What is a Wet Signature and Why Should I Know About It?

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A wet signature is a phrase that characterizes the process of a party signing a physical document, form, or contract with pen or ink. Prior to the digital age, a wet signature was required on all documents to make them legally binding. Today, this term is often used to distinguish documents physically signed with a pen and paper versus electronic signatures, also known as e-signatures.

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It is important to identify what type of signature is required on a document, form, or contract because there are some instances that require a wet signature in order to prevent the possibility of fraud. For example, when selling a home, the title company requires a wet signature to ensure the actual owner or owners are releasing the property. If the seller is out of town, the seller or sellers would need to wet sign in front of a notary and mail the documents to the title company.

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Some documents that require a wet signature to make them legally binding are:

• Wills
• Trusts
• Adoptions
• Divorce Proceedings
• Court Orders
• Evictions
• Insurance Benefits
• Bank Loans

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Prior to entering the digital age, a wet signature was the standard for all legal documents to be binding. This is no longer the case with the creation of electronic signatures. Since electronic documents and point-of-sale systems have become more prevalent, wet signatures are becoming rarer. Some downsides to wet signatures are that it is very time consuming and takes up considerable physical space to retain documents for future reference. Imagine if the procurement department of a large enterprise had to physically sign hundreds of paper contracts and store them in a file room. The team would spend entire days signing documents and organizing piles of papers. The ability to sign contracts electronically has streamlined the contract management process.

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There are now 4 different types of signatures that are legally enforceable on contracts and other agreements. The difference between the signatures are primarily related to the levels of security required.

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1. Wet Signatures
2. Basic E-Signatures
3. Secure E-Signatures
4. Digital Signatures

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Basic E-Signatures

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Basic e-signatures attempt to mimic a wet signature. An example of a basic e-signature is scanning your signature and uploading it as a PDF or into a Microsoft Word document. You can also use a hybrid e-signature by signing on a touchscreen with a finger or stylus. A PIN entered in a bank ATM and choosing “accept” or “disagree” on a digital end user license agreement are both examples of e-signatures.

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E-signatures have many advantages over wet signatures. Signing documents will be completed much faster and there is no need to print, mail, or store paper copies. Additionally, storing, accessing, and distributing documents will be considerably faster via a digital search functionality.

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Secure E-Signatures

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Even though a digital scan of your signature in a Microsoft Word document can make an agreement legally enforceable, you still need to deal with file security. Secure e-signatures provide an additional layer of protection especially if you employ online forms on your website.

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For example, a secure e-signature application that complies with ISO/IEC 27001 Information Security Management can automatically generate a certificate that is appended to the document which includes date, time, IP address, and email of the signee.

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The signatures will be kept on safe servers. The secure e-signature serves as a digital notary to confirm who signed the document, when, and where.

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Even secure e-signatures have risks. Depending on the vendor selected, the vendor may require you keep documents on their servers, which raises questions on how well customer data is protected. Also, different providers offer different levels of security, so it’s important to understand what security you are and aren’t getting. 

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Digital Signatures

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The last type of e-signature this article covers is a digital signature, but it’s more secure. Beyond the intrinsic security advantages of using digital signatures, advertising your use of them demonstrates your dedication to data protection as part of your brand positioning.

A certificate of authority is used with a digital signature to confirm the legitimacy of the signer. To ensure it was not altered, intentionally or unintentionally, the document is securely encrypted utilizing Public Key Infrastructure (PKI) protocols.

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In order to implement digital signatures, your organization will need to acquire a Digital Signature Certificate (DSC), which has a yearly subscription cost of $1,000 or more depending on the security package chosen.

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Since encrypting, generating, and verifying digital signatures doesn’t happen instantaneously, your organization will need to account for a lag time. This is important to consider if you’re constantly exchanging documents.

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Which Signature Should My Organization Use?

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In most cases, electronic signatures have replaced traditional wet signatures since many business transactions now happen digitally. Electronic signatures streamline the contract management process because it’s much faster and you don’t need to store physical documents. Wet signatures are usually required on the most secure documents like wills, court orders, and adoptions. The most common form of a wet signature is when a document requires a public notary. It’s important to distinguish which type of signatures are required on a document, contract, or form to be legally binding. This is determined by the level of security required on the document.

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