Electronic Document Transmittals and Options for Electronic Signatures
December 19, 2016
John W. Carpita, PE
Remember when you actually had to circulate paper documents for signatures and the process would take weeks to complete? Fast-forward to today when most documents can be circulated—and even signed—electronically in a matter of days, if not hours.
In this post, we’ll explore three levels of sophistication with respect to electronic document transmittals and electronic signatures. As noted in Electronic Signatures, Submissions, and Bids for Local Governments, a statutory 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.”
The range of electronic signature and document transmittal options is broad. A basic level is to circulate electronic copies via fax or email attachments for signatures on temporary paper copies that are then scanned and sent back to the originating person. A second level is to have other signatories affix a graphic, whether a facsimile signature or agreed upon clipart, or to use a “signature” created with a stylus and a touchscreen (like at a Costco checkout). The third level is to use digital signatures that require differing degrees of encryption, password protection, and authentication.
Level 1: Using Email and PDFs to Circulate Documents for Signatures
This question, about whether fax and/or PDFs of electronic signatures are acceptable and enforceable, was posed to one of our consultants:
For a professional services contract, are we required to maintain an original paper copy with original signatures? Our Mayor signed one copy, scanned it to a PDF file and then emailed it to the other party for them to sign, with the request to email it back to us as a PDF. Is that acceptable?
Our response was:
Practically speaking, the net result is an electronic copy that can produce—using a color printer—a printed copy that would probably be indistinguishable from an original. The question though, is really: “Are fax signatures and PDF signature pages valid to indicate assent to the term of a contract and are they enforceable?” MRSC has looked at the fraud statutes and case law in Washington and concluded that faxed and PDF documents with signatures are generally acceptable.
Signatures in faxed and PDF documents are also accepted in other parts of the country. That said, this method works best for straightforward agreements/contracts with relatively low monetary value and risks. You should consider using electronic signatures for more complicated transactions.
Level 2: Using Electronic Signatures in the Electronic Document Transmittal Process
Electronic signatures require that signatures be uniquely linked to, and capable of identifying, the signatory. Electronic signatures provide a higher, advanced form of authentication that meets the more stringent requirements often imposed by financial institutions and federal/state grants.
PDF software programs like Adobe Acrobat give users the ability to create certificate-based, digital IDs using a customized signature that can then be uploaded as a graphic. This can be accomplished in two ways:
- Signatories can use a stylus and touchscreen to create a “signature”, or;
- Signatories can sign a piece of paper and scan the signature via an external scanner or a digital camera.
You have the option to lock the current document once it’s been signed, or to create a space for other parties to insert additional signatures. In the latter case, the PDF file can be sent to additional signatories and, once signed, copies of the newly signed document will be distributed automatically to all parties.
To test this feature, I signed documents in Adobe Acrobat on my home computer and sent these to my office email for additional signatures. The process worked smoothly because my home computer has the latest version of Adobe Acrobat, including an add-on called Adobe Sign. However, it did not work as smoothly when I tried the process in reverse by sending a signed PDF from my work to my home computer. This is probably an indication that I need to update the version of Acrobat on my office computer (which I've done), but it underscores the important point that all potential signatories should have compatible software.
Level 3: Using Third Party Verification to Encrypt Digital Signatures
Qualified digital signatures require certificates that are issued by a trusted, accredited certificate authority (CA). These certificates must be stored on a qualified signature creation device such as a USB token, smart card, or a cloud-based hardware security module.
Trusted CAs include any number of commercial, third-party providers, such as Comodo, Symantec, or GoDaddy. Local government agencies can also become CAs. CAs provide yet another layer in ensuring that the signature is, in fact, from the signatory.
Traditional electronic signatures refer to any electronic process that indicates acceptance of an agreement or a record. Electronic signatures:
- May use a wide variety of methods to authenticate signer identity, such as email, enterprise ID, or phone verification
- Must demonstrate proof of signing using a secure process that often includes an audit trail along with the final document
Digital signatures use a specific method to sign documents. Digital signatures:
- Use a certificate-based ID to authenticate signer identity
- Demonstrate proof of signing by binding each signature to the document with encryption-validation, done through trusted certificate authorities
You will want to consult with your IT folks about traditional electronic and digital signatures, as well as when it may be prudent to use a certificate authority. Don’t be left behind in the digital revolution!
Do you have any questions or comments about electronic signatures and documents? Are there other public works, purchasing, or bidding topics you’d like me to write about? Leave a comment below or contact me directly at firstname.lastname@example.org.
MRSC is a private nonprofit organization serving local governments in Washington State. Eligible government agencies in Washington State may use our free, one-on-one Ask MRSC service to get answers to legal, policy, or financial questions.