Electronic signatures and digital signatures are often used interchangeably in conversations, but they carry significant legal, evidentiary, and practical differences within the context of records management.
Electronic signatures are any form of endorsement or assent captured electronically and adopted with the intent to sign a document. They can include printed facsimiles of ordinary signatures, typed signatures, automatic signatures appended to the bottom of an email, or even a simple typed letter “[X].”
Digital signatures are a specialized type of electronic signature. They use a cryptographic protocol which employs public and private encryption keys to numerically “sign” a document. The signing process uses the private key unique to the signer in order to cipher the contents of the document and incorporate that data into the digital signature. Later, anyone with the public key can decipher the digital signature to verify that the document and signature are authentic. If the signature cannot be read, then the signature is invalid or the document has been altered. The digital signature process ensures that documents were actually signed or sent by the purported person at the specified time, and guarantees that the contents of the document have not been altered, tampered with, or falsified in any way.
While all types of electronic signatures meet basic legal signature requirements for routine use, companies wishing to set a higher standard should consider adopting a digital signature technology solution for their most important business documents and transactions. With greater controls on authentication of the electronic document, the risk of fraud, forgery, or legal challenge to the validity or enforceability of documents is greatly reduced.
In some jurisdictions, courts impute a presumption of authenticity to digital signatures, assigning them a status similar to a notarized signature or official seal. Many countries are also adopting explicit requirements that invoices, tax filings, government contracts, and public financial disclosures must be digitally signed.
Bring your business in line with emerging best practices and get a leg up on new laws and regulations by incorporating digital signature technology into your enterprise’s information governance program.
Disclaimer: The purpose of this post is to provide general education on Information Governance topics. The statements are informational only and do not constitute legal advice. If you have specific questions regarding the application of the law to your business activities, you should seek the advice of your legal counsel.