Electronic & Digital Signatures in the USA

Legislation

In the United States of America (USA), there are two main types of e-signatures, namely electronic signatures and digital signatures. 

An electronic signature in this context is defined as any electronic process that denotes or indicates the acceptance of a report or agreement, whereas a digital signature implies the use of a digital certificate issued by a trust service provider (or TSP) that is associated with the signature so as to authenticate the signee’s identity. The most common digital certificate is the CA or certificate authority. 

Two regulations relating to digital and electronic signatures prevail in the USA, being the ESIGN (Electronic Signatures in Global and National Commerce) Act and the UETA (Uniform Electronic Transactions) Act. Both were set in place in order to ensure that electronic contracts are valid and electronic signatures are defensible. Under both regulations and in most cases, electronic signatures carry the same legality weight as wet signatures. 

That said, two states, namely Illinois and New York, have not adopted UETA: 

Illinois

Even though Illinois hasn’t adopted UETA, the state has enacted its own e-signature law, which goes to favor certain types of e-signatures above others, deeming them more trustworthy according to the state’s own criteria.

The state of Illinois states that the “secure electronic signature” is the most secure type of electronic signature available and it should be presumed to be valid unless there is evidence to suggest otherwise. This type of electronic signature should be compliant with the following rules:

• created in a way that can be considered commercially reasonable under the given circumstances

• applied by all involved parties in a way that is both trustworthy and can be verified

• reasonably and in good faith as relied upon by all the involved parties 

• both parties agree that the signature is considered to be secure 

• created by way of an asymmetric algorithm that is certified by the Illinois secretary of state

• created with the use of a CA-issued valid certificate with the applicable standards set out by the Illinois secretary of state

New York

The state of New York, like Illinois, has also not adopted UETA. Rather, the Electronic Signatures and Records Act (or ESRA) established the legally binding nature of electronic signatures and that electronic and wet signatures are legally equivalent. 

The New York Office of Information Technology was established as a facilitator, which oversees electronic signatures. This office has also published a guide on best practices around the implementation of e-signatures under ESRA.  

Other States

States including Arizona, Tennessee, and Nevada have, almost 20 years since the adoption of UETA, amended this regulation locally so as to address both the emergence and adoption of new technologies, such as blockchain technology.

Documents considered valid with electronic signatures in the USA 

In general, any standard business documentation may be signed using electronic signatures. These can include documents such as: 

• work offer letters, updates to employee policy, and paperwork for new hires 

• NDAs, sales contracts, and statements of work 

• purchase orders 

• transactions for real estate

• applications and claims for insurance policies 

• student services

Documents considered valid with digital signatures in the USA 

• healthcare documentation in order to improve administrative processes efficiency (these must comply with the Health Insurance Portability and Accountability Act or HIPAA)

• contracts or agreements related to cryptocurrency 

• financial services 

• manufacturing in the case that processes need to be expedited
  

Documents that should only be signed with a wet signature in the USA

There are some cases where certain documents may not be signed digitally or electronically, or that come with very clear requirements, like wet signatures or formal notarial services, which are, for the most part, not compatible with e-signatures or digital transactions. Examples of these document include: 

• wills, codicils, and testamentary trusts

• adoption and divorce agreements

• court orders, notices, or official court documents

• contracts or documentation that is governed by the Uniform Commercial Code or UCC

• notices of default, acceleration, repossession, foreclosure, or eviction regarding primary residence

• termination of health or life insurance benefits

• health or safety recall or material failure notices of a product

• documentation for the transportation or handling of hazardous or toxic materials

Helpful Resources

• US government: Authentication

This page is intended to communicate general information and does not constitute legal advice. While we have made every effort to ensure that this information is both accurate and up to date, it may not necessarily represent the most recent version of the legal topics in question. No action should be taken based on the information provided herewith and Smallpdf and its employees disclaim all liability relating to any actions that are or are not taken in reliance upon this information to the fullest extent permitted by law. In the case of any questions or uncertainty regarding the legality of electronic and/or digital signatures in your country or area, please consult your local laws or a legal professional for advice.