E-proposals: Helping Businesses To Sign-Up Clients Instantly Through Digital proposals

Digital Signatures: Explained

Understanding how digital signatures work

Are Electronic Signatures legally binding?

Better Proposals are compliant with the following:

  • Electronic Signatures in Global and National Commerce Act
  • European Directive (EC/1999/93)


Yes. Both the European Union and the U.S. Congress have adopted legislation recognizing the enforceability of electronic signatures. A number of U.S. states have enacted similar legislation.

In the European Union, Article 5 of Directive 1999/93/EC adopted on December 13, 1999 established that member states shall ensure that an electronic signature is not denied legal effectiveness and admissibility in legal proceeding on the grounds that it is in electronic form.

In the United States, the Electronic Signatures in Global and National Commerce Act, enacted on June 30, 2000, established that with respect to interstate and foreign commerce transactions (a) no signature or contract could be denied legal effect, validity or enforceability solely because it was in electronic form and (b) no contract could be denied legal effect, validity, or enforceability solely because an electronic signature was used in its formation. The Act also established that, with respect to intrastate transactions, a state statute or regulation could only modify, limit, or supersede the Act to the extent that (i) it constituted an enactment or adoption of the Uniform Electronic Transactions Act (“UETA”) and is inconsistent with the Act; or (ii) it specified alternative procedures or requirements for the use or acceptance of electronic signatures to establish the legal effect, validity, or enforceability of the contracts, provided that such alternative procedures are not inconsistent with the Act.

Following the adoption of the Act, a majority of state legislatures subsequently enacted legislation based on UETA also recognizing the enforceability of digital signatures.

Will a contract signed with a electronic signature hold up in court?

When a third party challenges a contract, such party typically challenges how the terms of the contract are interpreted. Of course, we have nothing to do with the terms of the contract and cannot ensure how they will be interpreted. You and your third party are solely responsible for drafting and reaching agreement on the terms of the contract.

In the case of an electronic contract, however, a challenging party will often challenge not only the interpretation of the terms of the contract, but also whether the person signing the contract had the authority to “sign” the contract on behalf of the company, as well as the validity of any such signature. In anticipation of this issue, we not only collect digital signatures but we also take extra precautions to authenticate each signature that we collect, including recording the time and date when the electronic signature is provided, recording the IP address of the signatory, and recording the email address utilized by the signatory to provide the digital signature. These precautions ensure that you will be able to defend your digitally signed contract against any such challenge