Electronic Signatures: The Definitive Guide

Key takeaways:

• Verify that your electronic signature implementation meets four core legal requirements: clear intent to sign from all parties, consent to transact electronically, logical connection between the signature and the document, and proper record retention with detailed audit trails.

• Select the appropriate electronic signature type based on transaction risk and regulatory requirements, using simple electronic signatures for routine documents, advanced electronic signatures when identity verification is needed, and qualified electronic signatures for high-stakes legal matters.

• Prioritize electronic signature platforms that integrate seamlessly with your existing contract management and business systems, maintain compliance with relevant laws like ESIGN and UETA, and automatically generate comprehensive audit trails for every signing event.

• Implement electronic signatures across high-volume business processes such as contract approvals, employee onboarding, vendor agreements, and NDAs to reduce signing cycles from weeks to minutes while maintaining full legal validity.

How many times have you found yourself chasing signatures through email chains, wondering whether that critical contract is sitting in someone’s inbox or buried under a stack of papers on their desk? You know the drill—print the document, scan it, email it, wait for a response, then hope the signed version makes it back to you without getting lost in transit.

Electronic signatures change that entire dance. Instead of hoping documents find their way through the maze of traditional paper-based processes, you can close agreements in minutes rather than weeks, a trend underscored by initiatives like the EU’s goal for 80% of residents to have a digital identity by 2030. This comprehensive guide covers how electronic signatures work, their legal foundation, and how they can transform your contract workflows. We’ll walk through the various signature methods, security considerations, and what you need to know to choose the right solution for your organization.

What is an electronic signature?

An electronic signature is basically the digital version of your pen-and-paper signature. It’s any electronic method you use to show you agree to the terms of a document or record. This could be anything from typing your name in a signature field to drawing your signature on a tablet to simply clicking “I agree.”

You’ll see electronic signatures everywhere these days—business contracts, legal documents, government forms, financial agreements, and plenty of other official records. The main advantage? Speed and convenience without the hassle of physical paperwork.

There are different types of electronic signatures, each with varying levels of security and legal recognition:

• Simple electronic signatures. These are the most basic type—you might type your name in a field, select it from a dropdown, or use an image of your scanned signature. You can also create one by drawing on a touch-enabled device.
• Biometric signatures. These use your unique physical characteristics, like a fingerprint or the way you write your signature on a touchscreen, to verify your identity. They offer stronger authentication than simple signatures.
• Digital signatures. These are the most secure option, using cryptographic technology to create a tamper-proof signature. They involve digital certificates from trusted authorities to link the signature to your identity and the document’s content. If anyone tries to alter the document after signing, you’ll be able to detect it. While technically different from electronic signatures, people often use the terms interchangeably.

The key thing to understand is that electronic signatures give you a modern, efficient way to handle document signing while reducing your reliance on physical paperwork and enabling smoother digital workflows across different industries.

How to create an electronic signature

So, how do you actually make one? It’s simpler than you think. You don’t need to be a tech wizard. Most of the time, you’ll be using a platform that walks you through it. The two most common ways you’ll do this are by typing or drawing.

Typing your signature

This is the quickest way. You just type your name into a signature field, and the software converts it into a stylized signature. You can usually pick from a few different font styles to make it look a bit more like a real signature. The key thing here isn’t how it looks, but the secure data trail the platform creates behind the scenes to prove you’re the one who signed.

Drawing your signature

If you want something that looks more like your wet ink signature, you can draw it. Using your mouse, trackpad, or even your finger on a touchscreen device, you can create a freehand version of your signature. The platform captures this image and embeds it into the document. Again, the real magic is the audit trail that proves the signature’s authenticity, not how perfect your drawing is.

What constitutes a signature?

The modern era has changed the traditional definition of a signature. Many people still associate the word “signature” with pen-to-paper writing. But the reality of what now constitutes a signature is much broader.

In today’s world, a signature is simply proof that a person agrees to be bound by an agreement. While this used to be limited to traditional written signatures, the digital era offers many new ways to prove this assent to the contract.

Wet signatures

The usual “signature” most people think of is the wet signature. This occurs when a person or business physically signs a document with a pen on paper. This traditional method still requires negotiations by phone, mail, email, or in person. This is a slow process, especially considering that, on average, 66% of contracts are negotiated, according to The 2025 Contracting Benchmark Report.

Many companies still require a wet signature, often because leadership believes this is the safer method, though electronic signature methods are safe and reliable ways of creating an enforceable agreement. In fact, under key U.S. laws like UETA and E-SIGN, a signature may not be denied legal effect solely because it is in electronic form. Other companies still use wet signatures because “it’s how we’ve always done it.” But with the modernization of contract lifecycle management technology, more effective methods exist, making wet signatures unnecessary.

