Compliance & Legal Validity

The first question that comes to mind when trying to switch from the cumbersome and time consuming traditional wet signatures to eSignatures is - Is eSignature legally valid? Then the next question is - Is your company compliant with the applicable legal validity regulations? The answer for both the questions is a big YES. eSignatures or electronic signatures are very much legally valid. As for our company it is not only compliant but also has a lot many advantages

In India, for instance, eSignatures and Digital Signature Certificates (DSC) both are valid forms of electronic signature.

In fact most countries and laws consider even oral contracts to be legally binding agreements. Though oral contract has legal validity, One of the challenges with them is providing evidence of the agreement's terms in case of a dispute. Without a written document, it can be challenging to establish the exact terms of the contract, leading to potential disagreements between the parties.

Due to recent developments in the world, online processes are taking more prominence and more and more offline processes are going online.

Here are the laws & regulations that define the legal validity in a few countries listed below as representative examples.

  • Information Technology Act (ITA) 2000 (India)
  • eIDAS Regulation (Europe)
  • Electronic Signatures in Global and National Commerce Act (ESIGN Act) enacted in 2000, as well as the Uniform Electronic Transactions Act (UETA) (USA)
  • Electronic Transactions Law (ETL). The ETL, enacted in 2007 (Saudi Arabia)
  • Federal Law No. 1 of 2006 concerning Electronic Commerce and Transactions (eCommerce Law) (UAE)
  • Electronic Commerce and Transactions Law No. 16 of 2010 (Qatar)
Broad elements for eSignatures to be valid are listed below which are defined in the above laws, though they may vary a bit depending upon a specific country.
  1. Intent to Sign: The signer demonstrates an intent to sign the document electronically.
  2. Document sent should be authenticated and linked only to the recipient.
  3. Consent of the parties for accepting the eSignature as binding upon them.
  4. At the time of signatory, the signee should have full control over the data to generate the electronic signature.
  5. If there is any tampering of the signature data after attaching such signature, it should be detectable.
  6. Reasonable security protocols.
  7. Audit trail for traceability.
Some of the areas/documents* where eSignatures are invalid (This is just a representative list. Scenarios, requirements, geographies etc. may be different. Please consult your attorney for a contextual comprehensive list) -
  • A negotiable instrument other than cheque
  • Power of Attorney
  • A trust
  • A Will including any other testamentary disposition
  • A contract for the sale of real estate or immovable property
  • Notarization and Witnessing
  • Governmental or Regulatory Forms

Please note that this information is provided as a general overview and does not constitute legal advice. We encourage you to consult with legal professionals for specific guidance regarding your unique circumstances.