What Constitutes a Signature?

Key takeaways:

• Recognize that electronic signatures have been legally recognized in the United States since 2000 under the ESIGN Act and UETA, carrying the same legal weight as traditional wet signatures for most business transactions.

• Implement electronic signatures to dramatically accelerate contract processes, with 80% of agreements completed in less than a day and average cost savings of $36 per agreement, while eliminating physical document management overhead.

• Leverage the enhanced security of electronic signatures over traditional methods, as digital platforms create comprehensive audit trails that capture who signed, when, from what IP address, and every document action, providing stronger evidence than paper documents if disputes arise.

• Ensure enforceability by requiring affirmative assent through actions like clicking “I agree”, providing conspicuous notice of terms before signature, obtaining consent when terms change, and maintaining detailed records through your electronic signature platform.

How many times this week have you clicked “I agree” without thinking twice about it? Download an app, sign up for a service, accept terms and conditions—these simple clicks have replaced what used to require meeting in person with a pen and paper. But here’s what might surprise you: thanks to laws like the ESIGN Act and UETA, which provide a legal framework for eSignatures, those digital interactions carry the exact same legal weight as traditional signatures in most cases.

Electronic signatures have quietly transformed how business gets done. Deals that used to take weeks now close in hours. Contracts zip across continents in seconds. Your sales team isn’t stuck waiting for signed documents to arrive by mail, and your legal team isn’t playing document traffic controller.

Whether you’re managing contract management processes across your organization or trying to understand which signing method makes sense for different situations, understanding electronic signatures isn’t optional anymore—it’s essential for doing business efficiently and legally.

What is an electronic signature?

An electronic signature is any digital way of indicating you agree to be bound by a contract. The format doesn’t determine validity—intent does. What matters is proving who signed and that they meant to be bound by the agreement. This could be your typed name at the bottom of an email, a squiggly line you draw with your mouse, clicking an “I agree” button, or even a recorded voice confirmation.

Here’s what surprises many people: electronic signatures have been legally recognized in the United States since 2000. The ESIGN Act made them just as enforceable as traditional signatures for most business transactions. You’re not taking a legal risk by going digital—you’re using a well-established, court-tested method that’s been working for businesses for over two decades.

Benefits of electronic signatures

Let’s be direct: switching to electronic signatures isn’t just about being modern. It’s about making your life, and the lives of everyone you work with, fundamentally easier. Here’s what actually happens when you make the switch.

Speed becomes your competitive advantage. Deals that used to take days or weeks to close can wrap up in hours; in fact, with eSignature, up to 80% of agreements are completed in less than a day, and 44% are finished in under 15 minutes. Your sales team isn’t stuck waiting for contracts to arrive by mail. Procurement can onboard vendors immediately. New hires can complete their paperwork before their first day. When a contract can be signed in minutes instead of days, your entire business moves faster.

Costs disappear from your budget. Think about what you spend on paper, printing, overnight shipping, and storage. Eliminating these materials and processes can lead to an average $36 saved per agreement, not to mention the hours your team saves managing physical documents. All of that? Gone. One of our customers calculated they were spending $50 per paper contract just in materials and shipping. Multiply that by hundreds or thousands of contracts per year.

Security actually improves. This might seem counterintuitive, but electronic signatures are far more secure than wet signatures, especially when compared to the common but risky practice of emailing documents—a method that 73% of employees have used for contracts. A physical signature can be forged relatively easily, and proving who actually signed a piece of paper is surprisingly difficult. Electronic signature platforms create detailed audit trails—capturing who signed, when they signed, their IP address, and every action taken on the document. If someone ever challenges the validity of a signature, you have ironclad evidence.

Nothing gets lost in the shuffle. No more frantic searches through filing cabinets or email threads looking for that one signed agreement. Every signed document is automatically stored, indexed, and searchable. Need to find all NDAs signed in the last quarter? It takes seconds, not hours.

Compliance becomes manageable. Electronic signature platforms automatically maintain the records required by law, track consent, and ensure documents are stored securely. You don’t have to worry about whether you’re meeting regulatory requirements—the system handles it for you.

How to create an electronic signature

Creating an electronic signature is refreshingly straightforward. Most platforms give you several options, and you can choose whatever feels most natural to you.

Type your name. The simplest method is just typing your name into a signature field. The platform will usually convert it into a stylized font that resembles a signature. Don’t worry if it doesn’t look like your “real” signature—legally, it’s the act of typing and agreeing that creates the binding commitment, not how fancy it looks.

Draw your signature. You can use your mouse, trackpad, or finger on a touchscreen to draw your signature. Will it look perfect? Probably not. Does it matter legally? Not at all. The system is capturing your intent to sign, not judging your artistic skills.