While a wet signature is an enforceable method, it creates limitations, including:

• Long delays in the agreement negotiation
• Requirements of a physical meeting and scheduling of that meeting
• Physical storage of the original contract

The evolution of signatures

Electronic signature technology has evolved significantly over time. Previous methods of contract acceptance include:

• Wet signature. The wet signature has been around for thousands of years. This used to be the primary method of signing a contract.
• Digital signature devices. The first digital signature method was a tablet or signature device that tracked an electronic pen, such as those used on credit card machines.
• Images of a signature. Some contracts utilize a picture of a signature used as the signature for a person or business. This is often copied and pasted into a document.
• Electronic signatures. A valid electronic signature includes clickwrap agreements or embedded signatures. They are far more efficient methods of gaining digital contract acceptance.

Types of electronic signatures

Electronic signatures come in a few different types, each with a different level of security. Depending on what you’re signing and the level of security you need, you’ll run into a few different types. Here’s a quick rundown of what you’ll see out there.

• Simple Electronic Signatures (SES). This is the most common type you’ll encounter. Think of checking a box to agree to terms of service or typing your name at the bottom of a document. It shows your intent to sign, but the security really comes from the audit trail the system provides rather than the signature method itself.
• Advanced Electronic Signatures (AES). This is where things get more robust. An AES is uniquely tied to you as the signer and can identify you specifically. You maintain sole control over how it’s created, and it can detect if someone tampers with the data afterward. This gives you a higher level of security than a simple signature.
• Qualified Electronic Signatures (QES). This is the gold standard and carries the same legal weight as a handwritten signature in the EU. It’s an advanced signature created with qualified devices and based on qualified certificates. You’ll typically see this required for high-stakes government or legal documents, especially in Europe.

How are eSignatures used in business?

Electronic signatures have become essential for modern business operations. They replace slow, paper-based signing with digital alternatives that cut processing times from days to minutes and eliminate the need for physical document storage.

Business teams across industries use electronic signatures for specific operational needs:

1. Contract signing. One of the most common uses of electronic signatures in business is for contract approval. Businesses can create, send, and receive signed contracts electronically, saving time and streamlining the agreement process.
2. Sales and purchase agreements. Sales teams can use electronic signatures to finalize sales and purchase agreements with customers, suppliers, or partners, speeding up the sales cycle and reducing the need for physical paperwork.
3. Employee onboarding. Human resources departments use electronic signatures to onboard new employees. This includes signing employment contracts, policies, and other relevant documents.
4. Non-Disclosure Agreements (NDAs). Companies can use electronic signatures to obtain NDAs from employees, contractors, or business partners to protect sensitive information.
5. Vendor and supplier contracts. Electronic signatures enable businesses to quickly finalize contracts with vendors and suppliers, providing smooth procurement processes.
6. Master Service Agreements (MSAs). Professional services firms, such as consulting, legal, and accounting, use electronic signatures to obtain service agreements and engagement letters, which is critical when complex contracts like MSAs can take an average of 60 days to execute, as noted in the report.
7. Loan and mortgage applications. Financial institutions can streamline the loan and mortgage application process by using electronic signatures for required documents.
8. Compliance and legal documents. Companies can use electronic signatures for compliance-related documents and approvals, providing that the necessary regulatory requirements are met.
9. Change orders and amendments. Electronic signatures facilitate the approval of change orders and amendments to existing contracts or projects.
10. Internal approvals. Businesses use electronic signatures for internal approvals, such as budget authorizations, project proposals, and other official documents.
11. Remote work collaboration. In the era of remote work, electronic signatures enable teams to collaborate efficiently, even when team members are in different locations.

By adopting use of electronic signatures, businesses can significantly improve their document management processes, reduce administrative burden, enhance security, and provide a better experience for both employees and customers. Remember to choose a reputable and secure electronic signature service to provide legal compliance and protect sensitive information.

How to sign a digital contract

When it comes to signing digital contracts, you have several electronic methods to choose from. The approach you pick affects both how legally enforceable your signature is and how easy the experience is for everyone involved.

There are four primary ways to sign digital contracts, and **eSignature signing** gives you the most flexibility. Here’s how it typically works: recipients get signature requests via email or through contract management platforms. From there, they can sign using digital pens, mouse clicks, or touch screens, and the system captures their electronic signature image. Digital stamps can also serve as alternatives to traditional signatures.

