Electronic signatures are legal, but…

Nov 9, 2020, 09:01 AM by Riaan De Villiers
Electronic signatures are legal and easy to use but they do not always offer the best protection. Today is the first post in a series of posts about electronic and digital signing. First we will look at the inherent weaknesses in electronic signatures. Next week we will discuss digital signatures and how they offer the best protection.

Electronic signatures are legal, but…

Digital signing

Signing paper documents have been used for centuries as the trusted mechanism to make the signer accountable so that another party can rely on the document.

In 2002, the South African Electronic Communications and Transactions Act (ECT Act) was signed into law. The act gives legal recognition to electronic documents and recognizes that electronic documents and electronic signatures are equivalent to their paper counterparts.

According to the act, any mark that is made on an electronic document with the intention to serve as a signature is seen as an electronic signature and in South Africa it is considered to be legal.

In this age of digital transformation, the ability to electronically sign documents holds a lot of advantages for organisations. The first business case that comes to mind is cost savings.

Moving away from paper, organisations can reduce the cost of

  • printing,
  • couriering,
  • copying,
  • faxing,
  • storage,
  • retrieval and
  • destruction.

Furthermore, the turnaround on document signing processes are greatly reduced since the paper document does not have to be physically moved from one signer to the next. Documents can even be signed while the signer is travelling.

Do not forget, electronic signatures and the reduction of paper consumption can help an organisation reduce their impact on the environment.

There is however a downside to electronic signatures. Unlike digital signatures, electronic signatures do not embed any evidence into the signed document and as a consequence can easily be disputed.

Firstly, the signer can dispute having signed the document since there is no evidence tying the electronic mark on the document to the identity of the signer. The signatory can supply auxiliary evidence in the form of audit logs or a one-time-pin but in the case of a dispute where a large sum of money is at stake, this is not an ideal solution.

Secondly, electronic signatures does not protect the integrity of the document so a signer can easily claim that the document has been tampered with after they have signed the document. There is only one way to truly protect the integrity of a signed document and that it to protect the document with cryptography.

This is not to say that electronic signatures are not useful. Because they are easy to apply, electronic signatures are ideal to sign documents where there is not a big risk in the case of a dispute. Documents ideally suited for electronic signatures are memos, attendance registers, leave claims, expense claims, visitor forms, etc.

Next week we will discuss how digital signatures protects signers against the inherent weakness of electronic signatures.

Ready to learn more? Take a look at all LAWtrust's signing solutions.

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