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Will digital signatures fulfill the legal needs of your business?

Will digital signatures fulfill the legal needs of your business?

Remember the time when electronically signing a document simply meant relying upon technology like printers, scanners, and email to seal a deal?

Ah, yes, simpler times.

Not long before eSignatures were introduced, you’d simply type your name or attach a picture of your signature and send the digital document back. Talk about a severe lack of data integrity.

If you’re cringing at the security risks of such a practice, you aren’t alone. This fear and the lack of security is exactly what led to the introduction of encryption-based signatures. 

Today, the most secure form of an eSignature is a digital one.

Digital signature 101: What is it and how does it work?

At the heart of it, a digital signature is the confirmation of the signer’s identity. It ensures that the electronic document has been signed by the person they claim to be and that there hasn’t been any tampering within the document post-creation. 

It’s like an electronic signature that’s been coded and encrypted for an added level of security. The same easy-to-use functionality of an electronic signature that you know and love, minus the security risks.

Think of it this way: your signature is a locked box that requires two keys to open. If the keys don’t match, an alarm will go off, red lights will start flashing, the doors will shut close, and the FBI will burst through the windows to apprehend the culprit.

Now obviously, that’s not going to happen but if the keys don’t match, the document will be invalidated and all of the parties will be notified.

Behind the scenes of digital signature signing

Your digital signature comes with two encryption keys — one public, one private.

The public key is available to anyone who wants to send you documents to sign. You’ll use the private key to sign the document. If the keys match, the sign and document are validated, and things move forward smoothly.

If the keys don’t match, the person sending or receiving the document knows your identity has been compromised.

Sounds complicated, right?

We’re not going to sugar coat it. It is complicated. The good news is, PandaDoc handles the behind the scene technicalities of public-key cryptography for you.

All you need to do is drag and drop a signature field in your original message and send it to the other party for signing. As soon as they sign, you get a notification.

It’s that simple.

Benefits of digital signatures

They save time

Gone are the days of waiting for someone to courier, scan, or email signed documents to you. That’s now their service provider’s job. It’s simply a matter of signing and sending.

There’s no downloading, printing, or any other time-consuming steps.

You can send and encrypt proposals, quotes, and contracts and close the deal in a matter of minutes through digital messages. 

They’re more secure

Signing on paper might give the recipient a tangible feeling of security, but it doesn’t get any more secure than the public key infrastructure digital signatures have in place. A handwritten signature can be forged, and the document itself can be tampered with, misplaced, or even destroyed.

Digitally signed documents don’t just authenticate the identity of the signer but also make sure the document isn’t changed in any way.

They reduce costs

Businesses can save a small fortune by going paperless. The amount spent on stationery, printer, ink, and couriers is eliminated given the way digital signatures work.

Are digital signatures legal?

In 2000, the US passed a federal law called The Electronic Signature in Global and National Commerce Act (ESIGN) and The Uniform Electronic Transactions Act (UETA). These laws state that electronic signatures have the same legal standing as pen-and-ink “wet” signatures.

Worried about notarizing your signature during quarantine? eNotaries can take care of that through digital certificates.

Luckily for you, PandaDoc has a digital certificate compliant with the e-sign act that has been issued by the Certification Authority that notarises all its digital signatures.

In short, digital signing of documents is entirely legal. Add this to the running list of benefits digital signatures have to offer.

Need more legal certainty in order to start using electronic signatures? Learn more about documents that can be signed with e-signatures in your country:

  1. The United States
  2. The United Kingdom
  3. Australia
  4. Canada
  5. Switzerland
  6. South Africa

The different types of digital signatures

Most softwares support digital and electronic signatures and allow you to create one for yourself. They might use different types of signatures, but the functions of both remain essentially the same – they both ensure the security of your document. Two popular software that creates digital signatures are Adobe and MS Word.

Adobe PDF has two types of signatures: Certified and Approval. A certified signature is created by the author of a document. It helps prevent the document from being edited or tampered with. On the other hand, approval signatures capture the approval of the concerned parties and embed them in the document.

Similarly, MS Word has both Visible and Non-visible documents. A visible signature denotes a line on which the party must sign. A non-visible signature is used in those documents that don’t need to be signed but must provide assurance of the authenticity of the document.

What do these different types of digital signatures mean for you?Not much, unless you’re working with these softwares.

If you’re using PandaDoc, you don’t need to worry about the different types of signatures. All you need to do is include the signature and send it for signing. The other party will then choose whether they want to type, draw, or upload their sign to your document.

What is a digital certificate and how is it different from a digital signature?A digital certificate is what connects your public key to you and confirms your identity. Without it, there’s no way to check whether the two keys even match. It’s what binds the keys to their owner.

A digital certificate is issued by a certificate authority and contains three things: your public key, certificate information, digital signature.

A digital signature is the equivalent of a handwritten sign on a paper and verifies the authenticity of an electronic document.
Just how secure is a digital signature?Think of your digital signature like a fingerprint, uniquely yours. It also captures additional information like the identity of the person signing, the name of the document being signed, as well as the date and time of signing for added security.

Once the document is signed, it cannot be changed. Any attempt to do so renders the sign and document invalid.

Creating a digital signature in PandaDoc

Wondering how you can create a digital signature of your own?

Our eSignature feature is a simple 3-step process.

  1. Upload the document and scroll down to where you want the signature;
  2. Select a Field from the menu on the right and drag it to where you want the signature;
  3. Assign the field to the contact who needs to sign it and send it to them.

PandaDoc offers 3 styles of signatures and lets you select which one you want to assign to the document.

  • Drawn – Using the mouse to draw a sign;
  • Typed – Choose from 6 available font styles;
  • Uploaded – Select an image from your computer and upload it.

You can choose all three if you want to give your recipient a choice in the matter.

Using digital signatures in your business

Every successful business requires a fast and efficient document organizing and signing system.

Not only are there an unlimited number of signatures available for you to collect within a single month, but there are also zero fees for this service, too.

PandaDoc eSignature functionality automates the document signing process completely. It’s legally binding, easy to use, and features the same level of encryption that financial institutions around the world use to protect their data.

Originally published February 2, 2018, updated May 18, 2020

Emily Roberts

Emily Roberts Content Associate at PandaDoc

Emily is a Content Associate at PandaDoc. She's passionate about creating content that converts, SEO, and true crime podcasts.

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