Simple electronic signature - what is it and how does it work?

Overview:

• What significance do simple electronic signatures have for companies?
• What is a simple digital signature?
• Legal validity of the simple electronic signature
• Examples of simple electronic signatures
• Basic advantages of a simple electronic signature
• Digital contract management vs. e-signature solutions?
• The 5 most important advantages of a digital contract management signature solution
• Dropbox Sign - The e-signature module at ContractHero
• Electronic signature process at ContractHero

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What significance do simple electronic signatures have for companies?

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It is well known that contracts are only legally binding when "the ink is dry". You could also say that the signature makes the contract - and this naturally also applies to electronic signatures under digital contracts. It is therefore only logical that ContractHero has dedicated itself to the topic of signatures with the expansion of its digital contract management solution. From now on, ContractHero users can request signatures from their contractual partners directly via the software. In other words, ContractHero is opening up to new contracts. 

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In this blog post, we will clarify what significance this has for the area of digital contract management, which advantages result from this for medium-sized companies and start-ups and which plus points arise in comparison to standalone signature solutions.

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What is a simple digital signature?

As a result of the implementation of the eIDAS Regulation, there are uniform requirements for electronic signatures throughout the EU. Three types are considered:

The electronic signature, also called a simple signature, can be, for example, a scanned or photographed signature, but also a check mark set in a form.

The advanced electronic signature can be technically uniquely assigned to the signatory and enables identification based on uniquely assignable biometric features, such as the IP address, a unique link and a digital audit trail. 

The highest form is the qualified electronic signaturewhich, with a secure signature creation based on a certificate, ensures that it corresponds to a personal signature and is therefore suitable for all transactions in the company.

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‍Legal validity of the simple electronic signature

The simple electronic signature (EES) is widely used in Germany, as many contracts are not subject to any specific formal requirements. Its legal validity is based on the fact that electronic data is added to a document. Nevertheless, it has a comparatively low probative value, as the identity of the person signing is difficult to prove unequivocally. It is therefore ideal for form-free documents with a low liability risk and offers a pragmatic solution in business contexts where no strict legal requirements are placed on the signature.

Legally, there is no precisely defined term for a simple electronic signature. It is generally understood to mean all forms of signature that do not meet the requirements of an advanced (FES) or qualified electronic signature (QES).

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Examples of simple electronic signatures

The simple electronic signature can be used in a variety of scenarios, especially for documents that are not subject to any legal formal requirements and entail a low liability risk. Examples of this are

• An e-mail signature that serves as consent.
• Confirmation of receipt of a parcel by means of a signature.
• A scanned image of a handwritten signature.
• Setting a check mark in a check box as consent in an online form.
• A signature that is made directly on a tablet or smartphone using a touchscreen or smart pencil.
• Typing the full name into a digital document as confirmation.

These use cases demonstrate the flexibility and user-friendliness of the simple electronic signature and underline its relevance for everyday business processes.

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Basic advantages of a simple electronic signature

Speed

With electronic signatures, contracts can be processed much faster. Sending, signing and returning are done with just a few clicks and without the hassle of waiting for the post office. Waiting for paper contracts by post is a thing of the past.

Cost reduction

From time savings to less consumption of paper and ink, less need for maintenance or repair of printers to fewer folders, shelves and, in extreme cases, rooms - electronically signed and digitally filed contracts significantly reduce administrative costs.

Efficiency

Electronic signatures streamline the contract management phases and also enable a high degree of automation, especially when contracts are recorded in appropriate contract management tools. For responsible staff, redundant tasks are eliminated in favour of value-adding activities.

Security

Compared to "wet signatures", electronic signatures offer significantly better legal protection because they are fully traceable and enable the identification of the signatory. Digital storage and appropriate backups can also protect contract files against damage (e.g. fire, water, accidental disposal). 

Conserving resources

Electronic signatures enable a paper-free signature process - in contrast to paper contracts with a minimal footprint in transport, delivery and storage.

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Digital contract management vs. e-signature solutions?

When looking at contract management software and standalone e-signature solutions side by side, one might often conclude that they are in competition with each other. While this may even be true for many providers, the real benefit lies in the combination of the two - for software providers and users alike. By linking the best contract management tool with the best signature service, all sides win.

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The 5 most important advantages of a digital contract management signature solution

1. Both existing, digitised contracts and newly signed contracts can be administered via a single interface

2. Users only need one solution and do not need to export or import between different solutions.

3. Contract renewals, adjustments and amendments also do not have to be imported / digitised but are automatically entered into the contract portfolio

4. The entire chain of contract creation, signing, management and filing can be 100 percent paperless

5. Software providers can concentrate on the core of their solutions and further improve them for the benefit of the users.

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Dropbox Sign - The e-signature module at ContractHero

ContractHero sees itself as a specialist tool for contract management and relies on a high degree of openness for networking with other, often already existing solutions in the digital office. With the latest integration of Dropbox Sign into our software, we are taking the flexibility and efficiency of the electronic signature process to a new level.

‍This integration enables our users to benefit from an extended range of signature options - from simple electronic signatures (EES) to advanced electronic signatures (FES) and qualified electronic signatures (QES). In addition, Dropbox Sign offers seamless and customizable integration into our platform.

By using Dropbox Sign, ContractHero meets all legal standards for electronic signatures and ensures that our users can always rely on a trusted and legally secure solution for their contract management needs."

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Electronic signature process at ContractHero:

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1. The user selects the desired contract from the ContractHero contract overview.
   
   
2. The status of the contract is changed to 'Draft'. The user selects the desired signature type - either a simple electronic signature (EES), an advanced electronic signature (FES) or a qualified electronic signature (QES).
   
   
3. The user can now define specific fields in the contract where the signature should take place. It is also possible to add further information such as the name of the signatory and the date.
   
   
4. The user specifies the order in which the contracting parties should sign the contract and determines whether this should take place simultaneously or consecutively. If necessary, automatic reminders can be sent to the contracting parties if a signature is still outstanding.
   
   
5. The contracting parties receive an email with a link to the contract. After opening the link, the contract can be signed using a mouse, touchscreen or smart pencil, depending on the end device.
   
   
6. Once all the required signatures have been provided, the fully signed contract is automatically saved in ContractHero. Both the sender and the signatories receive a PDF version of the signed contract by email.
   
   
7. ContractHero's dashboard gives users a clear overview of the status of signatures. They can immediately see whether and where signatures are still missing in the contract, which considerably simplifies the entire document management process and makes it more transparent for all parties involved.

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