Is it legal to sign sales contracts with electronic signatures?

Every good salesperson knows that the critical moment of any sale is closing the deal. There are several techniques to close a sale, all are equally valid and apply according to each specific case. But once you have already changed the potential customer’s thinking, and he/she has made the decision to purchase your product or service, the common denominator at the end of the sales process is signing the contract in question.

Just as persuasion techniques play a fundamental role to convince a prospect, the way to sign a contract also plays a crucial role: it’s not the same to sign with pen and paper, as using the electronic signature – a technology that simplifies and facilitates complying with the last step in the sales process, getting the customer to sign the contract.

Although the electronic signature is not a new technology – the first European norm* to regulate electronic signatures is from 1999 – many potential clients could be suspicious of other methods of signing that are not the traditional handwritten signature with a pen and paper. The question is fair – “but … is the electronic signature legal?” – and in this post we will answer it, so that it doesn’t create any inconvenience when closing a sale.

“I signed a contract with an electronic signature … is it legal?” 

If you are facing the critical moment of the entire sale and you have an electronic signature solution, such as those offered Signaturit, the final step will put a cherry on top of your sales efforts: your client will sign the contract from your tablet, or his/her smartphone or computer with both of you will receiving a copy of the signed contract via email. Speed, efficiency and with no further delays.

Now, what happens when your potential client shows reluctance concerning the legality of signing with an electronic signature? Well, it’s not a big deal, because the electronic signature is legal, so don’t let this objection make you lose a sale.

What laws regulate the electronic signature in the European Union? 

On July 1, 2016 the EU Regulation Nº 910/2014, also known as the eIDAS*, came into force. This regulation defines itself as a regulation “on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/CE.”

The fact that the new European law is a regulation, and not a directive, has the advantage that it is directly applicable to all Member States. That means, it doesn’t leave margin for any interpretations, which was one of the problems that the previous directive had (for the fact of being a directive): every Member State interpreted it in their way and incorporated it into their own legal framework. What could occur with the Directive, for example, is that any type of electronic signature recognized as legal in the UK, wasn’t recognized by other member states. This problem no longer exists thanks to the eIDAS.

What types of electronic signature exist? 

Article 3 of the eIDAS Regulation defines three types of electronic signatures:

• Electronic signature: “means data in electronic form which is attached to or logically associated with other data in electronic form and which is used by the signatory to sign.”
• Advanced electronic signature: “means an electronic signature which is uniquely linked to the signatory and capable of identifying him/her; which is created using electronic signature creation data that the signatory can, with a high level of confidence, use under his sole control; and which is linked to the data signed therewith in such a way that any subsequent change in the data is detectable.”
• Qualified electronic signature: “means an advanced electronic signature that is created by a qualified electronic signature creation device, and which is based on a qualified certificate for electronic signatures.”

The two types of electronic signatures most commonly used are the electronic signature and the advanced electronic signature. As both are legal, the advanced offers a greater level of security regarding the electronic signature, by the fact that it allows to identify the signer.

Meanwhile, the qualified electronic signature, although it offers greater guarantees regarding the identity of the signer, it is not used so much commercially because it adds complexity to the sales process, as the client needs to have a qualified electronic signature creation device in order to sign the contract.

Conclusion: yes, signing a sales contract with the electronic signature is legal 

Both in the UK as in all Member States of the EU. Additionally, the eIDAS regulation establishes in its article 25 that the legal effects of an electronic signature cannot be denied for the simple fact of being electronic, nor can electronic signatures be rejected in judicial proceedings.

With all of this information, sales teams that have an electronic signature solution available can expedite the final process for any sale, and can resolve any questions potential customers may have regarding the legality of contracts signed electronically.

Signaturit

Signaturit provides an electronic signature and document management software platform to send and sign documents.