Electronic Signature- A 'Must-Have' in your Contract Management Software
Electronic Signature- A ‘Must-Have’ in your Contract Management Software
by PracticeLeague

August 2020

Virtual Environment

The step involving the execution of contracts by signing and stamping off a document is quintessential for concluding a contract lifecycle. In the case of digital agreements, this stage necessarily involves the execution of documents with the assistance of an electronic signature platform encrypted in a digital contract. It authenticates the contract and carries a host of benefits for the end-user. E-signature is relevant all the more in times when both the parties to the digital contract,

  • show the intention to sign documents,
  • consent to do business electronically.

The conventional method of placing a signature with 'wet ink' has had to be done away with during the present times of the global pandemic where social distancing has become a norm. It has also necessitated lawyers to adopt technology for end-to-end contract management, including the execution of the contract using electronic signatures; thereby, drawing smart contracts to a finality. To this end, Electronic execution of documents with e-signature is legally binding between the parties to the contract. We take a closer look at the platform and how lawyers and legal departments may capitalize on the overall benefits of digital signature platforms.

Digitized signature: How does it work for agreements and contracts?

Electronic signatures may be generated by eSign online Electronic Signature Service or third-party service providers based on the secure cryptographic implementations. Most of the platforms commonly use electronic authentication methods such as email, corporate ID, PIN, sent on email, or mobile phones. The process may be simple, but it entails several criteria to the extent that the digital signatures must be unique, the signatory must have access and control of the data. The certification has to be issued by a registered certifying authority. While it explains the process involved, the proof of digital contract signing is demonstrated through an audit trail of the process involved in securing the document.

General Exceptions where E-signatures are not tenable

On record, an electronically executed cannot be denied legal effect simply because they are executed through digital signing software. The thumb rule of the matter is that where hand signatures are accepted, so are the digital names an acceptable practice. There are certain exceptions, however, where e-signatures cannot be used, in cases of-

  • Negotiable instruments, bill of exchange, promissory notes or a bank cheque
  • Wills and testaments
  • Power of attorney
  • Real estate contracts, lease or sales agreement.

How are electronic signatures particularly beneficial for the legal service providers?

There are a host of reasons and benefits of digital signatures that one can think of when it comes to integrating e-signature platforms as a part of the Legal Contract Management Platform. They are quick, prompt, safe, secure, and full control over the documents stored on the one-touch repository. Under this, the user

  • may store or retrieve contracts that are electronically signed and executed-Easy workflow processes in place,
  • large organizations may find it beneficial to gather, track and manage signatures or approval of documents in their repository-Hence, justifying the ease of conducting business,
  • Validity, enforceability, and admissibility- Explains a transparent execution of documents.
e-signature

Execution of electronic signatures: The legal perspective

E-signatures are permissible under law and carry the same weightage as that of the physical signatures. Following the passing of various acts across the globe to facilitate commerce using digital signatures, more than 60 countries have recognized the evidentiary and legal value for digital signatures.

While the intent here is to authenticate documents and contracts, the benefits of e-signature using the underlying technology consider the privacy, security, and authenticity of the communications that take place digitally. To this end, electronic signatures:

  • Facilitates prompt and secure execution of documents,
  • Carry the same evidentiary value as that of the 'wet signature',
  • Provide a smooth transition towards a paperless contract,
  • It has a binding effect, legal validity and may be purported as evidence before the courts of law.

Not just for the present, PracticeLeague digital signature solutions relevant in the future as well, addressing several challenges lawyers faced and the sheer number of steps involved: Procuring the stamp paper from an authorized vendor, affixing stamp and signature, safe storage. Digital signature platforms provide a reliable, secure mechanism that is tamper-proof and safe to store at a one-touch repository.

PracticeLeague Legal Tech provides innovative platforms to manage end-to-end Contract Management for business organizations and law firms. The digital signature platform, when embedded to the system, greatly eases the process of execution of contracts and paves way for save, secure commercial transactions.

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