Are Electronic Signatures Valid? What Counts as a Legal Signature Online

As a lawyer for online business owners, I hear this question all the time: Is an electronic signature valid?

Short answer: Usually, but not always.

Electronic signatures are valid for many everyday business contracts. Someone can type their name, draw a signature on a screen, or sign through an online platform. What matters most is whether the person intended to sign, whether the signature is connected to the agreement, and whether you can prove what happened if they later dispute it.

Here’s what every online business owner should know about e-signatures:

Legal Disclaimer: This post is for educational purposes only and does not constitute legal advice. Read full disclaimers.

What Is an Electronic Signature?

An electronic signature is an electronic action someone uses to show they intend to sign a document.

It could include:

• Typing a name into a signature box
• Drawing a signature with a finger, mouse, or stylus
• Clicking a button marked “Sign” or “I agree”
• Signing through an electronic-signature platform
• Uploading an image of a handwritten signature

The signature doesn’t need to look handwritten. The person simply needs to take an action showing that they meant to approve the agreement.

Is Typing Your Name a Valid Electronic Signature?

Yes, typing your name can be a valid electronic signature when you type it with the intention of signing the document.

In the United States, the federal E-SIGN Act says a contract generally can’t be denied legal effect solely because an electronic signature was used. The EU, UK, and Canada have similar laws recognizing electronic signatures.

For example, a client opens your contract, types their name into a field labeled “Signature,” and clicks “Complete.” That process clearly shows they intended to sign the agreement.

The font doesn’t matter, and the typed name doesn’t need to resemble the person’s handwritten signature. Their intent and the signing process matter more.

Are Electronic Signatures as Valid as “Wet” Signatures?

Yes. For many everyday business contracts, an electronic signature can be just as valid as a traditional handwritten signature (sometimes called a “wet” signature).

U.S. federal law says a contract can’t be denied legal effect solely because it was signed electronically.

That doesn’t mean every electronically signed contract is automatically enforceable. The contract still has to meet the usual legal requirements.

An Electronic Signature Doesn’t Fix a Bad Contract

A valid signature won’t save a contract that has bigger problems. For example, the contract may still be challenged if:

• An important term is missing or unclear
• The signer didn’t have authority to sign for the company
• Someone was pressured or tricked into signing
• The contract was changed after it was signed
• The document has special legal requirements

The signing method matters, but the actual contract matters just as much.

Are Electronic Signatures Legally Binding?

An electronic signature can be legally binding, but a valid signature and a binding contract aren’t exactly the same thing.

The signature shows that someone intended to sign. The agreement still needs the basic parts of an enforceable contract, including clear terms and agreement between the parties. A stronger electronic-signing process should also show:

• Who signed
• What document they signed
• When they signed it
• That they intended to sign
• That the signed version was saved

Electronic-signature laws recognize electronic records and signatures in most everyday business transactions.

Do Electronic Signatures Hold Up in Court?

Yes, electronic signatures will usually hold up in court.

If someone disputes the signature, the real issue will usually be whether you can prove who signed the contract and what they agreed to. Helpful evidence can include:

• The signer’s email address
• The date and time the contract was signed
• Any identity verification steps
• The final version of the contract
• A record showing whether the document was changed
• Emails or messages about the agreement

Why an Audit Trail Matters

Many electronic-signature platforms like Docusign create an audit trail showing what happened during the signing process. It may include the signer’s email address, IP address, date and time, authentication steps, and a completion certificate.

An audit trail isn’t always legally required, but it can make your life much easier if someone later claims they never signed the contract.

Is a Digital Signature the Same as an Electronic Signature?

No. People use these terms interchangeably, but they don’t technically mean the same thing.

An electronic signature is the broad category. It includes any electronic method someone uses to show they intend to sign a document.

A digital signature is a specific type of electronic signature that uses technology to verify the signer and help show whether the document was changed after signing.

“Electronic signature” is the broader term, and a digital signature is one specific type of electronic signature.

Is a Scanned Signature a Digital Signature?

No. A scanned image of a handwritten signature usually isn’t a technical “digital signature”.

It can still count as an electronic signature when the person adds it to the document with the intention of signing.

The bigger concern is proof. A signature image can be copied and pasted, which can make it harder to show who added it and when.

For important contracts, an electronic-signature platform with a clear signing record is usually a better choice than emailing an editable document with a pasted signature.

Is /s/ a Valid Signature?

