A legal signature refers to the signatory's name written in a distinct form that's used to identify themselves or provide authorization on important business documents.
The way people do business traditionally has changed. Wet signatures are being used less. Nowadays, people are turning to paperless digital formats to streamline operations, the criteria around what constitutes a legal signature have shifted. But if you're not sure what kind of signature to use, you can also read our guide about what is a wet signature.
If you've ever signed anything before, then you've likely used a legal signature. When it comes to determining what exactly is a legal signature, things can get complicated.
In this article, we'll examine this question and many more to help you to fully understand what it means for a signature to be legal and how you can ensure that what you sign is legally binding—even when it's not in writing.
Ready? Let's jump right in.
What Constitutes a Signature?
Essentially, a signature refers to a mark an individual makes on a document (or another instrument) to acknowledge that they agree to or accept conditions that are outlined by what they're signing.
As business gets more global every day, the rise of digital signatures has changed the way people do business and sign contracts. The process of printing, signing, and scanning business documents is too time-consuming for the way we do business in a modern world. Digital signatures offer a much more streamlined solution that saves both time and money.
An electronic signature, also known as an e-signature or typed signature, is created when someone types their name on a document or pastes a scanned image of their handwritten signature. As we move further into a digital world where the concept of a handwritten signature is somewhat outdated, the scope of what constitutes a legal signature has shifted significantly.
Particularly for freelancers, electronic signatures simplify the whole process of signing important business documents like contracts, quotes, proposals, retainer agreements, and other types of forms.
Regardless of the form it takes, it's important that a signature is used as proof that information has been considered and accepted by the signer. That means a signature can be stylized to a point that it's completely illegible to others, but still be legal.
For a freelance agreement to be legally binding, it must be signed by all parties involved. This is the most common way for individuals to indicate that they have carefully read and agreed to the terms outlined in a contract or other type of document. Regardless of what the signature looks like—whether it's written neatly, scribbled, or typed—it's proof that conditions have been considered and accepted.
As long as a signature is representative of who a person is and their intent, any kind of mark is considered legal.
Does your signature have to have your full name?
No, they don't. As we mentioned before, a signature refers to any mark made by someone upon a document to express their consent from the conditions outlined. Therefore, a signature doesn't have to be someone's full name. Instead, it can be an illegible mark, a squiggle, or a scanned picture of a signature if signing electronically.
Are initials a legal signature?
They sure are. Legal signatures can be simply an individual's initials. The important thing to remember is that your signature should match what you have signed other legal documents with.
For example, if your signature on your driver's license is simply "LM" rather than your full name, it should be the same on any other document you've signed.
This will help you to avoid running into any problems with your bank or other legal institutes that have your signature on record.
Are there rules for signatures?
The legality of signatures encompasses a range of marks and actions that indicate someone's identity and intent. In the United States, the legal rule follows that unless a document specifically states a certain signature method is required, it can be made in several ways. That means a digital document or another type of file can be signed using handwritten or typed signatures, as long as it's clear that the signer has consented to signing.
What is an electronic signature?
At this point, you might be wondering what exactly is an electronic signature.
According to the ESIGN Act, an electronic signature is:
“An electronic sound, symbol, or process attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.”
It's a legally valid method to attain or provide consent on any electronic document. On a fundamental level, an e-signature does the exact same things like a handwritten one in the eyes of the law.
For example, when signing a contract online, a typed signature would represent exactly what it would on a printed contract—that the signer understands and agrees to the terms identified in the contract.
What are the benefits of e-signatures?
Using typed signatures when signing an important business document yields several benefits.
First of all, it significantly speeds up the process of sending documents back and forth and makes things much simpler. It prevents contract delays from occurring and streamlines the process of coordinating signatures. This means you can get the administrative tasks out of the way quickly, so both parties can both get on with more important tasks.
Electronic signatures also result in less money being spent on paper, document shipping, and materials, as well as other administrative costs.
That's not all though. One of the biggest benefits of signing electronically is that it offers greater location flexibility as those involved can access, edit, and sign forms anytime, anywhere. As a freelancer, this means you and your client can come to an agreement as soon as possible.
There are a few different ways to sign with an electronic signature. You can do it with a mouse-click by ticking a box, or by drawing one using a mouse. You might also upload a picture of your handwritten signature and or simply sign a document with a typed name.
Are electronic signatures legally binding?
Yes, electronically typed signatures are legally valid as long as intent and consent are involved.
Electronic signatures are legally valid as they essentially perform the same function as a handwritten signature on a piece of paper.
In this way, they carry the same weight as pen-to-paper signatures and can replace them as long as they are legally binding in the country of issue. They must also meet three key conditions to be considered legally valid. Those conditions are:
The identity of the person signing the document or contract can be verified.
Their intent to sign the document electronically is clear.
There are records of the contract kept by both parties for integrity purposes.
What is the Electronic Signatures in Global and National Commerce Act?
The ESIGN Act is a United States federal law that ensures the legal validity of electronic records and signatures on important documents. Therefore, e-signatures have carried the same legal weight as handwritten signatures since the ESIGN Act was passed in the United States in the year 2000.
Legally sign documents online with Bonsai
As a freelancer, you're probably wondering how to get started with e-signatures. Tools like Bonsai's online signature maker allows you to type or draw your name to create a legal signature that you can use on important contracts, proposals, and other docs.
If you're a freelancer, you'll benefit from using Bonsai to create a signature in a few minutes and use it to legally mark, consent, and approve a contract and any other agreement with clients. Anything signed with Bonsai's signature tool is legally valid and will hold up in the face of the law.
Bonsai offers a free trial that allows users to create, edit, and esign as many freelance contracts as you like. We've also created a guide on how to digitally sign a PDF to help freelancers who are new to the gig economy.
Bonsai: The all-in-one platform for freelancers
That's not all that Bonsai offers though. Bonsai is a free unified platform for freelancers that integrates and automates each stage of running a business.
With Bonsai, you can create and customize contracts using one of our free contract templates for any type of freelancer. Choose your template, fill in the project details, and integrate it with your invoices.
Once you're done, you can add your electronically typed signature and send it off to be signed by your client. Download the file as a PDF, attached it to an email, and send it directly to your client. What's more, you can track the whole process from the all-in-one Bonsai app.
That means you can spend less time worrying about administrative tasks, and more time doing what you do best. Start free with Bonsai today and start legally signing important business docs to streamline how you run your freelance business.