• Clickwrap agreements. A clickwrap agreement is the simplest type of eSignature. All the signor needs to do is check a box or click a button confirming they have read the agreement and agree to its terms.
• Sign-in-wraps. A sign-in-wrap eSignature is like a clickwrap agreement in several ways. A sign-in-wrap requires the user to create an account and use that account to access the agreement.
• Embedded contracts. An embedded contract is a bit more time-consuming. These are called application programming interface (API) signatures because they are embedded into the app or webpage. This makes it easier to gather acceptance and important data within the same software.

These different methods provide options for your company.

Clickwrap vs. eSignatures

Both eSignatures and clickwrap belong to the same family of click-to-sign contracts, although they are not necessarily the same. Choosing the right signature method for your needs can significantly impact acceptance capture rates and user experience.

eSignatures

Electronic signatures are usable in nearly every situation. eSignatures are useful for many online contracts, including tax returns, sales contracts, and even subscription agreements. They provide an easier signing method than a traditional wet signature. The entire signature process is considerably faster and can occur entirely online.

Clickwrap agreements

A clickwrap agreement is a form of single-click signature method. These are very useful in digital contracts and other online agreements. The user clicks a button to check a box that states, “I agree.”

The clickwrap signature is a collection of data points that make up an audit trail by proving how the user “affirmatively assented” to the terms of the digital contract. The clickwrap then keeps accurate back-end records to prove that this acceptance occurred, providing the types of evidence that are most successful in court.

Clickwrap agreements are commonly used in updates to Terms and Conditions, subscription agreement updates, and many other business-to-consumer (B2C) situations. While common in B2C situations, business-to-business (B2B) organizations also use these agreements when appropriate.

Similarities between eSignatures and clickwrap agreements

While they are different, eSignatures and clickwrap agreements do share similarities. Both types of agreements create legally binding contracts. Federal law makes both types of digital agreements legally enforceable. When properly designed and recorded, these digital agreements are just as effective as a written signature, streamline contract acceptance, and decrease turnaround time for capturing that acceptance.

Electronic signature laws

The Electronic Signatures in Global and National Commerce Act (ESIGN) and the Uniform Electronic Transactions Act (UETA) govern electronic signature use in the United States. While UETA is the law in most U.S. jurisdictions, E-SIGN is the overriding federal law that provides legal recognition for electronic signatures nationwide. These laws establish specific compliance requirements for legal enforceability. The right eSignature solution automates compliance with these complex regulations.

The electronic signatures in global and national commerce act (ESIGN)

The ESIGN Act became law on June 30, 2000. It creates rules that govern the enforceability and validity of electronic signatures. This also includes records for transactions that affect interstate or foreign commerce. The ESIGN Act is one of the primary laws making electronic agreements and digital contracts enforceable.

The law outlines the requirements for an electronic signature. Under the act, an electronic signature is defined as “any electronic sound, symbol, or process” that would be “logically associated” with the agreement. This broad definition covers many types of eSignature methods, including clickwrap agreements. Your company’s agreements must follow the ESIGN Act requirements to ensure your digital contracts are legal and enforceable.

A company must obtain the user’s prior consent with a clear and conspicuous statement that informs the consumer:

• Of all legal options or rights for the record to be provided or made available in paper or electronic form
• The right to withdraw consent of permissions
• If the legal consent applies only to a specific transaction or instead to different categories of records
• Of any procedures the consumer must utilize to withdraw previous consent
• How the consumer can request a paper copy of a record, and whether any fees apply to requesting that copy

The uniform electronic transactions act (UETA)

The UETA is a state law rather than a federal law. The National Conference on Uniform State Laws adopted the UETA in 1999, and the act has now been adopted as law by 49/50 states. The UETA actually predates the ESIGN Act and outlines additional obligations for electronic signatures and records not listed in the ESIGN Act.

The UETA gives legal protection for digital signature methods. It includes legal provisions that state:

• A record or signature may not be denied validity or enforceability just because it is in a digital format.
• An agreement may not be denied validity or enforceability just because a record was in an electronic format.
• If a law or regulation requires a document to be in writing to be enforceable, an electronic record satisfies this requirement.
• If a law or regulation requires a signature, a digital signature complies with the law.

European signature laws

Sixteen years after the U.S. passed the ESIGN Act, the European Union passed the eIDAS Regulation, which is short for “electronic identification and trust services.” This European regulation created a three-tiered signature rating and formed a service to verify the authenticity of businesses and individuals concerning electronic documents or signatures.

