Is a typed signature legally binding? And other questions

What is a typed signature? Typed signatures explained.

Since ancient times, various types of signatures have been used to indicate agreement to  contracts. Until recent years, most signatures were handwritten on paper, what is known as “wet signatures”. However, since the late 90s and early aughts, as processes across industries were digitized at ever-increasing rates, typed signatures have become much more common. 

A typed signature is exactly what it sounds like​​—an electronic symbol or process associated with a record or contract. Typed signatures are basically equivalent to handwritten signatures, only they are created in a digital environment. However, there is a lot of variation between platforms and industries, and not all typed signatures are legally binding. To further complicate matters, the laws regarding typed signatures vary from country to country. To make it easier to understand, we’ve broken down what you need to know about typed signatures and explained why they have become such a crucial element of the customer intake and other processes in many industries.  

Typed signature vs electronic signature

Before looking into how typed signatures are used, let’s define what they are. First of all, the terms “typed signature” and “electronic signature” or “eSignature” are often used interchangeably. 

US federal regulations define electronic signatures 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.” That includes typing your name or PIN into an online form—the action that is most commonly thought of as a typed signature—but can also be can be anything from clicking “agree” on a website to using your finger to create your handwritten signature on a mobile device to a comprehensive eSignature solution using a dedicated API.

In some cases, a basic typed signature is enough. In other cases, an advanced electronic signature is required. These signatures have an "electronic seal" attached to them and are transmitted through an "electronic registered delivery service" that can provide evidence regarding the handling of the transmitted data. 

Another term that is often confused with typed signatures is digital signatures. The term “digital signature” is usually used to describe what is also known as “qualified electronic signatures” or signatures that have various protection mechanisms that prevent anyone other than authorized persons from editing or tampering with the signature.  Qualified eSignatures must have a certificate based on public keys that were issued on a cryptographic card (or equivalent device) with a double factor of authentication. There also must be prior identification of the signatory by an audited entity.

Benefits of using a typed signature

Typed signatures have many benefits including, but not limited to the following. 

Environmentally friendly

Companies that rely on handwritten signatures generate an enormous amount of paper waste. Typed signatures generate much less waste, making them a more environmentally friendly choice for businesses. 

Customer experience

The most significant benefit of a typed signature is in the customer experience. Instead of having to come to a physical office to sign documents, or deal with the hassle of printing, signing, and scanning the signed documents, customers can verify documents easily on their preferred device as a seamless part of whatever process they are implementing. 

Fraud prevention

As any child who has ever had an unexcused school absence knows, it’s very easy to forge a signature. The validity and attribution of wet signatures can only be established by the careful comparison of copies of the signature of the person in question. This is time-consuming, expensive, and also error-prone. Typed signatures are more difficult to forge and easier to verify, making them a better and more efficient alternative in most circumstances. 

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What are the legal implications of using a typed signature?

When using typed signatures, it’s important to ensure that they meet the specific requirements of the country and circumstances where they are being used. For example, the eIDAS regulation details three levels of electronic signatures for the members of the European Union, and when and where each can be used.  US federal regulations detail the requirements for use in the United States, and other countries each have their own unique set of laws.  

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In general, contract law in most countries requires that any signature, handwritten or electronic, have three key components: intent, identity, and integrity. Intent means that you must be able to show that the person who signed the document did so with the intent of entering into a binding agreement. In addition, you must be able to verify the identity of the person signing the contract. Integrity means that you must be able to prove that the document was not altered after it was signed. 

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Yet typed signatures can’t be used in all circumstances. The laws that determine when they can and cannot be used vary from country to country, but in the United States, typed signatures are not legally binding in the following cases: 

• The drafting/validation of wills, codicils, and testamentary trusts
• The creation of official court documents
• The development of adoption, separation, or divorce agreements
• Termination of life insurance benefits
• The documentation for the handling of hazardous/toxic substances during transport
• The creation of any contracts governed by the UCC (Uniform Commercial Code)

Typed signature usage by industry

Typed signatures can be used in almost any industry and are particularly effective in business-to-consumer (B2C) companies that conduct large volumes of customer transactions with significant legal ramifications. These include: 

Banking

Banks traditionally used time-consuming, clunky paperwork-heavy processes for common actions like opening accounts and modifying loans. By transferring to typed signatures, banks allow their customers to complete entire transactions and processes on a single channel and save the resources needed to collect and process the enormous amount of paperwork. 

Insurance

Onboarding insurance clients and processing insurance claims always involves copious paperwork, including statements, evidence, and other supporting documents. Getting handwritten signatures for all elements needed in an insurance claim often involves a lengthy back and forth between agents and the customer that delays the processing of the claims, frustrates customers, and drives up costs. Transforming these processes into digital journeys with typed signatures simplifies the process for customers and saves organizational resources for the insurance provider. 

Healthcare

Patient intake and many other healthcare processes require that patients sign waivers agreeing to the treatment that they are about to receive. Collecting and processing this type of documentation in real time can be made much easier and faster with typed signatures. 

Are there any risks associated with using a typed signature?

There are many different types of typed signatures and some are much riskier than others. Basic typed signatures do not include protection from tampering or a way to track changes to the document. Therefore it’s important to choose your typed signature option carefully and select one that generates a legally-binding document that tracks every action taken on a digital form for quick and easy verification and to prevent fraud.

How to utilize typed signatures in your customer intake processes

Typed signatures are an important element of a seamless and intuitive digital customer journey, from customer intake to ongoing activity and processes. Instead of disrupting the customer journey, typed signatures can be integrated into it, reducing friction and the risk that the customer will abandon a process before it is complete. 

Solutions like EasySign make it easy to integrate typed signatures into your customer journey, and also meet legal requirements by offering various identification options and an audit trail to ensure document integrity. EasySend’s eSignature API even allows you to trigger signature requests within existing online forms and processes. The secure and scalable two-way integration works with your existing CRM, so you can automate link sending and form signing while streamlining your data collection and file generation. This typed signature solution for enterprises makes it easy to turn any manual process into a digital experience.