always be given before proceeding to do business digitally.

Restrictions: There are circumstances where an electronic signature may not be legally binding. Instead, a written signature would be required for a contract to be treated as valid. Some possible use cases could include domestic and/or family-related contracts, such as a marriage or separation contract, HR-related document, such as a termination notice, and a mortgage agreement. This can vary with each country in the EU. Refer to the specific country’s legal site for more information.

United Kingdom

The United Kingdom has recognized electronic signatures since 2002 with the passing of the Electronic Signatures Regulations. An electronic signature holds the same legal weight as a handwritten signature. Contracts cannot be denied because they are handled electronically. The UK does not indicate that there is a special legal status for different types of electronic signatures either. So, all electronic signatures are treated with equal status. Also, the Regulation (EU) No 910/2014, also known as the eIDAS Regulation, which went into effect on July 1, 2016, applies to all countries in the EU.

Restrictions: As with other countries, there are some cases where an electronic signature may not have legal status, therefore, a handwritten signature would be more appropriate. These can include various lease documents, prenuptial agreements, separation agreements, and property-related documents.

For more information on the United Kingdom’s rules regarding electronic signatures, you can also refer to The Electronic Identification and Trust Services for Electronic Transactions Regulations 2016.

Australia

The use of electronic signatures has been accepted by law since 1999 under the Electronic Transaction Act. Similarly, to the United States, Canada, and the United Kingdom, electronic signatures have the same legal status as a written signature and can be considered enforceable in court. Contracts are valid if all involved parties reach an agreement, regardless if it’s verbally, electronically, or in paper form.

Restrictions: Note that The Electronic Transactions Acts of the Commonwealth, States and Territories of Australia, has some exclusions pertaining to the use of electronic signatures. As with all countries, there are some situations where an electronic signature is not deemed to be an appropriate way to enforce a contract. These can include wills, certain documents related to life insurance, and property-related transactions.

For further guidance on the acceptance of electronic signatures within each state and territory, speak with your attorney or visit the Australasian Legal Information Institute.

Mexico

Mexico has no uniform law on electronic signatures, instead, electronic signature legality is governed by many applicable laws and regulations set forth by several legal bodies. The Code of Commerce, Federal Civil Code, Federal Code on Civil Procedures, and other laws contain amendments and provisions governing the use of electronic signatures.

The law has a tiered method of legality, accepting both electronic and digital signatures. Mexico may require certification of official documents and tax-related documents to be completed with a digital signature. Common use cases of electronic signatures include consumer agreements, commercial and civil contracts, privacy notices, and commercial agreements between companies that belong to the same corporate group such as non-disclosure agreements.

Restrictions: There are specific types of documents that are not appropriate or allowed to use electronic signatures. For example, the notarization of real estate agreements, marriage contracts, powers of attorney, etc. Additionally, it’s advisable to have your Legal team perform a risk assessment for the following types of agreements: promissory notes, guarantees, mortgages, civil status acts, etc.

Brazil

Electronic Signatures have been recognized by law in Brazil since 2001, with the passage of Medida provisória 2.200-2. Specific technology is not required for an electronic signature to be considered valid under Brazilian law aside from specific, government-regulated scenarios. For these regulated cases, Brazil has a robust Certificate Authority infrastructure in place, ICP Brasil. ICP Brasil maintains the root Certificate Authority and requirements that must be met for both government-recognized timestamping and Public Key Infrastructure (PKI) signature policies.

Due to the struggle of distributing and maintaining card or token-based digital certificates, use of ICP Brazil-backed electronic signatures in Brazil are commonly limited to high-value and high-volume transactions including foreign exchange transactions, factoring, and transactions directly with the Brazilian government. Electronic signatures are being widely used by courts and lawyers in the context of lawsuits and legal procedures.

In Brazil, simple electronic signatures are generally used for documents like commercial agreements such as invoices and sales and service agreements, and software license agreements.

Restrictions: There are specific types of documents that are not appropriate or allowed to use electronic signatures such as notarization of lease contracts, license of patents, real estate transfer, banking agreements, social security cards, and foreign exchange currency agreements.

Recommendations

Below are the countries that have high to low adoption rates surrounding eSignature tools. As mentioned earlier, this is not to be considered as legal advice.

Group 1: Countries where electronic signatures are the legal equivalent of a written signature under law. These countries follow a very similar regulation to the ESIGN Act including EU Directive 1993/93/EC, PIPEDA, and the Electronic Signature Act 1999. These countries are: Argentina, Australia, Belgium, Bermuda, Canada, Chile, Colombia, Czech Republic, Finland, France, Germany, Hungry, India, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Singapore, South Africa, Spain, Sweden, Switzerland, Thailand, United Arab Emirates, United Kingdom, United States, and Uruguay.

Group 2: Countries where electronic signatures for business are deemed enforceable, but adoption is low. These countries are: China, Hong Kong, Indonesia, Israel, Malaysia, Mexico, Republic of Korea, Taiwan, and Turkey.

Group 3: Some countries do not have clear legislative rules surrounding the use of electronic signatures so it’s best to be cautious if there’s an interest in conducting business with the following countries: Peru, Philippines, Russian Federation.

Please speak with your Legal team before utilizing eSignatures with businesses in any of these countries. And when in doubt, it may be helpful to incorporate a clause in your agreements to increase the likelihood of enforceability in that specific country.

Frequently Asked International Questions

Q: How can I ensure electronic signatures will be enforced in the event of a dispute?

Sertifi provides a complete audit trail for all transactions that records all workflow events including every time a document is accessed and signed along with the date, IP address, email address, hash record, and signing methods. All signed documents are hashed using SHA-256 to verify the integrity of the document and signatures. By having this electronic evidence, electronic signatures prove to be more secure than traditional ink signatures on paper.

While laws can vary, electronic signatures are legal, trusted, and enforceable in industrialized countries around the world.

Q: Does Sertifi offer digital signatures?

No. Sertifi does not offer digital signatures. However, Sertifi offers advanced electronic signatures through user authentication which can prompt a signer to verify their identity before a document can be opened and signed. For example, the signer must input the correct password or answer a question accurately.

Q: What types of user authentication does Sertifi offer?

Email Authentication: Validates the signer’s email address and IP address
Log-in Authentication: Validates access by requiring a log-in ID and password
Password Authentication: Validates access to signing documents based on a password or data known by the sender
Knowledge-Based Authentication: Validates the signer’s identity through a series of questions and answers

Q: What certifications does Sertifi have?

Sertifi provides Enterprise-grade security through a combination of leading-edge technology, internal expertise, and certification reports. Sertifi is certified and an active participant of the EU-U.S. Privacy Shield Framework and Swiss-U.S. Privacy Shield Framework. Other certifications include Payment Card Industry Data Security Standard (PCI-DSS) compliance, General Data Protection Regulation (GDPR) compliance, Salesforce AppExchange certification, SOC 1 compliance, SOC 2 compliance and HIPAA compliance. Sertifi is also listed on the CSA and Veracode Verified registries.

Q: Where is Sertifi used globally?

Sertifi offers the fastest and most secure way to close business. Sertifi has more than 9 million users worldwide in more than 135 countries around the world. We’ve been the long-standing partner for many large organizations such as Marriott, Topgolf, and AEG Worldwide.

Q: Other than English, what languages does Sertifi support?

Languages available for your signers include:

French
French (Canadian)
Italian
Spanish (Latin America)
Portuguese (Brazil)
Polish
German