Almost everything written about signing documents in India blurs two words that the law keeps carefully apart, and the blur is expensive. It leaves people believing either that a signature drawn on a screen carries the weight the statute gives a certificate, or that a contract signed that way is worthless. Neither is true.
Here is what the Information Technology Act, 2000 actually does, and what it leaves to ordinary contract law.
Two different things share one word
The Act names two mechanisms, and they are not variations on a theme.
A digital signature, under section 3, is cryptographic. A private key produces a mathematically checkable seal, and the key belongs to a certificate issued by a Certifying Authority licensed under the Act. That is what a DSC token in a drawer is.
An electronic signature, under section 3A, is broader by design and narrower in practice. Section 2(ta) defines it as authentication of an electronic record by a technique specified in the Second Schedule, and section 3A gives such a technique the same standing as a digital signature. The Second Schedule is a list the Central Government adds to by notification. Aadhaar eSign was added by notification in January 2015; PAN-based eSign followed.
A drawn signature is not on that list
This is the sentence most articles will not say plainly. Drawing your name with a mouse or a fingertip, or typing it into a box, is not a technique specified in the Second Schedule. It is therefore not an "electronic signature" in the sense the IT Act uses the term, however good the audit trail around it is.
That is a statement about a statutory definition. It is not a statement that the contract is void, and the difference is the whole point of this page.
The contract is still a contract
Section 10A says that where a proposal, an acceptance, or their revocation is expressed in electronic form, the resulting contract shall not be deemed unenforceable solely on the ground that electronic means were used. What makes it binding is what has always made a contract binding: offer, acceptance, consideration and the rest of the Indian Contract Act, 1872.
The record of the signing is admissible too. Section 65B of the Indian Evidence Act, 1872 treats information in an electronic record as a document, subject to its certificate requirements.
So an ordinary commercial agreement, signed by a drawn mark with a proper record around it, is a contract. What you do not get is the statutory shortcut. With a section 3 or section 3A signature, the Act does the work of tying the mark to the person. Without one, you prove assent the ordinary way: who received the link, when they opened it, what they agreed to, what they signed, and what the document said at the moment they signed it.
That is why the record matters more here than it does in a country whose statute accepts the mark itself.
The contrast that decides which market a tool is built for
The United States takes the opposite approach. Under the federal ESIGN Act and the state-level UETA, an electronic signature is any electronic sound, symbol or process attached to a record and executed with intent to sign. A drawn or typed mark qualifies on its face. There is no schedule of approved techniques to be notified into. The US position is worked through in is an electronic signature legally binding in the US.
The same product is therefore a different proposition in the two places. In the US the mark plus the record is the signature. In India the mark plus the record is evidence, and the signature the statute recognises comes from a licensed Certifying Authority or from a notified technique such as Aadhaar eSign.
What cannot be signed electronically at all
The First Schedule lists documents the Act does not apply to. In practice that means these are not signed this way:
- Negotiable instruments other than a cheque, unless it is a demand promissory note or a bill of exchange issued in favour of, or endorsed by, an entity regulated by the Reserve Bank of India, the National Housing Bank, SEBI, IRDAI or PFRDA
- Powers of attorney, unless they empower such an entity to act for the person giving them
- Trust deeds
- Wills and other testamentary dispositions
If a document is on that list, no amount of audit trail helps. Use paper, or the instrument's own required form.
Property contracts came off that list in 2022
Contracts for the sale or conveyance of immovable property used to be the fifth entry above. They are not any more. Notification S.O. 4720(E), dated 26 September 2022 and published in the Gazette on 6 October 2022, omitted that entry and narrowed the two entries above it in the same stroke. The IT Act no longer stands in the way of an e-signed agreement to sell.
That is not the same thing as a sale deed you can register electronically. Registration and stamp duty are governed by the Registration Act, 1908 and by state stamp law, neither of which the notification touched, and many sub-registrars still ask for paper. The useful way to hold it: the IT Act is no longer the obstacle, and registration and stamping are.
What this means if you are choosing a tool
Three questions worth asking any signing product, in this order.
- Does it produce a section 3 or 3A signature, or an electronic record of assent? Most products, including this one, produce the second. Vendors are not always clear about which, and "legally valid in India" is a claim that can be made about both.
- If it is the second, what is in the record? Who signed, the address the private link was sent to, when they signed, where from, their explicit agreement to sign electronically captured before they could fill anything in, and a hash of the document as it was sent. That is what you would rely on.
- Does anything need a DSC? Statutory filings frequently do. That is a licensed provider's job for that one document, whatever you use for everything else.
Where RunwayDue stands, plainly
RunwayDue produces an electronic signature with a full audit trail. It is not a certificate-based digital signature from a licensed Certifying Authority, and it is not an Aadhaar eSign. Before you send a document, e-signature lists the First Schedule exclusions, because the time to find out is before it goes rather than after somebody relies on it.
For ordinary commercial agreements between businesses that is generally what is needed, and it is what most signing products sold in India actually are. For anything requiring a DSC, use a licensed provider for that document.