What are stamped signatures?
A stamped signature is a document that is signed using a rubber stamp with the signature of the individual on it. Rubber stamps are used by some entities to replace traditional signatures on checks, invoices, and other documents. This use of a stamp in lieu of a handwritten signature is permitted by the UCC. A stamp is acceptable for use because it gives the same "assurance" as a handwritten signature, and more impractical to require a handwritten signature "for every contract, check or other obligatory document."
The state of Georgia provides that a stamped signature is just as acceptable as a handwritten signature in the most commonly used statutes governing contracts. Georgia Code Section 14-6A-20 states , "Any signature, acknowledgment, proof, certificate, endorsement, voucher, evidence of debt or other writing in the form and of the tenor following shall have the same force and effect, and shall be treated as authentic, as if written, signed or executed in the usual manner by the person whose name appears therein (a) when the signature thereon is impressed by means of a plate, die, roll, stencil or other mechanical device." Georgia Code Section 5-6-35 states, "An offer of proof that the signature on any instrument was impressed thereon by means of a plate, die, roll, stencil or other mechanical device shall be sufficient to establish a prima facie case that such signature is authentic."
Jurisdictional status
The legal status of stamped signatures is not consistent across jurisdictions. In many countries, stamping a signature is not an acceptable means of authenticating a document, while in others it is. For instance, in the United States, the laws pertaining to stamped signatures can vary widely from state to state; there are no clear federal regulations specifically addressing this issue. In some states, stamped signatures are acceptable on certain types of documents but not others, whereas other states strictly prohibit their use on any official document.
In contrast, the European Union has a more unified legal approach to this issue. According to the Electronic Communications Act of 2000, the use of stamps and seals counts as a form of electronic signature but only if it can be verified that the stamp or seal is unique to the holder.
In jurisdictions such as Japan, the law is very definitive: stamped signatures are prohibited altogether. There are few exceptions to this rule, including personal stamps.
In most cases, however, the use of a stamped signature may be considered a form of forgery if not authorized by the person whose name appears on the document being signed.
Applying stamped signatures
Legally, a stamped signature is generally formed if a person places their signature impression onto a stamp, and the stamp is then placed on a document. Although automated processes have replaced stamps in many business scenarios, stamped signatures are still widely accepted. The following are some of the most common scenarios where stamped signatures are used: Financial Institutions. In order to manage the large volume of approvals, confirmations, and authorizations, some banks, financial service firms and investment firms use stamp pads with authorized stamped signatures as a matter of internal efficiency. Such financial institutions are generally able to show that the use of stamped signatures is convenient, and that safeguards are in place which adequately address the risk of signature falsification. Governmental Bodies. Many courts and governmental bodies permit the use of stamps in administrative matters and procedural processes, (e.g., processing court documents). Certain Industries. Many industries use stamps to process orders or fulfill other contractual obligations, which include the sale or purchase of products or real property. Again, adherence to appropriate safeguards which guard against forgery or misuse of a signature stamp are critical. There are a number of other situations and industries in which stamped signatures are also frequently used.
Comparisons between stamped and digital signatures
When contemplating whether or not to use a stamp, it is useful to compare it with the electronic alternative, digital signatures. Digital signatures are files generated as part of the encryption process that contain the names of the parties to the document, the name of the program used and an encrypted signature. Digital signatures are typically done by computer program. There are no penmanship issues and, assuming the program used is secure, there is a high degree of confidence in the signatures’ authenticity. But as of today’s writing, the system is not too widespread will many people having electronic signature software and trained sales staff. This aside, electronic signatures have been accepted as valid and enforceable under the Uniform Electronic Transactions Act ("UETA) of all 50 states. So a business can be assured that electronically signed documents will be treated as legal documents under the law. Just as stamped signatures can be made more secure when combining what we call "wet" signatures that are hand written or signed (like you sign a credit card slip) and then stamping the signature over top (the wet signature gets stored electronically) simultaneously the stamp has been created, so too electronic signatures can have signature stamps, but these electronic stamps are generally more secure, and certainly easier to preserve, than paper stamps. (Also, electronic stamps never smudge.)
Potential legal issues and concerns
As noted in the previous section, stamped signatures may be accompanied by the actual names of their author. However, that does not solve a very significant problem relating to their authenticity: how does one prove that a company employee actually signed a given document, as opposed to someone having done so on their behalf? And furthermore, how does one counter an allegation made by a disgruntled employee that his/her signature was stamped by another? Although these types of issues may be relatively rare, that does not mean that companies are completely insulated from them. It is due to this possibility that parties considering making use of stamped signatures are advised to be very cautious – particularly because setting aside a contract on the grounds of fraud , coercion or some other illegality does not always equate to such a contract being set aside due to a breach of contract.
