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September 29th, 2023

What is the difference Between a Digital Signature and an Electronic Signature


It’s common for teams to use the words digital signature and electronic signature interchangeably. In reality, digital signatures and electronic signatures are two different things. This confusion can lead to legal and business teams using the wrong tools to sign contracts or suffering from a lack of security.

A digital signature is only used to protect documents and is certified by certification authorities, while an electronic signature is associated with a contract the signer agrees to. Here’s more information on what these concepts mean.

What are digital signatures?

A digital signature safeguards against tampering and forgery when managing different documents. It’s not a legal signature but compels an electronic document to carry with it evidence of its authenticity and the data in the document itself.

Electronic signatures are more basic and depend on passwords and email addresses to confirm your identity. On the other hand, digital signatures rely on advanced authentication methods like certificate-based IDs to confirm how you want to sign.

When you sign a document digitally, it creates a way to identify the document. This ensures that the person who signed the document is who they claim to be, and that the signature hasn’t been forged in any way. It also protects documents from tampering by creating a detailed audit trail. All interactions with a contract or legal agreement can now be traced to where they originated and how they were used.

Two components are created when a digital signature is applied to any document: the digital certificate and the digitally-signed data. These two components make up the complete digital signature, and it’s possible to authenticate their origin because they are unique. The following actions can be performed with this operation:

  • Valuing documents and producing credible evidence.
  • Ensuring that there are no changes in the document after it has been signed.
  • Confirming the identity of the person who signed the document.

What are electronic signatures?

An electronic signature is an alternative to physically signing contracts. Electronic signatures are just one digital signature, a process associated with signing a document or contract. They include any electronic symbol or sound that is generated by the interested party and intended to act as their signature. With this, you don’t have to worry about getting ink onto your hands or using a wet signature.

What’s a contract without some signatures? Electronic signatures have been around for years and serve an important function. With this option, parties can sign a contract electronically without needing their physical signature. These electronic signatures are legally binding, as a legally binding agreement is agreed upon by the party when the electronic signature is put in place.

An electronic signature is an automatic, digital way of signing something to make it legally binding. For example, when two people agree on a contract with certain obligations, it becomes legally binding if both parties sign it. In this case, you can use an electronic signature. Electronic signatures are also often used in contracts because they are easy to use and make it easier to verify signatures by cutting out the paper trail.

The content in an electronic signature is verified to help confirm the document’s authenticity. Typically, electronic documents can be hard to verify because they don’t have digital certificates. Unless the document is signed with a private key, it may not be possible to be sure of what you’re decrypting. Hence an electronic signature can help ensure your process is secure to follow.

A digital signature is a legal tool used to seal and identify a document to safeguard it from fraud. Electronic signatures, conversely, legally bind a document’s terms as long as the document has been marked with an eSignature.

Digital and electronic signatures are often used together in business, but there are a couple of differences. These differences include the following:

  • 1. Ease of use

    Electronic signatures are less secure than digital signatures because they don’t involve strict security mechanisms or processes. When you use a digital signature, the user’s identity is logged and bound to the digital certificate with cryptography. Because electronic signatures can’t be validated, it is more challenging to deliver them than using a digital signature.

    Legal teams can benefit from options that make it easier to sign contracts or agreements, such as signing with a digital signature. MSB Docs’s native E-Signature feature creates an immutable document record and an audit trail, enabling users to sign contracts quickly and easily. This option doesn’t sacrifice security for ease of use.

  • 2. Level of security

    Digital signatures provide additional security for sensitive documents. Documents signed with a digital signature cannot be tampered with or altered without detecting the change. Digital signatures also usually have a detailed audit trail that makes it easy to identify changes and who made them.

    While digital signatures must meet specific requirements for authenticity, like encryption methods, electronic signatures do not have the same rigorous security measures. This can make them less secure than digital signatures.

  • 3. Use cases

    There are many cases where electronically signed documents differ from paper documents. Electronic signatures are most commonly used on business contracts to show that a signatory wishes to agree to the terms discussed by the other party. By adding an electronic signature, a signatory will demonstrate their intent to establish a legally binding agreement and fulfill the obligations specified for both parties in the business contract.

    On the other hand, digital signatures are often used by certification authorities or trust service providers. For example, these bodies will validate and verify your digital signature.

  • 4. Purpose of use

    The biggest difference between digital and electronic signatures is their use. For example, while a digital signature is used to protect a document/record and verify it hasn’t been tampered with or altered, an electronic signature is commonly used to indicate a person is giving consent to enter into an agreement or contract.

    Generally, both kinds of signatures are used in contracts and other documents for verification purposes. While digital signatures are used to authenticate the legitimacy of documents, an electronically-signed contract is evidence of an agreement to its terms – more specifically.

Digital signature vs. electronic signature: Which one is right for you?

Digital and electronic signatures do different things, so choosing one or the other isn’t the case. You should consider what level of security and integrity you want when signing contracts online. Do you need a simple way to agree to a contract’s terms electronically? Any electronic signature software would probably be sufficient for this use.

Whereas, you likely want to add a digital signature to your e-contracts for security and protection. You can strengthen your electronic signature functionality by installing a digital signature.