To use electronic signatures within the European Union, a person or company must use one of the following signature types:

• Standard Electronic Signature (SES)
• Advanced Electronic Signature (AES)
• Qualified Electronic Signature (QES)

E-signature laws in Australia

Australia was an early adopter of electronic signatures, beginning with The Electronic Transactions Act (ETA) passed in 1999. But until COVID-19 prompted the government to act quickly, there was still a long list of restricted transactions that still required a wet signature. Temporary measures allowed more flexibility during lockdown, but once expired, digital contracting began to regress.

Today, the country is working to update its legislation to match modern technology and user demand.

Are electronic signatures legally valid?

Electronic signatures are legally valid and enforceable in most countries worldwide. The United States, European Union, Canada, and Australia all recognize electronic signatures through specific legislation.

Legal validity depends on meeting established requirements. Two fundamental principles determine enforceability:

1. Intent to sign. For an electronic signature to be legally valid, there must be evidence that the signer intended to sign the document. This can be established through various means, such as clicking an “I Agree” button, typing a name, drawing a signature using a stylus or mouse, or using other authentication methods like a digital certificate.
2. Reliability and authentication. The electronic signature process should be reliable and appropriate for the circumstances. To guarantee this, some countries require higher levels of security, such as using digital signature certificates issued by trusted certification authorities (CAs), especially for more critical or sensitive transactions.

It’s important to note that while electronic signatures are generally legally valid, certain types of documents and transactions may have specific requirements or exceptions. For example, documents like wills, trusts, or real estate deeds may still require physical signatures due to specific legal requirements in certain jurisdictions.

To understand the legal side of electronic signatures in your country or region, you should review the local laws and regulations. Additionally, it’s advisable to consult with legal professionals to ensure compliance with local laws and to determine the suitability of electronic signatures for your particular use case.

Since the legal landscape is subject to change, it’s a good idea to stay updated on any new developments or legislative changes regarding the recognition of electronic signatures.

Electronic signature security and authentication

Let’s be honest, the biggest question you probably have is, “How do I know this is secure?” It’s a fair question. A signature is useless if you can’t prove who it came from. This is where the technology behind the scenes really matters.

A good eSignature platform doesn’t just paste an image of a signature onto a document. It creates a secure, tamper-proof record of the entire signing process. This is often called an audit trail or certificate of completion. This record captures key information like the signer’s email address, their IP address, and timestamps for every action they took—from when they viewed the document to when they signed it.

Authentication is another piece of the puzzle. The most basic form is sending the signing request to a specific email address. You’re trusting that only the intended recipient has access to that inbox. For more sensitive documents, you might use multi-factor authentication (MFA), where the signer also has to enter a code sent to their phone. This adds another layer of certainty that the person signing is who they say they are.

Choosing the right eSignature app

Standalone signature tools like DocuSign, Adobe Sign, and HelloSign handle document signing effectively. These platforms lack comprehensive contract management capabilities that businesses need for full lifecycle management.

End-to-end contract management platforms provide integrated solutions that cover every part of the business’s needs:

• A tool that makes digital collaboration easy for different departments and counterparties
• DocX native platforms for all digital signature methods
• A workflow designer with a drag-and-drop interface that makes it easy to create digital signatures, contracts, and approval processes
• A centralized contract repository for all digital signatures and agreements
• The ability to handle all contract and eSignature types
• Pre-built templates to create new and manage existing contracts
• The power to edit contracts in real time

Five questions to help you evaluate eSignature tools

eSignature tool evaluation requires assessing specific criteria that match your business requirements. Five key questions determine which solution fits your operational needs and compliance requirements.

1. Does the eSignature solution integrate easily with other software systems?

Legal, sales, procurement, and numerous other departments use several types of software every day. These organizations need an eSignature solution that integrates easily and well with their existing systems. The eSignature solution should complement these systems and not require significant reconfiguration to get them to work together.

eSignature methods should also make the signature process seamless for users. Signing and capturing that signature in your existing systems should be easy. Users should be able to sign their agreement anywhere—from a laptop, tablet, or even a cell phone.

2. Does the method make signing easy?

The eSignature method should make it easy for the user to sign—no matter what type of device they are using. An effective method is a simple method that works on nearly any device. Other options, like embedded contracts, similarly make it simple for the user to assent to the terms of the contract.

The eSignature method should also make it simple to capture back-end acceptance records. An agreement means little if you cannot prove it was made. This proof is necessary for the enforceability of the contract.

3. Does the eSignature meet compliance and regulatory needs?

You need an eSignature method that complies with the legislation and regulations governing your business. These will depend on your particular business, practice, or industry.

You should make sure that your digital signing technology complies with all privacy legislation. This includes the California Consumer Privacy Act (CCPA) and the European Union’s General Data Protection Regulation (GDPR). These privacy laws obligate you to process, request, and store users’ personal data and signatures in particular ways.