Upload an image. If you’re attached to your traditional signature, you can scan it and upload the image. Sign a piece of paper with a dark pen, take a photo or scan it, and upload it to the platform. Many people find this gives them the psychological comfort of using their “real” signature while gaining all the benefits of digital signing.

Use a digital certificate. For situations requiring enhanced security, you can use a digital certificate that cryptographically proves your identity. This is overkill for most business contracts but can be useful for high-value or sensitive agreements.

The method you choose doesn’t affect the legal validity of your signature. What matters is that the platform can connect your action to your identity and demonstrate your intent to be bound by the agreement. The audit trail and authentication matter far more than whether your signature looks pretty.

What is a wet signature?

A wet signature is the old-school method—literally putting pen to paper. It’s called “wet” because the ink is actually wet when you sign (though by the time anyone sees the signature, it’s obviously dry). This is how contracts worked for centuries: print the document, meet in person or mail it around, sign with actual ink, then store the physical paper somewhere.

Many companies still require wet signatures, often out of a mistaken belief that it’s safer. In reality, modern electronic signature methods are safe and reliable ways of ensuring an enforceable agreement. Many others use this method because “it’s how we’ve always done it”—a sentiment reflected in data from The 2025 Contracting Benchmark Report, which shows that, on average, 57% of contracts are still initiated on counterparty paper rather than a company’s own standardized templates. With advancements in digital contracting technology, more effective methods like clickwrap exist that do not require a wet signature.

Federal and state laws like the ESIGN Act and the UETA hold that digital signatures are just as effective as wet signatures. These laws increase the viability of digital signatures as a replacement for pen-to-paper signatures required in the past.

Ways to sign electronically

Checkboxes and buttons

The most common electronic signature method you encounter is probably the simple checkbox or “I agree” button. These clickwrap agreements require you to actively click to show you accept the contract terms. The click itself becomes your signature—it’s deliberate, it’s recorded, and it proves you agreed to the terms. Courts consistently enforce properly designed clickwrap agreements because they require clear, intentional action from the person agreeing.

• click-accept
• click-to-sign
• clickthrough

A user agrees to an online contract by simply checking a box or clicking a button that says “I agree.” Instead of a digital signature, this click represents the signature and indicates acceptance. Clickwrap agreements are an effective way to limit risk without impacting the customer experience. A customer can quickly agree to the terms without the inconvenience of less-sophisticated signature methods.

A squiggly line

Another form of eSignature requires the user to sign with their mouse. This usually results in an illegible signature but counts just the same. This digital format still indicates that the user agrees to the terms by requiring affirmative action.

Signing in or registering

Another common electronic signature method is known as a sign-in-wrap. It requires the user to complete another action, like signing in or registering on the site, to agree to the terms presented. This is performed by clicking a button.

How signatures have changed over time

The evolution from wet signatures to electronic ones didn’t happen overnight. We’ve gone through several distinct phases, each solving different problems with how we prove someone agreed to a contract.

Earlier methods of contract acceptance include:

• Pen to paper: The wet signature. This was the original method to obtain a signature. Both parties would physically sign the agreement. Pen to paper methods could also include faxed copies and those sent via email. This method is too slow and inefficient for modern business.
• Digital signature devices: Signature pads were the original digital signatures. They track the movement of a digital pen over the surface to create what looks like a traditional signature.
• Signature images: Some contracts permit the use of a signature image that is uploaded and added to a document.
• Electronic signatures: True electronic signature methods like embedded signatures and clickwrap increase the efficiency of the acceptance stage. They provide efficient methods to prove that a contract was signed.

The increase in available signature methods provides flexibility by allowing your company to choose the right acceptance method for the job. While previous contracts required wet signatures or clunky digital signing, modern technology permits digital acceptance methods like clickwrap, browsewrap, and sign-in-wrap. When properly utilized, these various signature methods effectively prove that the user agreed to the contract and is bound by its terms.

How signatures and contract acceptance are defined by the ESIGN Act and the UETA

The ESIGN Act and the UETA have significantly impacted how a signature is defined. A digital signature and other acceptance methods are considered valid signatures. Both laws protect the enforceability of digital signatures and make them just as effective as a wet signature.

The Electronic Signatures in Global and National Commerce Act (ESIGN)

The ESIGN Act is the federal law that made electronic signatures legally binding across the United States. Signed into law in 2000, it defines electronic signatures broadly as “any electronic sound, symbol, or process” that shows you intended to sign a contract. The law sets out specific requirements that electronic signature systems must meet to ensure validity, but these are straightforward to follow with any reputable platform.