You may have seen someone sign an electronic document by typing /s/ followed by their name.

During my 12 years as a litigator, I signed my name this way hundreds of times on court filings, discovery documents, letters, and other legal documents. Lawyers use “/s/ [Name]” all the time when signing electronically.

For a regular online business contract, though, if possible, I’d still lean towards an electronic-signature platform. It gives you a cleaner record that the person meant to sign the contract.

Are Electronic Signatures Safe?

Electronic signatures can be safe, but some signing methods provide better security and evidence than others.

Typing your name into a secure signing platform creates a clearer record than pasting an image of your signature into an editable document and emailing it around.

To make your signing process more secure:

• Send the signing link directly to the signer’s email address
• Use identity verification for important or high-value contracts
• Choose a platform that creates an audit trail
• Save the final signed contract and completion records
• Limit who can edit the document

A signature can still be legally valid even when the signing process has weak security. The problem is that it may be harder to prove who signed it or whether the document was changed.

What’s the Best Electronic Signature Platform?

The best electronic signature platform is one that’s easy for your clients to use and gives you solid records showing what happened during the signing process. Look for a platform that:

• Creates an audit trail
• Records when the contract was opened and signed
• Connects the signature to the final version of the document
• Prevents changes after signing
• Lets both parties download a copy
• Offers extra identity verification when you need it

Popular options include DocuSign, Dropbox Sign, and Adobe Acrobat Sign. All three offer signing records and audit-trail features. But you don’t need the fanciest or most expensive platform for your contracts. You just need one that creates a clear, reliable electronic record.

What Documents Cannot Be Electronically Signed?

Nearly all everyday business contracts can be signed electronically, but some documents so have special rules.

The U.S. federal E-SIGN Act doesn’t permit electronic signatures on certain documents and notices, including some involving wills, family law, court proceedings, utility shutoffs, foreclosures, evictions, insurance cancellations, and hazardous materials. State laws may add other requirements.

Check the applicable rules before using an electronic signature for:

• Wills and other estate-planning documents
• Certain family-law documents
• Some court filings
• Documents requiring witnesses or notarization
• Certain real estate or foreclosure documents
• Government forms with specific filing rules

The rules can vary by state and by document. When you’re dealing with something outside an ordinary business contract, make sure electronic signing is allowed before relying on it.

Do Both Parties Have to Agree to Use Electronic Signatures?

Yes. The parties need to agree to handle the transaction electronically, but you usually don’t need a separate clause saying, “We agree to use electronic signatures.” (Though some contracts will have that, which is also fine.)

That agreement can be shown by what the parties do. For example, you send the contract through an electronic-signature platform, and your client opens it, signs it, and sends it back electronically.

Federal law also makes clear that someone generally can’t be forced to accept electronic records or signatures. So, in most online business transactions, the signing process itself will show that both sides agreed to use electronic signatures.

How Should Online Business Owners Collect Electronic Signatures?

The best electronic-signature process is one that makes it clear who signed, what they signed, and when they signed it. Here’s what to build into your process:

Use a Process That Shows Intent

The signer should take a clear step showing they mean to sign the agreement.

Typing a name into a labeled signature box and clicking “Complete” in an electronic signing platform like Docusign is much stronger than simply emailing a document back and forth with a name typed into the Word version.

Connect the Signature to the Final Contract

Make sure the signature is attached to the exact version of the contract the person approved. You don’t want to collect a signature separately and then leave room for an argument about which version they actually signed.

Save the Records

Keep:

• The completed agreement
• The audit trail or completion certificate
• Any emails about the agreement
• Any later changes or amendments
• The final version sent to both parties

Those records can make a huge difference if someone later claims they didn’t sign or didn’t agree to a particular term.

Use Stronger Verification When More Is at Stake

A routine service agreement may not need the same level of identity verification as a large licensing deal, business sale, loan, or ownership transfer. The more money and risk involved, the more legally foolproof your signing process should be.

Make Sure the Contract Is as Strong as the Signature

A valid signature only gets you so far. It can show that the parties agreed to the contract, but it can’t add protections that were never included in your contract in the first place.

Your contract still needs to clearly cover things like payment, cancellations, deadlines, ownership, refunds, and what happens when the scope of the work changes.

That’s exactly why I created my Contract Store. It’s filled with affordable, lawyer-drafted contract templates made for online business owners, so you don’t have to piece together legal language from random website, cross your fingers and hope for the best.