Businesses must also keep complete and accurate records of who signed what document and when. This task can be difficult for companies with hundreds or thousands of simultaneous active contracts.

The eSignature method should use a dynamic contract repository that automatically keeps comprehensive records. It should be a centralized hub that stores records and makes them easily accessible to help comply with regulatory needs and compliance audits.

4. Does the eSignature software permit brand customization?

Your brand should permeate everything your company does, including how it collects affirmative consent to contracts. Your contracts should look like the rest of your company’s materials.

Your eSignature method should allow you to customize it to maintain your brand. Keeping your branding in the signature process increases customer trust and confidence in the signature method.

5. Does it help your company scale?

Your eSignature method should be able to meet your company’s needs at scale. Your company needs to be able to grow, and your technology needs to be able to keep up.

You should consider the following to see if your eSignature method can keep up with your company’s growth:

• Does the solution let you deploy the eSignature behind a firewall or within the cloud?
• Does the solution offer clickwrap agreements?
• Does the e-signature solution offer high-level encryption, security certificates, and other security features?
• Does the e-signature solution offer support in different languages and support access from other countries?

A growing business needs a highly flexible and adaptable solution to help it change and meet new challenges.

Manage eSignatures with contract management software

Contract management software enables self-service electronic signature workflows across your organization. It expedites signature collection through automated processes. It provides centralized storage for all signed documents. It creates automatic audit trails for legal compliance with federal, state, and international regulations.

Electronic signatures reduce time, costs, and administrative complexity. They ensure all parties access current document versions during negotiations. They make the redlining and acceptance process faster and simpler.

Streamline your electronic signature process

Getting a signature is just one step in the contracting process. If you’re still emailing documents back and forth just to get them signed, you’re leaving a lot of efficiency on the table. The real win comes when you connect your eSignature process to your entire contract lifecycle.

Think about it: instead of just a signing tool, you can have a system that generates the contract from a template, routes it for internal approvals, sends it for signature, and then automatically stores the final version in a central repository. This is where a full contract lifecycle management (CLM) platform comes in. It turns eSignature from a standalone task into a seamless part of your business workflow.

When you’re ready to move beyond just signing and start truly automating your contract process, it might be time to see how a comprehensive platform can help. If you’re curious about what that looks like in practice, you can request a demo today to see how it all connects.

Frequently asked questions about electronic signatures

How do I type an electronic signature?

The simplest way is to use an eSignature platform that lets you type your name and then converts it into a signature-style font. Some legal contexts also recognize typing ‘/s/’ before your name (e.g., /s/ Jane Doe) as a valid signature, but using a dedicated platform provides a much stronger audit trail.

What are the four requirements for an electronic signature to be valid?

While it can vary by jurisdiction, the core requirements are generally: one) intent to sign, meaning the signer must show a clear intention to sign the document; two) consent to do business electronically, where both parties agree to use electronic records and signatures; three) association of the signature with the record, ensuring the signature is logically connected to the document it signs; and four) record retention, meaning the signed document must be stored and accurately reproduced for all parties. For example, SEC regulations require filers to retain authentication documents for a period of five years and provide them if asked.

What is the difference between digital signature and electronic signature?

Think of “electronic signature” as the broad category for any electronic process that shows intent to sign. A “digital signature” is a specific, highly secure type of electronic signature. It uses cryptography (specifically, public key infrastructure or PKI) to embed a unique “fingerprint” into the document. This makes it easy to verify the signer’s identity and to see if the document has been tampered with after signing. All digital signatures are electronic signatures, but not all electronic signatures are digital signatures.

Are electronic signatures secure for business use?

Yes, when you use a reputable platform. Modern eSignature solutions are built with security at their core. They provide features like encryption for data in transit and at rest, detailed audit trails that track every action, and various levels of signer authentication. For most business transactions, they are considered more secure than traditional wet signatures because of the comprehensive digital record they create.

Can electronic signatures be used internationally?

For the most part, yes. Many countries around the world have laws that recognize the legality of electronic signatures, such as the eIDAS regulation in the European Union. However, the specific requirements can differ. Some countries may require a more secure type of signature (like a QES) for certain documents. If you’re doing business internationally, it’s always a good idea to use a platform that supports global standards and to double-check the local laws for any high-value or government-related agreements.

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Ironclad is not a law firm, and this post does not constitute or contain legal advice. To evaluate the accuracy, sufficiency, or reliability of the ideas and guidance reflected here, or the applicability of these materials to your business, you should consult with a licensed attorney. Use of and access to any of the resources contained within Ironclad’s site do not create an attorney-client relationship between the user and Ironclad.