These requirements include, but are not limited to:

• The consumer must be made aware of their rights to a paper or electronic copy of the agreement and the right to withdraw any consent.
• The consent or signature applies only to that particular transaction or record.
• There are procedures necessary to withdraw consent.
• The consumer can reasonably access the information.
• Records of the signature and agreement are kept per the Act’s requirements.

Following the requirements of the ESIGN Act does not have to be complicated. With a digital repository for your contracts, you can store your electronic signatures to comply with federal law. It makes it easy to handle voluminous agreements and prove enforceability when needed.

The Uniform Electronic Transactions Act (UETA)

The UETA is a state law adopted by the National Conference on Uniform State Laws in 1999. As of late 2023, 49 states, the District of Columbia, and the U.S. Virgin Islands have adopted the UETA. New York is the only state that has not, though it has its own similar laws governing electronic signatures.

The Act clarifies that electronic signatures are as effective as wet signatures and has changed the landscape of digital contracting by creating increased flexibility in signature methods. The UETA provides protection for electronic signatures, including provisions that hold:

• A contract cannot be denied simply because the signature is electronic.
• The contract may not be denied simply because the contract is digital.
• If a law requires a signature, a digital signature constitutes a signature for purposes of that law.
• An electronic record satisfies any “in writing” requirements under the law.

Electronic signatures come in many forms, and each is considered valid thanks to the ESIGN Act and the UETA. Electronic signature methods carry many benefits. These include:

• Convenience: There is no need to pass physical documents back and forth or email them. You can simply sign when the contract is fully negotiated.
• Simplicity: Digital signatures are easy to use. A company can collect signatures quickly and without significant employee hours.
• Cost: Digital signatures significantly reduce costs. There are no physical inventory requirements like paper, pens, and increased work hours during the acceptance stage.
• Speed: eSignatures do not create the same delays as other signature methods. Contract acceptance can happen instantly instead of taking days.
• Increased security: Digital signatures have built-in security measures to ensure they are encrypted and are actually signed by the right party.

Electronic signature use cases

Electronic signatures aren’t limited to one department or document type—they’re transforming how entire organizations operate. Here’s where you’ll see them making the biggest impact across your business.

Sales teams use electronic signatures to close deals faster. Sales agreements, order forms, and service level agreements can be executed instantly, eliminating the dreaded ‘waiting for signatures’ bottleneck. This is critical, as inefficient processes can lead to abandoned deals for nearly a third of organizations, killing momentum. Your sales reps can close deals during the call instead of hoping the enthusiasm survives a week of document shuffling.

HR departments have transformed onboarding from a paperwork nightmare into a smooth digital experience. Offer letters, NDAs, employee handbooks, and benefits enrollment all happen electronically. New hires complete everything from home before day one, arriving ready to work instead of filling out forms.

Procurement teams execute vendor agreements, master service agreements, and statements of work without the back-and-forth of physical documents. Suppliers get to work faster, and your procurement team maintains better visibility into agreement status.

Legal teams handle routine agreements like NDAs electronically, freeing them from being document traffic controllers. This is especially true for high-volume, low-risk agreements; for instance, NDAs only require legal involvement 30% of the time, according to the report. Instead of managing signature logistics, they focus on negotiating better terms and managing actual legal risk.

Finance departments process invoices, approve purchase orders, and execute financial agreements with complete audit trails. Every approval is documented, timestamped, and stored—making audits straightforward instead of stressful.

IT teams manage software licenses, service agreements, and security documentation electronically. Renewal management becomes proactive instead of reactive when every agreement is digitally tracked and searchable.

The pattern is clear: any document that requires agreement or acknowledgment can benefit from electronic signatures. If your team is still printing, signing, scanning, and emailing documents, you’re not just wasting time—you’re actively handicapping your business.

Electronic signature security

Security concerns are valid—and frankly, they’re exactly why electronic signatures are superior to wet ink. A physical signature is shockingly easy to forge, and proving who actually signed a paper document often comes down to expensive handwriting analysis. Electronic signatures flip this equation entirely.

Comprehensive audit trails capture far more than just the signature itself. Every electronic signature creates a detailed forensic record: who accessed the document, when they viewed it, how long they spent reviewing it, where they were located (via IP address), what device they used, and the exact timestamp of signing. Try getting that level of detail from a piece of paper.

Multi-factor authentication ensures the right person is signing. Platforms verify identity through email authentication, access codes, knowledge-based authentication, or even biometric verification. You know exactly who signed—not just that someone who could forge a signature did.

Document integrity protection prevents tampering after signing. Electronic signature platforms use cryptographic seals to lock documents after execution. Any attempt to alter the document breaks the seal, making tampering immediately obvious. With paper documents, alterations can be subtle and hard to detect.

