The ESIGN Act (Electronic Signatures in Global and National Commerce Act) makes electronic signatures legally binding in all 50 states. But not every "e-signature" tool actually meets the law's requirements.
What the ESIGN Act Requires
For an electronic signature to be legally enforceable, it must satisfy four conditions:
- Intent to sign — The signer must clearly intend to sign the document
- Consent to do business electronically — The signer must agree to use electronic records
- Association of signature with the record — The system must connect the signature to the specific document
- Record retention — The signed document must be stored in a way that accurately reproduces it
Common Compliance Gaps
Many brokerages use e-signature tools that miss critical requirements:
- No audit trail — Can you prove when the document was signed and by whom?
- No tamper detection — Can you prove the document wasn't modified after signing?
- No consent record — Did you capture the signer's agreement to e-sign?
- Poor retention — Are signed documents stored in a durable, accessible format?
What Proper E-Sign Looks Like
A compliant e-signature system should provide:
- SHA-256 document hashing — Cryptographic proof that the document hasn't been altered
- Timestamped audit logs — Every action (view, sign, download) logged with IP address and timestamp
- Signer authentication — Email verification at minimum, multi-factor for high-value transactions
- Long-term retention — Signed documents accessible for 7+ years (standard statute of limitations)
Beyond Compliance
The real value isn't just legal protection — it's speed. Deals that used to take 3-5 days for signature rounds now close in hours. Attorney review amendments that required printing, signing, scanning, and emailing now happen with two taps on a phone.
See how Kevv handles e-signatures with built-in ESIGN Act compliance.