electronic signature

Under the Electronic Signatures in Global and National Commerce (ESIGN) Act, specifically 15 U.S.C. § 7006(5)] , the term “ electronic signature ” refers to an “ electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed and adopted by a person with the intent to sign the record.” The text of 15 U.S.C. 7001(a)(1) explicitly proscribes the denial of a contract’s validity or legal effect solely because it is in electronic form. These articles ensure the legal status of an electronic signature. Yet, many countries are yet to pass laws and regulations for electronic signatures, making it difficult to be incorporated in cross-border businesses.

There are risks associated with using electronic signatures, such as forgery and tampering. There are a variety of technological approaches that help to reduce these risks. One of them is asymmetric cryptography, also known as public key cryptography, which is based on a pair of public and private keys. The former can create a new signature, whereas the latter can verify the authenticity of the newly created signature. (See: Understanding Digital Signatures )

[Last reviewed in March of 2025 by the Wex Definitions Team ]

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