Electronic Signature

An electronic signature is a legally recognized way to show that someone agrees to or approves an electronic record, such as a contract. In simple terms, it is the digital equivalent of signing with pen and paper.

Electronic signatures can take many forms, including typing a name, clicking an “I agree” button, drawing a signature on a screen, or signing through an eSignature platform. For in-house legal teams, they are a core part of faster, more controlled contract execution.

What is an electronic signature?

In plain English, an electronic signature is any electronic action that shows a person’s intent to sign or accept a document.

Common examples include:

• Typing your name at the end of a contract
• Clicking an acceptance checkbox
• Using a mouse, finger, or stylus to draw a signature
• Applying a signature through an eSignature platform

The key point is intent. If the signer clearly intended to sign or approve the record, the electronic signature may be legally valid.

Is an electronic signature legally valid?

In many jurisdictions, yes. Electronic signatures are generally enforceable if certain conditions are met.

In the United States, the main legal frameworks are:

• ESIGN Act
• UETA (Uniform Electronic Transactions Act)

These laws generally support the use of electronic signatures in business and commercial transactions, as long as the process can show that:

• The signer intended to sign
• The signature is linked to the electronic record
• The record can be retained and reproduced later
• The parties consented to doing business electronically

That said, legal validity can vary based on:

• The type of document
• The jurisdiction involved
• Industry-specific rules
• Internal company policies

So while electronic signatures are widely accepted, legal teams should always confirm whether a specific agreement can be signed electronically.

Electronic signature vs. digital signature

These terms are often used interchangeably, but they are not the same.

An electronic signature is the broad legal concept.
A digital signature is a specific technical method used to secure and authenticate an electronic signature, often through encryption.

For legal teams, the practical takeaway is simple: all digital signatures are electronic signatures, but not all electronic signatures are digital signatures.

How electronic signatures work in contract management

Electronic signatures are most useful when they are part of a broader contract workflow.

A typical process looks like this:

1. A contract is prepared and approved internally
2. A signature request is sent to the relevant party
3. The signer reviews and signs electronically
4. The system captures the time, date, identity markers, and activity history
5. The signed agreement is stored in a searchable repository

When integrated into a contract lifecycle management (CLM) platform, electronic signatures help teams:

• Speed up contract turnaround
• Reduce manual follow-up
• Avoid version confusion
• Maintain an audit trail
• Store final agreements in one place
• Improve visibility into signature status

For legal ops teams, this matters because execution is not just about getting a signature. It is also about ensuring the signed contract is traceable, accessible, and defensible later.

When might a wet signature still be needed?

Electronic signatures are widely accepted, but they are not appropriate for every situation.

A wet signature may still be required for:

• Certain deeds
• Some notarized documents
• Wills, codicils, and testamentary trusts
• Certain family law documents
• Documents subject to jurisdiction-specific formalities
• Transactions where a counterparty or regulator requires ink signatures

Cross-border deals can also create added complexity. Different countries have different standards for validity, identity verification, and document formalities.

For that reason, legal teams should confirm:

• Whether the document type is eligible for eSignature
• Whether the governing law allows it
• Whether internal signing policies impose stricter rules

Why it matters for in-house legal teams

Electronic signatures are not just a convenience feature. They directly affect execution speed, compliance, and contract governance.

For in-house legal teams, they help:

• Close agreements faster by removing printing, scanning, and mailing
• Improve compliance with standardized signing workflows
• Strengthen auditability through logs and execution records
• Support remote teams and global business operations
• Reduce administrative burden on legal and business users
• Lower execution risk caused by missing signatures or outdated versions

In practice, the value of electronic signatures increases when they are connected to a full contract process, from drafting and approvals to execution and storage.

Best practices for compliant electronic signature workflows

To make electronic signatures more reliable and defensible, legal teams should look for:

• Clear signer intent
• Authentication measures appropriate to the transaction
• Timestamped audit trails
• Controlled document versions
• Secure storage and easy retrieval
• Record retention policies
• Approval workflows tied to signing authority

This is where a CLM platform can add value. Instead of treating signature as a standalone step, legal can manage it within a governed workflow that includes approvals, version control, and a central contract repository.

FAQs

What is an electronic signature in simple terms?

An electronic signature is a digital way to show that someone agrees to a document or transaction. It can be as simple as typing a name, clicking “I agree,” or signing through an eSignature tool.

Are electronic signatures legally binding?

Yes, electronic signatures are generally legally binding if they meet applicable legal requirements, such as showing signer intent, linking the signature to the record, and preserving the signed document.

What is the difference between an electronic signature and a digital signature?

An electronic signature is the broader legal concept of signing electronically. A digital signature is a specific technology that uses encryption to authenticate the signer and protect document integrity.

Can contracts be signed electronically?

Yes, many contracts can be signed electronically. However, some document types or jurisdictions may still require wet signatures or additional formalities.

When is a wet signature required instead of an electronic signature?

Wet signatures may still be required for certain deeds, wills, notarized documents, family law documents, or transactions governed by local rules that do not recognize eSignatures for that document type.

Are electronic signatures admissible in court?

Generally, yes. Electronic signatures can be admissible in court, especially when supported by strong audit trails, authentication records, and proof that the signer intended to sign.