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Are Electronic Signatures Legal?

Electronic signatures, or e-signatures, are becoming a standard method of conducting business transactions. While electronic signature laws vary by country or region, most have established their legality and enforceability. Here’s an overview for Australia, Canada, the European Union, and the United States.

AuditDashboard offers a fully integrated end-to-end solution for CPAs to initiate electronic signature requests, sign and organize documents within its engagement management platform.

Australia

In Australia, e-signed documents have been recognized at the Commonwealth (federal) level since 1999. The Electronic Transaction Act states that electronic signatures are as valid and enforceable as traditional ink signatures.

Australia maintains a technology-neutral approach to documents that are signed electronically. E-signatures are common and regularly used in business transactions.

Canada

In Canada, e-signatures are regulated by the Personal Information and Electronic Documents Act (PIPEDA), the federal legal framework that recognizes Electronic Signatures as legally valid. All provinces, other than Quebec, have legislation based on the Uniform Electronic Commerce Act (UECA), established in 1999; Quebec has a similar law (CQLR c C-1.1) which states that “electronic signatures and documents have the same legal weight as their paper equivalent.”

Canada does not prescribe specific technologies for the use of electronic signatures and follows a minimalist and technology-neutral approach without requirements for digital certificates for Standard Electronic Signatures (SES).

European Union

The eIDAS regulation defines three types of electronic signatures (SES, AES, QES). It is a new regulation on electronic identification and trust services for electronic transactions in the European Single Market. It establishes a legal framework for people, companies (particularly small to mid-size enterprises), and public administrations to execute transactions across EU member states.

eIDAS entered into force on September 17, 2014, and has applied since July 1, 2016. It repealed and replaced the Electronic Signatures Directive 1999/93/EC, a European Union directive on electronic signatures in contracts within the EU.

The eIDAS regulation does not favour any particular technology requirements for the execution of electronic signatures.

United States

The United States has recognized the legality of electronic signatures by adopting two sets of statutes: the Electronic Signatures in Global and National Commerce Act (ESIGN Act) in 2000 and the Uniform Electronic Transaction Act (UETA) in 1999.

The ESIGN Act is a federal law granting legal recognition to electronic signatures and records if all parties to a contract choose to sign documents electronically. UETA provides a framework for individual states to enact laws concerning the enforcement of e-signatures.

UETA and the ESIGN Act reinforced the use of electronic signatures by confirming that electronic records carry the same weight and have the same legal effect as traditional paper documents and wet-ink signatures.

The United States follows an open, technology-neutral approach to the use of digital signature technology.

To learn how electronic signatures by AuditDashboard can complement your workflow, improve turnaround times and your client experience, visit auditdashboard.com/esignatures

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