Impact of Digital Signatures on the Future of Business Contracts


The development of digital technology has had a significant impact on the business industry, from marketing and sales, to HR, and even how to sign contracts. From what was originally done manually by affixing a wet signature, now the process has turned digital, thanks to digital signatures.


It is important to know that digital signatures are different from wet signatures that are scanned and pasted on contract documents. It is called a digital signature because of the digital certificate embedded in it. In certain ways, it has a positive impact on the future of contract signing. What are the impacts? Check out the explanation below!


Increased efficiency in the contract signing process


In a contract document, ideally there are at least two parties who will give their signatures as proof of legal agreement. When done manually, the process of obtaining these signatures can be quite time consuming. Of course, the more parties that have to sign, the longer the process will be. Not to mention if the parties are in different companies or cities, it will take more time for the contract documents to be signed because you have to send them via post.


This is where a digital signature can change the future of contracts. Because it uses a digital signature, the contract documents are digital. This means you don't need to manually send contracts, as they can be done much faster via email. Once received, the related parties can immediately review the contract, sign it digitally, and then send it to the next party. Distance is no longer an obstacle to finalizing a contract.


Changes in the concept of “legality”


Legality is one of the most important elements in a contract. Each party involved must agree to the legality of the contract by affixing his or her signature. Nowadays, digital signatures also have the same validity in the eyes of the law - meaning that a digitally signed contract document fully legally validates what is contained within the document.


In Indonesia, the validity of digital signatures is regulated under Article 11 Paragraph (1) of Law Number 11 of 2008 concerning Electronic Information and Transactions. The use of digital signatures has legal force as long as it meets a number of requirements as stated in the law, namely:

  1. Digital Signature creation data relates only to the Signatory.

  2. Only the Signatory has authority over Digital Signature creation data during the digital signing process.

  3. Any changes to the Digital Signature that occur after the signing time are detectable.

  4. Any changes to Digital Information related to the Digital Signature after the signing time are detectable.

  5. There is a clear method used to identify who the Signatories are.

  6. There is a clear method to show that the Signatory has given consent to the related Digital Information.

Contract documents are safer and more protected


When compared to digital documents, physical documents tend to be more susceptible to the risk of being lost, whether they are stolen or misplaced. Not to mention the risk of damage to paper due to floods, fire, or other calamities. You can avoid these risks by using digital contract documents that are digitally signed. After a contract is signed by all related parties, you can immediately save it digitally and access it from anywhere, at any time.

In addition, the risk of contract forgery or abuse can also be minimized. As mentioned earlier, digital signatures have digital certificates in them. The digital certificate acts as an encryption.


When a digital signature is affixed to a digital contract, the digital certificate will record the signature along with all important data listed, such as the identity of the signatory and the time of signing. The digital certificate also records any changes that occur in the digital contract. So if an outside party tries to sabotage the contract, you can easily track it down.

The switch from a wet signature to a digital signature has a positive impact on the contract-signing process. Apart from having full legality in the eyes of the law, digital signatures can also improve the efficiency of the signing process and the security of contract documents. Especially if you use a digital signature that is equipped with biometric authentication in the form of face recognition such as VIDA Sign. That way, the integrity of the contract signature will be maintained.










Baca juga: Manfaat yang Bisnis Anda Dapatkan Jika Tidak Lagi Memakai Kertas

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