What is more, the enforceability of a printed rather than written signature can potentially give rise to even more problems, particularly if the other contracting party later tries to claim it was unaware of the fact that it was not a written signature. In other words, if a party signed or agreed to something with a printed signature, the other party can subsequently argue that that party was not bound by the terms of the document in question.
Validating stamped signatures
It is imperative that a document signed by a stamping officer invariably contains an imprint of the official stamp on it. Mere stamping by the stamping officer is not sufficient and an imprint of the stamp is a must. The Supreme Court in M/s. Essar Oil Ltd. v. UOI (2010 3 JT 23), in which similar issue with regard to stamping officer’s initials and the sealing of the judicial file was involved, held: "Only stamping by an officer does not satisfy the requirement of Sections 54/55 of the Indian Stamp Act. There must be an imprint of the seal, though not necessarily with ink, in order to attract the provisions of Section 54 of the Act. It is obvious that just stamping by hand of the officer concerned is no stamping, as in most of the cases there is no impression of the encouragement for indulgence. We find ourselves in agreement with the view taken in United India Insurance Co. Ltd. v. Chinta Sreeranga Rao, AIR 2000 AP 407. Hamburger & Cons. Nat. Bank v. State of Andhra Pradesh (FB), 1969 Cur. L. J. 555." In Society of Audit & Accountancy Overseers of the Government of Tripura v. Tripura State Higher Education Services Commission 2016 (2) TCR 167, the Tripura High Court held that unless the documents had been duly stamped by the stamping officer concerned, the presumption under Section 35 of the Act cannot be drawn. If the intention of the legislature was to dispense with stamping by the stamping officer, and the requirement of assessment by the Collector under the section, then there was no meaning in incorporation of Section 31 of the Act. The court observed that the requirement of stamping under the Act was prior to assessment and collection of stamp duty. But, granting exemption from also stamping by stamping officer reopens an avenue for evasion of stamp duty. Further, the court observed that stamping before assessment was a factor, which ensures regularity, whereas permitting assessment and collection may entail heartburns and litigation. In this background, the court held that the exemption from stamping before assessment in the case of certain contractual instruments was valid and justified. In Chintan Mansion Apartment Owners’ Association v. State of Maharashtra (2016) 4 BomCR 493, the Bombay High Court held that exemption from stamping all documents for acquisition of land in rural area could not be construed to include exemption from obtaining necessary stamping by the stamping authority. In the absence of such an exemption, such stamping by the stamping authority was a pre-condition, a statutory requirement for assuming presumption in favour of sufficient stamping.
Future developments in signature solutions
Despite their shortcomings, stamped signatures have been a fixture of corporate life for far too long. A stamped signature is simply too easy to impersonate or reproduce, and security risks associated with this traditional form of endorsement could be greatly reduced through the implementation of more modern forms of signatures. The future of signature technology hinges on the resolution of a number of complex issues of law, privacy, technology, and society. As discussed throughout this article, the legal framework surrounding the validity, enforceability, and admissibility of electronically-stamped documents is rudimentary and inadequate. However, recent advancements of crypto-signatures, biometric technology, and blockchain notary services are effectively transforming the landscape for securing our most important documents with universal standards that are beginning to be applied to an ever-growing list of industries. Indeed, in April 2020, Belgian Health Minister Frank Vandenbroeck announced a paper-based solution for securing remote doctor-patient communications by providing patients with a crypto-signature public key on their health card that can be generated and updated at any pharmacy whenever a new prescription is written for that patient. This is a small step away from traditional stamped signatures , but it is one way for government agencies to transform their processes in order to stay ahead of fraud. Based on the scale of this endeavor, developing solutions that address the regulatory and commercial aspects of crypto-signatures will continue to revolutionize the industry for years to come. Digital signatures will replace stamped signatures, however, traditional stamped signatures are here to stay until there are sufficient legal, procedural, and institutional assurances established to provide universal standards. There is a long list of paper-based, object-based, person-based and social-based governance frameworks required to drive the transition to digital signatures and blockchain since most transactions involve some interactions, and to standardize processes across governments and industries. This transition is inevitable, however, obstacles including lack of public knowledge, understanding and general skepticism will need to be addressed in the coming years before we see widespread adoption. That said, emerging blockchain technology and legal standards will increase the interest of corporations, banks and insurance companies seeking to comply with strict chains of custody requirements that are often a burden to businesses, and eventually see digital signatures as a new digital asset that can be transacted and acted upon much like cryptocurrencies today.