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Why e-signatures aren’t enough: the real risk of misunderstood agreements

Written by Chris Fortune | Jul 14, 2025 2:03:37 PM

E-signatures have become the default for digital agreements. They're quick, convenient, and legally binding. But while they solve the problem of speed and paperwork, they don't solve a much bigger issue: whether the person signing actually understood what they were agreeing to.

In regulated sectors like law and financial services, this matters more than ever. Compliance requirements are shifting from disclosure to demonstrable understanding. And that’s where traditional e-signature tools fall short.

In this post, we’ll explore:

  • Why e-signatures fail in some crucial contexts

  • Real-world risks of relying on a signature alone

  • What regulators are expecting

  • Why platforms like i agree are offering a better alternative

 

The appeal of e-signatures (and their limits)

There’s no doubt that tools like DocuSign, Adobe Sign, and HelloSign have made contract signing faster and more scalable. In a typical flow:

  1. A contract is sent to a recipient

  2. The user scrolls or skips to the signature field

  3. They sign electronically — often in a few clicks

It’s efficient. But it doesn’t confirm whether the person:

  • Read the document

  • Understood the key terms

  • Knew what their rights and obligations were

It only shows that they clicked ‘sign’.

In some cases that might be enough. But there are a lot of cases where it definitely isn't

 

Why e-signatures fail: a gap in proof, not legality

Let’s be clear: e-signatures are legally valid in most jurisdictions, including under UK law and the eIDAS Regulation. That’s not the problem.

The issue is that in many regulated or sensitive environments, a signature alone doesn’t prove comprehension.

Think of situations where:

  • A vulnerable client signs a financial product they didn’t fully understand

  • A customer disputes terms and says they felt misled

  • A law firm is required to prove fair treatment under Consumer Duty

In all these cases, simply showing a signature isn't enough. What’s needed is evidence of informed consent.

 

Real-world consequences of misunderstood agreements

The risk of misunderstanding isn’t just theoretical. It can lead to:

  • Regulatory breaches: The FCA, SRA, and other bodies are increasingly focused on fairness and understanding, not just disclosure

  • Customer complaints and disputes: Many legal and financial complaints stem from clients claiming they didn’t realise what they agreed to

  • Reputational damage: Signing clients up to terms they don’t grasp isn’t just risky — it undermines trust

  • Legal uncertainty: Courts have started to look at the fairness and clarity of agreements, not just the presence of a signature

One high-profile example is the case of Belsner v Cam, which raised serious questions about whether clients truly understood legal fees, even though they had signed.

 

What regulators now expect

Across sectors, there’s a growing trend: regulators want proof that clients were treated fairly and that businesses took reasonable steps to ensure understanding.

For example:

  • The FCA’s Consumer Duty expects firms to ensure “good outcomes” for retail clients, including comprehension of products and services

  • The SRA Codes of Conduct require that solicitors explain issues in a way clients can understand

  • GDPR and other data laws require that consent is “informed, specific, and freely given”

In all these cases, a simple e-signature doesn’t tick the box anymore.

 

The alternative: a consent-first approach

That’s where i agree comes in. Instead of relying on signatures, it focuses on understanding, intent, and fairness.

Here’s how it works:

  • Contracts are broken into clear, digestible sections

  • Each section is summarised in plain English

  • A short video with a voiceover presents the summary

  • Clients confirm understanding by repeating the key terms

  • The entire journey is recorded in a tamper-proof audit trail

The result? A clear record not just of agreement but of informed consent.

 

When to consider an alternative to e-signatures

You may not need this level of clarity for every contract. But if you’re in a regulated, high-risk, or client-facing environment, it’s worth asking:

  • Would a regulator accept this signature as proof the client understood?

  • Could this agreement be challenged or misunderstood later?

  • Are my clients vulnerable, at risk, or likely to need extra support?

  • Do I want to reduce the likelihood of complaints or disputes?

If the answer is yes to any of the above, it’s time to look beyond the signature.

 

What makes i agree different?

Unlike traditional e-sign tools, i-agree.io doesn’t treat signing as the end goal. It’s built for firms that want to:

  • Prove understanding, not just obtain a mark

  • Serve vulnerable or diverse clients with clarity

  • Meet regulatory expectations under the FCA, SRA, GDPR, and more

  • Improve client experience by making legal terms accessible

See how we compare with DocuSign and other signature platforms.

 

Final thoughts: clarity is the new compliance

The world is moving on from the idea that a signature means someone truly agreed. In a post-Consumer Duty world, firms need to go further — to ensure that people understand, not just accept.

Traditional e-signature tools won’t get you there. But a consent-first approach can.

To learn more about how it works, visit our FAQ or explore how i agree works.

i agree is built for clarity, fairness, and trust — because informed consent should be more than a checkbox.