Digital signature vs electronic signature: what’s the difference?

April 24, 2023

Despite what many think, digital signatures and electronic signatures are different things, and they perform different functions. This guide covers the differences between the two in more detail and why businesses often need both. 

What is an electronic signature?

An electronic signature is a digital markup added to a contract to show that the parties have agreed to the contract’s terms. Electronic signatures replace wet ink signatures, which are added to physical copies of a contract. 

Rather than having to physically add an impression, mark, or name to a paper contract using a pen, electronic signatures enable legal and business teams to create these signatures online instead. These electronic signatures demonstrate a party’s willingness to agree to certain contract terms, and so are legally binding as a result. 

Electronic signatures can be created in lots of ways, and you can find guides to each approach below:

However, the best and most efficient way to create an electronic signature is by using electronic signature software. DocuSign is one popular example of an eSigning solution used to sign contracts online. However, there are plenty of alternatives to DocuSign that might suit your business better in terms of budget and functionality.

What is a digital signature?

A digital signature is a method used to ‘seal a document’ and provide evidence of the document’s integrity and authenticity. It isn’t a signature in the legal sense, but rather a safeguard against tampering and forgery when managing different legal documents

Confusingly, a digital signature doesn’t look like a handwritten signature at all. Instead, it is a digital record that helps businesses and authorities to identify documents and protect them from being tampered with, forged, or replicated in some way.  This helps to ensure that the person signing a contract is who they claim to be and that the signature hasn’t been interfered with in any way. 

Unlike electronic signatures which use more basic authentication methods to verify signer identities, like phone PINs and email addresses, digital signatures rely on more advanced authentication processes, like certificate-based IDs. 

Juro’s native eSignature functionality achieves this same level of security by using strict identity verification processes, like collecting IP addresses, creating timestamps, and creating a detailed audit trail for all contracts created and signed in the platform.

This means that Juro users benefit from the security of a digital signature and the legal validity of an electronic signature - all with one tool. To find out more about Juro’s advanced electronic signature functionality and stringent security measures, hit the button below. 

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Is a digital signature the same thing as an electronic signature?

Although some people use the terms digital signature and electronic signature interchangeably, they are different features and they perform different functions

Both digital signatures and electronic signatures add authenticity and integrity to documents. However, they do this in different ways. Digital signatures make it possible to identify specific documents, whereas eSignatures demonstrate the intent of a signatory to be legally bound by the terms within a specific document.

For example, Juro’s advanced electronic signature functionality allows legal and business teams to sign contracts electronically using any device. But it’s Juro’s digital signature properties that ensure contracts are signed legitimately and remain tamper-proof.

This means that although they are not the same, digital signature technology can be used alongside electronic signatures to make them more secure.

What is the difference between a digital signature and an electronic signature?

The main difference between a digital signature and an electronic signature is that digital signatures are used to seal and identify a document to protect it from forgery. By contrast, electronic signatures are used to make sure that the terms within a document are treated as legally binding, so long as the document has been marked with an eSignature.

1. The purpose 

One of the biggest differences between digital signatures and electronic signatures is that they are used to achieve different purposes

For instance, the main purpose of a digital signature is to secure the document and verify that it hasn’t been tampered with, altered, or forged. However, an electronic signature is used to indicate that a signer is actively and knowingly entering into a binding agreement or contract. 

This means that whilst digital signatures are used to prove the authenticity of a document, an electronic signature is evidence of an agreement to the terms of a document more specifically. 

In most cases, the two types of signature work simultaneously to ensure that contracts and other agreements are legitimate and legally binding. 

2. Common use cases 

Since the purpose of digital signatures and electronic signatures differ, they are often used in different ways and contexts too. 

Electronic signatures are commonly added to business contracts to show that a signatory chooses to agree with the terms laid out by the other party. By creating an electronic signature, a signatory will demonstrate its intention to create a legally binding relationship and fulfill the obligations set out for both businesses. 

On the other hand, digital signatures are often used by certification authorities or trust service providers, rather than commercial teams seeking to close a deal. These bodies will validate the digital signatures and verify the digital document. 

3. How they’re created

Whilst electronic signatures can be created by contract parties in Word or PDF, or even using Juro’s native eSignature feature, digital signatures are not created by people. 

Electronic signatures are created and added to contracts by individuals and teams signing or marking the document in some way. 

Digital signatures, by contrast, are created by software and algorithms. This relies on an advanced method called Public Key Infrastructure (PKI), which is a set of processes, hardware, and software that combines to ensure data is transferred securely by generating two keys - a public and a private one.

4. How easily they’re created

Since digital signatures rely on strict security mechanisms and processes, it is often more challenging to deliver a digital signature than it is an electronic signature. 

This is because there’s often no validation process for standalone electronic signatures, whereas when a digital signature is added to a document, the user’s identity is verified and cryptography is used to bind the digital certificate. 

Fortunately, legal and business teams can benefit from the security of digital signatures and the legal validity of electronic signatures with ease using Juro. 

Juro’s native eSignature feature enables users to sign contracts quickly and easily, with the platform creating an immutable document record and an audit trail of key actions on their behalf. This makes getting contracts over the line seamless, without compromising on security.

To find out more, book a personalized demo to see Juro’s eSigning functionality in action. 

5. Level of security 

The idea behind digital signatures is that they are not susceptible to tampering or being altered, which makes them more secure as a result. 

Digital signatures often provide a detailed audit trail which enables parties to identify if and when specific changes have been made to a document, as well as when it’s been signed and by who. 

Unlike digital signatures which use cryptographic encryption methods, electronic signatures don’t necessarily need to meet the same stringent requirements as digital signatures. This is especially true if you create an eSignature in a Word editor that isn’t designed with legal document security in mind. 

This isn’t true for all electronic signatures though. Electronic signatures can be created in a platform like Juro instead where security and integrity are guaranteed by default. 

Digital signature vs electronic signature: which do you need?

Electronic signatures and digital signatures perform different functions, so it isn’t a case of deciding which one is best. Instead, businesses should consider what level of security and integrity they want to achieve when agreeing contracts online, and whether they need both. 

If you’re looking for a simple way to add sign agreements, most electronic signature software will be sufficient. 

But if you want to enhance the security of your contracts and reduce the risk of forgery and tampering, you’ll likely want to strengthen your electronic signature functionality by adding a digital signature too. 

Juro’s collaborative contract management platform combines the ease of eSignature and the security of a digital signature, allowing you to manage and sign contracts securely in one platform. Fill in the form below to find out more. 

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