Electronic Signatures: What Are They and Are They Legally Binding?

Published Date: 31 August 2019 | 5 min read

9 questions about e-signatures

The amount of information regarding electronic signatures can often be overwhelming if you are a beginner on the subject. Navigating through guides to find the answers to simple questions or trying to understand the industry slang can indeed be challenging.

Despite all the information going around, the basics never seem to get addressed shortly and concisely. We want to change that! After all, genius is making complex ideas simple, not making simple ideas complex.

This blog post aims to provide simple and clear answers to all the questions you might have regarding electronic signatures.


What is an electronic signature?

The expression e-signature refers broadly to any electronic process or technique that indicates acceptance of an agreement or a record. The concept includes the objective element, which basically consists of the signing method, and the subjective element, which is the intent to sign.

In simple terms, an electronic signature is a legal and valid way to sign documents online.


How does an electronic signature look like? Is an electronic signature just typing your name?

No. Contrary to popular belief, electronic signatures come in many shapes and forms. Therefore, an electronic signature can be more than just drawing or typing your name on a tablet.

E-signatures can also come in the shape of digital security identification methods such as digital IDs, fingerprint scanners, iris scanners, and voice recognition. Hence, the e-signature is a versatile tool that can accommodate every business industry.


What are the types of electronic signatures?

There are three types of electronic signatures that differ based on their level of security.


Simple electronic signatures

A simple e-signature is data in electronic form, which is attached to or logically associated with other data in electronic form and used by the signatory to sign. In its most basic configuration, the e-signature can be as simple as a name entered in an electronic document and used by the signatory to sign.


Advanced electronic signature

An advanced e-signature (or digital signature) is defined in the EU as an e-signature that meets the requirements listed in art. 26 of eIDAS Regulation (and the same requirements are similarly materialized in other e-signature legislation). For an e-signature to be classified as advanced (and therefore compliant and valid), it must be:

- uniquely linked to the signatory and capable of providing distinctive information that identifies the signatory and confirms that they are who they claim to be.

- created using electronic signature creation data that the signatory can, with a high level of confidence, use under his sole control; this can be done with a certificate for electronic signature, electronic proof that confirms the identity of the signatory and links the electronic signature validation data to that person.

- linked to the data signed therewith in such a way that any subsequent change in the data is detectable (in case of alteration, the signature is marked invalid for tampering).

The advanced electronic signature carries the same legal value as a handwritten signature in the EU (and around the world).


What are the benefits of electronic signatures?

A few of the many reasons businesses should opt for electronic signatures are:


Saving time, money, and the environment

The average annual cost associated with mailing, printing and scanning documents is $80 per employee. By implementing e-signatures, businesses can significantly reduce costs. On top of that, they are a great way for companies to reduce their carbon footprint.


Reduced administrative burdens

Time spent on administrative burdens could definitely be put to better use! Electronic signatures allow your employees to save time on manual processes and focus on what’s really important: the core business and its customers.


Higher security level than ink-and-paper signatures

It is relatively easy to alter and falsify an ink pen signature. Moreover, one can easily lose documents or misplace them.


Are electronic signatures legally binding and enforceable?

Yes, electronic signatures are legally binding, enforceable, and valid. The eIDAS regulation, which entered into force on July 1, 2016, ensures that electronic signatures are legally binding. These European regulations mean that any electronic document you send between two EU countries is secure, legal, and regulated. Regulation (EC) No 910/2014 allows EU members to make transparent transactions between countries.



Who can use electronic signatures?

Electronic signatures can be used by everyone, everywhere, at any time, and from every electronic device. E-signatures can be used both in a personal or professional context to sign documents online. Whether you want to use them for signing annual reports, employment contracts, or lease agreements, e-signatures have almost no application limits.

In a professional context, businesses managing a large volume of documents and contracts were the first ones to adopt e-signatures. Our customers work within auditing and accounting, financial services, and real estate. Penneo now has over 550,000 individual signers and this number is growing every day!


How do I create a simple electronic signature with Penneo?

It’s very easy to create a simple electronic signature (Touch signature) with Penneo. Just follow the steps below:

1. Open the email from Penneo and click on “Click here to read your documents”

2. Read all the documents and attachments then click on “Go to signature”

3. Select “Touch signature”

4. Select one of the three options: draw your signature, type your signature, or upload an image of the signature

5. Click on “Sign Documents” and you’re all set!


Do you need a more secure signing method? Try advanced e-signatures, also known as digital signatures.


What document formats can I sign electronically with Penneo?

You can only sign PDFs with Penneo since this is the only document format you can upload to the app. Do you want to sign a Word document, a Google docs document, or any other type of text file electronically? No worries, just save or export them as PDFs first. You can then easily upload them to Penneo.


Is your electronic signature software secure enough?

There are plenty of good e-signature solutions out there. Unfortunately, the same goes for bad ones. Companies should beware of non-compliant electronic signature software. Many of the certified electronic signature providers out there simply copy and paste your signature into a PDF document. Unfortunately, this kind of signature has no legal value since it is impossible to prove the identity of the signatory.

Furthermore, one could edit the contents of the document after it has been signed. Since all businesses must be able to prove the validity of signed documents, a non-compliant signature software can cause them serious problems.


What is the best electronic signature software?

It is essential to choose the right electronic signature software. If you are looking for the highest level of security and compliance, you definitely need Penneo’s digital signature solution. Penneo is a complete digital signature software that provides:

Digital signature

Digital transaction management

Automated data deletion

Documents overview and tracking

Secure cloud-based storage

Any individual or business can request a free trial of Penneo in a matter of minutes and start signing documents electronically.


Sign up for a free trial of Penneo!