Electronic signature vs wet signature

The most famous signature ever (at least in American history) was that of John Hancock, who, as president of the Second Continental Congress, was the first signatory of the Declaration of Independence. Legend has it that as he signed his name in conspicuously large handwriting, he quipped that he wanted King George to be able to read it without his glasses.

For the past three or four centuries, a person’s signature has been a requirement for completing a contract or authenticating a document. The distinctive nature of a handwritten signature spawned an entire niche industry of handwriting analysts, some of whom claimed nearly clairvoyant talents. The power of a signature is why presidents use a different pen to sign each letter of their name on significant legislation and hand out the pens as treasured souvenirs.

Since 2000, when President Bill Clinton signed the Electronic Signatures in Global and National Commerce (ESIGN) Act by hand and electronically, e-signatures have, to a large degree, supplanted “wet signatures” — the term for a signature someone makes by hand with a pen on a paper document. The ESIGN Act and the Uniform Electronic Transactions Act, passed by nearly all U.S. states, declared an e-signature is as enforceable in court as a wet signature on a valid contract, so long as all signatories agree.

Simply using e-signatures on e-contracts, which give you the ability to present a contract to all the signatories at the speed of email instead of courier or snail mail, yields significant efficiencies. The Vermont state government documented a 75-percent reduction in the time to process routine contracts once it switched to e-signatures. Adapting e-signatures is no longer a technological challenge, as readily available online tools make it easy to e-sign Word documents and standard business forms.

Roughly 80 percent of bank customers prefer banking digitally to visiting a bank branch. It goes without saying that online banking was impractical before e-signatures allowed consumers to open bank accounts, write checks, and transfer money online.

The need to get actual paper documents in front of key people for their signatures is often the biggest drag on projects that otherwise would move ahead swiftly. And even today, six years after a federal mandate required medical professionals to switch from paper to medical records, illegible handwriting remains a significant cause of medical error.

Just as “love email” doesn’t sound as tender as “love letter” — even though email has been around for quite a while — it might take another 20 years before telling someone to put their e-signature to a contract has the same familiar ring as “put your John Hancock right there.”

But nostalgia for wet signatures is misplaced. As every historian who has deciphered old ships’ logs, journals, and letters for firsthand accounts of the past will tell you, people have generally always had terrible handwriting, and that opens up the potential for fraud.

For centuries, signatures have been fundamental to business in all the many ways we rely on contracts. It’s possible that people will still be signing birthday cards centuries from now, but in most other ways, e-signatures have already come a long way toward making wet signatures a practice of the past.

AUTHOR
Peter Page is a professional writer whose career began in print. He has worked with hundreds of entrepreneurs and business leaders as an editor at Entrepreneur.com and Green Entrepreneur. He is now editor for contributed content at Grit Daily News.

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