The COVID-19 pandemic may mark the end of an era of hesitation or resistance from lawyers about the use of cloud services and products. We are all now forced to rely on remote access programs and other technologies to help us do our work from home. Gone are the days when lawyers have clients come into their office to sign their engagement agreements and other forms. Of course, lawyers may still email the documents to clients, then wait for them to print, sign with a pen, scan, and email back to the lawyers. All of this is assuming that clients have equipment at their home to print and scan. Even if they do, that process unnecessarily delays something that can be done within minutes, given the right technology.
That technology, which so many businesses have already used, is electronic signature.
Electronic Signature v. Digital SignatureBefore discussing different electronic signature (eSignature) options, let’s distinguish between an eSignature and a digital signature. These two types of signatures may seem like the same thing, when, in fact, they are different and shouldn’t be used interchangeably.
Electronic SignatureElectronic signature is defined by the U.S. ESIGN Act as an “electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.” It’s a broad term that refers to any electronic process that indicates an intent to accept the content of a document. Think of it as a digitized version of your handwritten signature. Users can sign documents online by drawing their signature with their mouse, stylus or finger, type a signature, or upload a signature. In the United States, eSignatures are legally binding and have the same legal status as handwritten signatures due to the ESIGN Act and Uniform Electronic Transactions Act (UETA). (Oregon adopted the UETA in 2001.) Any company that offers electronic signature service in the U.S. must comply with the ESIGN Act and UETA. If eSignature is offered in other countries, the company must comply with that country’s eSignature laws.
A critical component of electronic signature is the authentication of the signers. The signers must be the person they claim to be and the signature must really be theirs. This is typically done by sending an eSignature request to the signer’s email address. That request, along with other information, is tracked and recorded. Some eSignature companies offer enhanced authentication that requires the signers to use a password, some sort of ID, phone PIN, or other methods to further verify their identity before the document can be opened and signed. Keep this in mind as we move to digital signatures.
Digital SignatureDigital signature is a type of electronic signature with one important difference in the signer authentication method. Digital signature relies on something called “Public Key Infrastructure” (PKI) to generate a public and private key to identify the signer. This person signs the document using her private key, which only she has. She uses this private key to encrypt her signature. She then provides her public key to the person requesting her signature. This public key is used to decrypt her signature. If the public key cannot decrypt the signature, that signature is not valid. In order to use a digital signature, both the signer and person requesting the signature need to have their own registered digital certificate issued from a certificate authority to verify their identity. The use of PKI and digital certificates makes digital signature the most secure type of electronic signature because they bind the signature to the document using encryption and guarantee that the signature on the document is authentic.
While both electronic and digital signatures are valid and binding, many people prefer the former due to the hassle and cost of digital certificates. Below is a comparison chart of some common electronic signature services. Some of the features you may want to pay attention to include:
Pricing – this is the cost of the basic plan, which usually comes with limited features. Additional features come with the upgraded, more expensive plans. It’s important to look through the features at their website to determine whether or not you need them.
Users – the number of people who can use the license based on the plan.
Digital signature option – users may opt to use digital signatures, but will need to pay for digital certificates and other associated costs.
Send documents and request signatures – allows users to email the document to signers and request their signatures.
Basic authentication – offers single-factor authentication of the signers, typically by their email address.
Enhanced authentication – offers options to enhance the authentication of the signer, such as multi-factor authentication methods.
Audit trail – keeps a detailed log of each step of the transaction that includes the parties’ names, email addresses, IP addresses, signature time stamps, etc.
Security & compliance – information regarding how companies secure and store e-Signed documents and their compliance with various eSignature laws are provided in the hyperlinks.
Electronic Signatures for Oregon eCourtThe Oregon Judicial Department (OJD) recently made some changes to UTCR 21.090 that allow eFilers to submit declarations that are electronically signed by non-filers (i.e., represented parties and non-party declarants). The OJD’s definition of electronic signature is borrowed from the UETA. This means eFilers can use any commercially available electronic signature software that comply with the UETA. The OJD posted its recent eFiling Update webinar on electronic signatures, among other topics, that you can watch on YouTube by clicking here.
Click here for a PDF version of the chart with clickable hyperlinks.
Updated on 4/29/20 to include information regarding eCourt electronic signatures as requested by OJD.