What is a wet signature?
A wet signature is a physical signature made by hand using a pen or any other writing instrument on a tangible document. It is called a “wet” signature because the ink from the pen is still wet when one signs on the paper.
Wet signatures have been used over the years to signify an individual or a party's consent, agreement, or endorsement of a document. It implies the physical presence of the individual signing the document. It’s a unique signature that can be used to verify the signer's identity.
Other types of signatures
Digital signature
A digital signature is an electronic equivalent of a fingerprint or a wet signature. Its purpose is to ensure the authenticity of a digital document, like a text file, email, or spreadsheet. Digital signatures employ sophisticated algorithms to create a coded message that links a signer to a document. By using this method of signing, it can be guaranteed that the document's contents have not been tampered with since the time of signature. Moreover, digital signatures provide crucial information such as the document's source, its integrity, and the signer's agreement.
Electronic signature
As the name implies, an electronic signature is created and used in electronic format. Like wet signatures, electronic signatures allow individuals to provide their approval and agreement to the contents of a document, but in a digital manner. Electronic signatures are designed to be secure, verifiable, and legally binding. Many software solutions offering electronic signature functionalities adhere to e-signature laws applicable globally.
The terms digital signature and electronic signature are often used interchangeably, but there’s a subtle distinction between the two. Electronic signature is a general term that encompasses any signature transmitted electronically. On the other hand, a digital signature specifically refers to an electronic signature with advanced features that ensure data security and compliance.
An electronic signature is commonly used when security and compliance requirements are relatively less stringent, such as when a manager approves an employee's leave request. However, a digital signature is necessary for documents like contracts that undergo thorough scrutiny and adhere to strict compliance standards.
The difference between a wet signature and a digital signature
A wet signature is the traditional method of signing a document, such as a contract. It requires your physical presence for signature and is considered to have the highest legal recognition and acceptance level.
A digital signature, on the other hand, doesn’t require the physical presence of the signers. A document can be signed on the go. Today, digital signature software comply with laws worldwide and are encrypted, making them as secure as wet signatures.
What are the benefits of a wet signature in contracts?
Legal recognition
As mentioned previously, wet signatures are legally accepted worldwide. They’re directly associated with the signers and familiar to people, lawyers, and courts because they’ve existed for millennia. Several countries mandate certain types of contracts to be physically signed to be legally accepted.
Accessibility
Unlike digital signatures, wet signatures don’t require any access to technologies. This makes it more accessible for individuals who have limited resources and aren’t familiar with digital processes.
Perception of authenticity
Conventional businesses and individuals perceive physical signatures as more trustworthy than digital ones because they’ve been deeply ingrained in business and personal transactions for centuries.
Non-repudiation
Wet signatures are considered to offer a higher level of non-repudiation than digital signatures because it’s difficult for someone to deny their wet signature was forged. However, modern digital signature software offer military-grade encryption and data security features, making them equally authentic.
Is a wet signature more secure than a digital signature for contracts?
Because they’ve been in existence much longer, wet signatures are considered more trustworthy. However, digital signature software have enhanced encryption and security features that make them equally reliable. Some benefits of digital signatures for contracts include the following:
Better security
One of the key advantages of digital signatures is enhanced security. Concerns about signature tampering have become a thing of the past. Digital signature software employ robust encryption methods, often on par with military-grade standards, and adhere to e-signature laws worldwide. This ensures that the signing process is secure and legally valid.
Faster contract turnaround times
Contract turnaround times have significantly improved with the introduction of digital signatures. Previously, contracts had to go through a laborious process of being physically signed, shipped/faxed/scanned back and forth for counter signatures, and filed, resulting in lengthy turnaround times. However, digital signatures have revolutionized this process, reducing the time required for signing from days or weeks to minutes.
Minimized operational costs
Adopting digital signatures can lead to reduced operational costs for companies. The logistics and expenses associated with managing physical documents, such as printing, shipping, and storage, can be significantly minimized. In business, where time is often equated with money, the implementation of digital signatures can result in execution cycle times being reduced by more than 90%.
Improved compliance
Digital signatures promote better compliance because they’re widely accepted and comply with global laws and regulations, such as the ESIGN Act in the United States, and the eIDAS regulation in the European Union. These stringent government regulations necessitate the highest safety standards for digital signature software.
Easy traceability
Digital signature software also provide the benefit of traceability. They create a comprehensive audit trail with timestamps, facilitates record-keeping, and offers valuable information in legal proceedings where the chronological order of events is crucial.
Do all contracts need wet signatures?
Wet signatures aren’t necessary for all contracts. Certain contracts can be established verbally. These contracts, often called handshake agreements, involve discussions and mutual agreements without a signature to hold legal validity.
When it comes to written contracts, although electronic signatures generally suffice for the legal validity of most contracts, certain agreements necessitate handwritten signatures and physical documentation, such as stamp papers, to be legally binding and enforceable in courts. It’s important to note that these specific requirements can vary depending on the region and its corresponding laws.
- Power of attorney agreements
- Wills
- Contracts related to the sale or transfer of immovable property and any associated interests
- Trust deeds
- Negotiable instruments other than checks
Be aware that while wet signatures are typically required for the documents mentioned above, in some cases, using a digital stamp paper is also deemed acceptable for ensuring the legal enforceability of the contract.
Get all types of signatures using a contract management software
Contract management software lets you collect all kinds of signatures while streamlining your contracting process. Most CLM tools come bundled with e-signature capabilities that facilitate secure and quick signing of contracts. They also integrate with software that facilitates e-sign on digital stamp paper that is legally valid.
Modern CLM systems, such as Zoho Contracts, while offering built-in e-signature capabilities, also allow you to get wet signatures by taking a print of your contract document and re-uploading it on the software.