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Difference between electronic and digital signatures

The two terms, electronic signatures and digital signatures, are often used interchangeably. To add to the confusion, some languages don’t make a distinction. However, understanding the difference is key to asking informed questions about the legal validity of agreements signed electronically, including the integrity of your documents.

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Digital signatures explained

A digital signature, also referred to as “sealing a document”, is not a signature in the legal sense. Rather, it’s about document integrity, which means that in the event of a dispute, you can prove that no one has altered the original document. It’s like a fingerprint that is unique to that document. As with our own human fingerprints, it’s practically impossible for any other document to have that same digital signature. Thus, any alteration of the original document will result in a failed validation of the digital signature meaning that the integrity of the document has been compromised.

What a digital signature is not:

  • A method for encrypting documents.

  • A method for securely archiving your documents.

Electronic signatures explained

An electronic signature is a method for entering into a legal agreement in a digital environment. Think of it as the digital equivalent of signing your name on a paper document, such as a sales contract, where your signature manifests your intent to be bound by the contents of the contract.

In a digital environment you may manifest your intent in various ways, e.g. by clicking on a button or drawing your signature with a mouse, touchpad or other input device, the essential criteria is that when performing that action, you understand that you are signing, and thereby have the intent to sign .

An electronic signature is in the simplest form, according to the EU eIDAS Regulation, “data in electronic form which is attached to or logically associated with other data in electronic form and which is used by the signatory to sign”. This can be achieved in many different ways as explained above, and the eIDAS Regulation establishes that even (simple) electronic signatures have legal effect.

The eIDAS Regulation does also define two higher levels of electronic signatures: Advanced Electronic Signatures (“AES” or “AdES”) and Qualified Electronic Signatures (“QES”). These more secure forms of electronic signatures are sometimes required by law for certain types of documents. Other times, they are not legally required, but recommended to mitigate business risks.

In the corresponding US legislation (the ESIGN Act and UETA), there is no differentiation of levels of electronic signatures: an electronic signature is defined only as: “an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.”