As early as the nineteenth century, “electric” signatures via telegraph were common and legal. Today, electronic signing is legal almost everywhere in the world. Why is adoption so poor in the United States?

U.S. President Bill Clinton signed the ESIGN bill into law in 2000. The law’s primary goal was to clarify the status of electronic signatures and to encourage adoption among government agencies. An electronic signature, including a reproduction of one, has the same legal weight as handwriting. And courts may not ignore or dismiss electronic signatures simply for being electronic. The first legal affirmation of electronic signatures, however, came 150 years earlier.

Early History of Electronic Signatures

The 19th century saw telegraphic signing become commonplace. Orders for the purchase of goods were regularly conducted by wire, the validity of which rested entirely on telegraphic, rather than handwritten, signatures. This practical approach to contracts was borne of necessity in a time when the round-trip travel of documents could take as long as it takes today.

By 1869 in the U.S., the legal status of telegraphic signatures was established. With great prescience, the New Hampshire Supreme Court ruled that a signature is valid even if it is sent by wire:

…it makes no difference whether that operator writes the offer or the acceptance in the presence of his principal, or by his express direction, with a steel pen an inch long, attached to an ordinary pen holder, or whether his pen be a copper wire a thousand miles long.

Howley v Whipple, 48 N.H. 487 (1869)

What Is a Signature, Anyway?

Signatures serve important functions which make them useful. It is the function of a signature, not its medium or method, which defines it. These functions include:

Identification
Signatures are unique enough to distinguish among individual signers.
Intent
A signature clearly indicates a signer's intention to sign.
Authorization
Within the context of a signed document, the signature authorizes its contents. This includes simple acknowledgement or knowledge up to agreement and obligation under the terms of a contract.
Recordkeeping
Signatures are recorded. Ephemeral communications do not qualify as signatures.

The normalcy of electronic signing in some domains belies its absence in others. Electronic signing is common for credit card transactions in the United States (even as the rest of the world uses the more secure PIN). Most technology services also rely on forms of electronic signing. But major holdouts still exist. Namely banking, government, other large enterprises, and a long tail of small- to medium-sized businesses.

Poor Adoption

There are at least a few reasons for the poor adoption of electronic signing in the United States. The first is institutionalization. Wet-ink signatures are enshrined in both law and practice. Where obvious economic incentives exist, for example to speed point-of-sale transactions, electronic signing is a no-brainer. Government, however, lacks the same impetus. Absent a clear requirement and practical guidance on transitioning, ESIGN legislation doesn’t effectively compel government agencies to act.

The second reason for poor adoption is a general lack of understanding of the function of signatures. Signing is strongly associated with the act of putting pen to paper. So strongly that it can interrupt an otherwise rational, electronic workflow:

We find ourselves in an era where document generation, editing, exchange, routing and archiving are all done electronically. Yet, [by] the single act of signing we are suddenly transported to the pre-digital age, print out a hard copy, uncap our ink wells, flourish our quills, and sign.

“Putting Down the Quill”, Huffington Post

The third reason for poor adoption is technical complexity. Wet-ink signatures are so simple that children learn to make them. Electronic signatures may test the limits of technology literacy in the United States. Simply choosing an approach is still difficult. The commercial landscape is fragmented with competing standards, even for the more secure and narrowly-defined digital signature. Greater industry cooperation is needed to arrive at simple, usable standards.

Let’s Use Electronic Signatures

The good news, to paraphrase the aforementioned court ruling, is that the choice of underlaying technology for an electronic signature is as irrelevant as the pen used for a wet-ink signature. The next time you reach for a pen with which to sign, take a moment to check on an electronic alternative. A quick internet search is all it takes.