A basic guide to signing contracts electronically

The use of electronic signatures or “eSignatures” to sign contracts is becoming increasingly common due to the convenience of online signatures as compared to traditional wet signatures. We are now accustomed to a few clicks on a website to order goods and it is no different for business customers ordering raw materials or finished products.

Types of eSignature

There are different levels of electronic signature:

1. The most basic is a simple electronic signature. This includes the ticking of a box to agree to terms and conditions on a website. It also includes applying an image of your usual signature to a document.

2. The next level up is an advanced electronic signature (AES) and fulfils the UK eIDAS security and authentication requirements. This is when a digital code is used that is uniquely linked to the signatory and is created using means that the signatory has sole control of.

3. The gold standard is a qualified electronic signature (QES). An AES is accompanied by a special qualified digital certificate that shows that the signatory’s identity has been verified by a qualified third party prior to signing.

What’s the difference and what should I use?

The first is cost. You would normally use an online signing platform such as DocuSign or Adobe Sign for eSignatures and unsurprisingly there is a higher fee for using QES.

In Scotland we have the concept of a probative contract (or also known as self proving). The benefit of a document that is probative/self proving is that it is presumed to have been granted by the signatory. So, if the contract later needs to be relied on in court or there is any dubiety about its validity, there will be a presumption that it has been properly signed and that the signature is that of the grantor.

A QES is considered to be probative/self proving so for any commercial contracts of significant value, this will be the better, albeit pricier, option.

Using electronic signatures

To sign under DocuSign or Adobe Sign is relatively striaghtforward – the document will usually be sent as a link within an email and to sign, you would simply click on the link and follow the instructions to apply your signature. There may be the option to type in your name as your signature, to draw your signature on the screen or to upload an image of your signature.