You need to sign a contract for someone in another state, and you don’t want to deal with paper copies. Will your electronic signature hold up? Yes, but only if you make it right. E-signatures are legally recognized across all U.S. states and territories. Keep reading to discover the electronic signature legality criteria and key exceptions to watch out for.
Key takeaways
- Electronic signatures are legally recognized for online document signing across all U.S. states under the ESIGN Act, and most states also follow the UETA.
- Wills, court documents, and some family law forms require a handwritten signature.
- To be legally valid, an electronic signature must have: intent to sign, consent to conduct business electronically, attribution to the signer, record retention, and secure storage.
- CreateMySignature helps you create a reusable signature image for signing digital documents online.
Important: This guide covers only U.S. electronic signature law without taking a deep dive into state legislation. If you have a jurisdiction-specific question or the document you need to sign comes with high stakes, consult a qualified attorney.
The ESIGN Act and UETA: The two laws that govern e-signatures
| Compare | ESIGN Act | UETA |
|---|---|---|
Definition | A federal law adopted in 2000 that establishes the legality of electronic signatures in intrastate and international transactions | A model state law drafted in 1999 that sets the cross-state standards for electronic signatures and records |
Key differences |
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|
Where they overlap |
| |
Applicability | Takes precedence in states that haven’t adopted the UETA | Takes precedence over the ESIGN Act in states with both on the books |
In the United States, two laws establish electronic signature legality: the Electronic Signatures in Global and National Commerce Act (ESIGN Act) and the Uniform Electronic Transactions Act (UETA). Together, they put electronic signatures on equal footing with wet ones, albeit with some exceptions. In layman’s terms, they state that a signature can’t be refused or deemed invalid just because it was added using electronic means.
UETA
Drafted in 1999, the UETA is a model state law meant to harmonize standards across state lines. As of writing, 49 states, D.C., Puerto Rico, and the U.S. Virgin Islands enforce it. New York is the only state that doesn’t have it on the books; however, the state has its own law to regulate electronic signatures. California and Illinois adopted the UETA with modifications.
ESIGN Act
The ESIGN Act, in turn, is the federal law that made electronic signatures legally binding in all U.S. states and territories. Enacted in 2000, the ESIGN Act is a spiritual successor to the UETA, even using the same legal enforceability criteria and having similar exceptions. However, unlike the UETA, it’s not optional for states: they must adhere to the federal law’s provisions within their own state legislation.
What counts as an electronic signature?
Both the UETA and the ESIGN Act define it as any electronic symbol, sound, or process used with the intent to sign and attached to or associated with a record.
In practice, it can mean anything from clicking “I Agree” on a website to adding an image with your signature to a document. Both laws do not favor any specific technology.
In 2036, UETA and ESIGN already recognize contracts formed through automated systems and software agents. They treat blockchain, digital signatures, future technologies, and traditional electronic signatures the same way. If software acts on your behalf, the resulting contract can still be legally enforceable.
That said, some methods may not meet all five electronic signature requirements laid out below.
Five requirements that make an electronic signature legally valid
While electronic signatures are legally binding across all U.S. states under the ESIGN Act, you might still have to prove your signature’s validity if it’s challenged. In that case, it falls on you as the signer to demonstrate that your signature satisfies five criteria: intent to sign, consent, attribution, record retention, and secure storage.
Here’s what these five validity criteria mean in practice:
- Intent. You had a clear intent to sign the electronic document using whichever method you chose for that purpose.
- Consent. All parties have agreed to conduct business electronically.
- Attribution. It’s possible to attribute the signature to a specific person (in this case, you).
- Record retention. Parties can retain the signed document in a retrievable form for future reference.
- Secure storage. Parties can access the signed document in the future if needed.
What if you manually add an image with your handwritten signature to a document? Well, it can be used to confirm your intent to sign and your consent to do so electronically. Record retention and attribution, however, are trickier to demonstrate. They usually require an audit trail that can be created with a dedicated e-signature tool.
Documents that cannot use electronic signatures
As we’ve mentioned above, both the UETA and the ESIGN Act cover most business documents and consumer transactions, but they do exclude certain documents. For them, an electronic signature can’t be used instead of a wet signature. That said, these exceptions are few and relatively rare.
So, what are the exceptions? In most U.S. jurisdictions, they involve these six categories of documents, which can’t be signed electronically:
- Wills and codicils. The ESIGN Act and the UETA don’t apply to wills and testaments, as they don’t involve another party in the signing process.
- Court documents. These include court orders, notices, briefs, pleadings, and more.
- Certain family law documents. Papers concerning matters like adoption and divorce proceedings usually require a wet signature.
- Certain notices. Eviction, foreclosure, repossession, default, and other notices require a wet signature when they concern the primary residence. The same goes for notices canceling or terminating utility services (e.g., water, heat, power).
- Documents to be notarized. These can involve powers of attorney, real estate transfers, affidavits, and court-related forms.
- Some insurance documents. They include documents that concern canceling or terminating health or life insurance contracts.
These exceptions are narrow, with the ESIGN Act and the UETA covering documents for most B2B and B2C transactions. That goes for most employment documents, financial and real estate transactions, and government procedures.
In most U.S. jurisdictions, you can sign these documents with an electronic signature:
- Employment agreements
- NDAs, non-competes, and confidentiality agreements
- HR and consent forms
- Business and vendor contracts
- Purchase orders
- Invoices
- Lease agreements (with some exceptions)
- Loan documents
- Insurance applications
Note: Exceptions to the UETA and the ESIGN Act may vary from one state to another. Verify your state’s regulations before making a judgment call and seek legal advice if necessary.
Why audit trails strengthen legal defensibility
Pasting a transparent PNG of your signature into a file can document your intent to sign it, but it may not hold up in court. If it’s challenged for any reason, you have to prove your signature meets the five criteria we listed above. In that case, you need an audit trail: a verifiable record that proves the signer’s identity, consent, and signature time and date.
If you add a signature to a PDF with an e-signature platform, it automatically generates evidence of how the document was signed to satisfy those five requirements. That includes your IP address, a timestamp, your email address, and your recorded consent to sign the document electronically.
Don’t have a signature image yet? Draw or generate one with CreateMySignature.
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