Ask an Attorney: Wet Signatures vs. eSignatures—Which Is Better?

by Colin Levy |
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You’ve likely heard the term wet signature and may have wondered what the heck is a wet signature?

A wet signature is simply a signature using a pen, pencil, or seal on a physical document. For a long time, wet signatures were commonly used to represent a binding contract.

In 2000, the U.S. Government passed a law which, alongside a companion law, established that electronic signatures could be used to create a binding document if both parties signed electronically. Electronic signatures come in many forms including using tools, clicking on a button on a website, or typing your name into an electronic form.

In Europe, as in the US, electronic signatures have the same legal effect thanks to laws like The Electronic Signatures in Global and National Commerce Act and the Uniform Electronic Transactions Act in the United States, the Electronic Identification and Trust Services Regulation in the European Union.

Because an electronic signature is just as valid as a wet signature, I strongly prefer electronic signatures in today’s fast-paced and dynamic world. I also believe that electronic signatures are more effective. As an attorney and one tasked with many responsibilities and duties, I strongly prefer electronic signatures to wet signatures.

Below, we answer questions such as “What’s a wet signature?” and “When is a wet signature required?” We also discuss why wet signatures can actually be inferior to eSignatures.

WHAT IS A WET SIGNATURE?

Simply put, a wet signature is a signature that is placed on a hard copy of a document.  However, a wet signature does not have to be written as a person’s legal name. In fact, it may take several forms, including their trade name, a word, mark, or even a symbol chosen by the signee. The signee does not even have to use a pen or pencil. Instead, they may make their mark with their thumbprint, a personal seal, or a stamp.

LIVE SIGNATURE VS. WET SIGNATURE

The phrases "live signature" and "wet signature" are sometimes used interchangeably, but they are not one and the same. A live signature is when the signer makes their mark in front of the requester. A wet signature does not have to be done in the presence of the requesting party.

For instance, let’s say that your bank requests that you sign a hard copy of a document. Instead of responding to the nearest location, you can download and print the document. You can then sign (with a wet signature), scan the document, and email it back to the requester.

In this scenario, you have still produced a wet signature, but have not signed the document “live.” Sounds like a lot of unnecessary work, right? We think so too.

WHEN IS A WET SIGNATURE REQUIRED?

While the federal government has authorized the use of eSignatures, some government entities and private businesses have the discretion to require wet signatures. When doing business with such an entity, you must produce the requested type of signature.

WHY INTEGRATE ESIGNATURE TECHNOLOGY WITH CLM SOLUTIONS?

Despite the fact that some entities still require wet signatures, eSignatures are a much more practical solution. Electronic signatures offer substantial benefits when compared to wet signatures, especially when you integrate eSignature technology into your CLM software.

Five of the most significant advantages include:

1. ENHANCED SECURITY

Chances are that you do not know how to differentiate a fake wet signature from a real one. While you could require your signers to use the services of a notary, asking this of them will only add to the complexity of the signing processes outlined above.

By using eSignature technology in conjunction with your CLM workflow, you can enhance document security without making life harder on your clients.

Independent verification processes are a highly effective way to ensure the security of your clients’ documents. These processes are also required for certain forms, such as IRS documents 8878 and 8879.

2. WORKFLOW TRACKING

When you integrate your CRM with eSignature technology, you can improve your workflow tracking capabilities. At any time, you can quickly determine which parties have opened or signed a specific document. This functionality also allows you to identify any parties that are holding up your progress.

Workflow tracking is also extremely important for auditing purposes. With this feature, you will have a detailed “paper trail” of who interacted with your vital documents and what actions they performed.

3. DEAL/CONTRACT ACCELERATION

Your sales team will love having access to eSignature technologies, as software will allow them to close deals faster than ever before. They can eliminate delays from the contract management process, thereby increasing their productivity. Your clients will appreciate the reduced time to close as well. 

4. ACCESSIBILITY

ESignature solutions make your services more accessible for all involved. Your sales team, legal staff, prospective clients, and other parties can easily sign contract documents from anywhere in the world.

By enhancing accessibility, you can streamline the customer experience. Over time, this will help you improve your brand reputation and attract new business.

5. REDUCED WASTE

Integrating your CLM with eSignature technology can help you to reduce your reliance on paper documents. Going paperless often translates to measurable cost savings, as you will no longer rely on expensive printing or scanning equipment as much.

ESIGNATURE INTEGRATIONS FROM MALBEK

Ultimately, while either a wet signature or electronic signature is valid, if you want to keep pace and facilitate growth, there’s no reason not to use an electronic signature whenever possible.

Therefore, it is vital that you integrate your CLM solution with a reliable eSignature provider to streamline contract execution.

Not sure how to facilitate an integration? Malbek can help! We work with popular eSignature vendors, such as DocuSign and Adobe Sign, to provide our clients with safe, efficient eSignature solutions. On top of that, Malbek facilitates all aspects of contract lifecycle management.

To learn more, book your free demo today.

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