Encryption safeguards data both in transit and at rest. Your contracts aren’t sitting in unlocked filing cabinets or traveling through regular mail where anyone could intercept them. They’re protected by bank-level encryption throughout their lifecycle.

Compliance controls are built into the platform. Electronic signature systems automatically maintain records according to legal requirements, track consent properly, and ensure documents meet regulatory standards. You don’t have to become a compliance expert—the system handles it.

The security question isn’t whether electronic signatures are safe enough. It’s whether you can afford to keep relying on the relatively weak security of paper documents. When disputes arise—and they will—you want the comprehensive evidence that only electronic signatures provide.

Signature best practices to ensure enforceability

Getting electronic signatures to hold up in court isn’t complicated, but there are specific practices that make the difference between an airtight agreement and one that could be challenged. The key is proving both who signed and that they clearly intended to be bound by the contract.

• Require affirmative assent: The signature method should require that the user take a specific action to agree to the terms. Passive acceptance methods like browsewrap agreements have been struck down as unenforceable by courts in the past because they do not require affirmative action to agree. Instead, a simple action like clicking “I agree” records that the user chose to take action confirming they will be bound by the contract terms.
• Conspicuous notice of terms: The agreement’s language should be obvious and readily available to the user. The user must have the opportunity to review the agreement before they sign. This can be via a link, a scroll-through box, or an option to download the agreement. The key is to make it available and obvious what the user agrees to.
• Obtain consent when terms are modified: Agreements have to change over time. When they do, your company should get consent to these changes from the user. This is easily handled when you use effective contract management software, which automatically tracks when updates require a new signature.

Maintain excellent records: Your digital contracting software should automatically record important data on who signed, the version of the contract signed, the relevant dates, and much more. This data is crucial to enforcing the agreement when necessary, especially since one survey found that 92% of errors in contract management are due to human error, according to The 2025 Legal Operations Field Guide.

Streamline electronic signatures with Ironclad

Electronic signatures have evolved from a novel convenience to a business necessity. They’re faster, more secure, and more reliable than traditional wet signatures—and they’ve been legally recognized for over two decades.

The question isn’t whether to adopt electronic signatures, but how to implement them effectively across your organization. When you choose the right platform and follow best practices, you’re not just digitizing signatures—you’re transforming how your entire organization handles agreements.

Ironclad’s contract management software goes beyond simple eSignatures to provide a complete digital contracting platform. From clickwrap agreements for high-volume transactions to sophisticated workflow automation for complex negotiations, Ironclad ensures every signature is captured, tracked, and stored securely. Request a demo today to see how we can transform your contracting process.

Frequently asked questions about electronic signatures

Is an electronic signature just typing your name?

Sometimes, yes. Typing your name can be a valid electronic signature when it’s connected to a clear process showing your intent to be bound by the agreement. The typed name is the “symbol,” and the act of submitting or clicking “agree” creates the legally binding commitment. What makes it enforceable isn’t the typing itself—it’s the entire system that captures your identity, intent, and consent.

How do I add an eSignature to a PDF?

Most modern PDF readers include basic signature tools—you can usually type, draw, or insert an image of your signature directly in programs like Adobe Acrobat. For business contracts, though, that’s not your best option. A dedicated contract lifecycle management platform provides the audit trail, authentication, and secure storage that make signatures legally bulletproof. Simply signing a standalone PDF leaves you without the evidence you’d need if someone challenges the agreement.

Are electronic signatures legally binding?

Yes, absolutely. In the United States, the ESIGN Act of 2000 gave electronic signatures the same legal weight as handwritten ones at the federal level. The Uniform Electronic Transactions Act provides similar protection at the state level. As long as you can prove who signed and that they intended to sign, an electronic signature is just as enforceable as wet ink. Courts have been upholding electronic signatures for over two decades—this isn’t new or untested territory.

What documents cannot be signed electronically?

While electronic signatures work for most business documents, some exceptions exist. Wills and trusts, court documents, and certain real estate transactions often still require wet signatures depending on your jurisdiction. Some government forms and notarized documents also need physical signatures. However, for typical business contracts—NDAs, sales agreements, employment contracts, vendor agreements—electronic signatures are not just acceptable, they’re increasingly expected.

How can I verify an electronic signature is authentic?

Electronic signature platforms create detailed audit trails that make verification straightforward. You can see exactly when the document was signed, by whom, from what IP address, and every action taken. Most platforms also provide a certificate of completion that documents the entire signing process. This digital evidence is actually much stronger than trying to verify a handwritten signature, which often requires expensive forensic analysis.

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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.