Can a promissory note be signed electronically?

Yes. In the United States, a promissory note signed electronically has the same legal effect as one signed in ink. Two laws establish this. The federal Electronic Signatures in Global and National Commerce Act, known as ESIGN, took effect in 2000. The Uniform Electronic Transactions Act, UETA, is a model state law adopted by 49 states, the District of Columbia and the territories. New York has its own statute, the Electronic Signatures and Records Act, to the same effect.

Both laws say the same thing in substance: a signature, contract or record may not be denied legal effect solely because it is in electronic form. They define an electronic signature broadly, as an electronic sound, symbol or process attached to or logically associated with a record and executed by a person with the intent to sign it.

For a signature to hold up, four elements have to be present.

• Intent to sign. The person meant the act to be a signature. Typing a name into a field labelled as a signature, after reading the document, is intent. An automatic email footer is not.
• Consent to do business electronically. The parties agreed to use electronic records and signatures. A clear statement shown at signing, which the signer accepts, satisfies this.
• Attribution. The signature can be tied to the person: through their authenticated account, their email, the device and network used, or the surrounding circumstances.
• A retained record. The signed document and the evidence of how it was signed are kept in a form that can be reproduced accurately later, by every party.

A signature is only as useful as the proof around it. If the borrower later says they never signed, or signed a different version, the lender needs to show exactly who signed what, and when. A signing record should capture, at the moment of signing:

• The signer’s identity. The account they were signed in to, the email it is tied to, and the role they signed in, lender or borrower.
• The signature itself. The name as typed or drawn, and the act that submitted it.
• The consent text. The exact words the signer was shown and accepted about signing electronically and about what they were signing.
• The time. A timestamp from the server, not the signer’s device, in a stated time zone.
• The network and device. The IP address and the browser identification. These do not prove identity on their own, but they corroborate it.
• A hash of the exact document. A cryptographic fingerprint of the file as it existed when signed. Any later change to the file, even a single character, produces a different hash. This is what proves the version.

A signing certificate that lists these facts, attached to the executed note, turns an argument about memory into a comparison of records.

A paper promissory note can be a negotiable instrument. Whoever holds the original, properly endorsed, can enforce it. That is why banks that buy loans insist on the original note: possession is proof of ownership.

An electronic file has no original in that sense. Copies are identical. ESIGN section 201 and UETA section 16 address this with the idea of a transferable record: an electronic note held in a system that can reliably identify a single authoritative copy and the person who controls it. A note that meets that standard can be transferred and enforced like a paper original.

For most private loans this does not matter. The lender and borrower are the only parties, nobody intends to sell the note, and the lender enforces it as a contract, which an electronic signature fully supports. It matters when the lender plans to assign the note to a bank or an investor who will want to be a holder in due course. A lender in that position should ask the buyer what form of note they will accept before signing anything.

The note itself does not need to be notarized to be valid. A notary confirms who signed, which is useful evidence, but the law does not require it for a promise to pay.

The exception is anything that has to be recorded in public land records. A deed of trust or mortgage that secures the note with real property must usually be signed before a notary, because the county recorder will not accept it otherwise. The same often applies to a release of the lien when the loan is paid off. ESIGN and UETA leave these recording requirements to the states.

Many states now permit remote online notarization, in which the signer appears before the notary by video and the document is notarized electronically. Where it is available, a secured loan can be completed without anyone meeting in person. Where it is not, the security instrument is signed on paper at a notary or a title company, while the note can still be signed electronically.

Wills, certain trusts, and court documents are also carved out of the electronic signature laws in most states. They do not affect an ordinary loan.

ESIGN requires that an electronic record be retained in a form that accurately reflects the information in it and remains accessible to everyone entitled to it, for as long as the law requires the record to be kept. For a loan, that is at least the life of the loan plus the limitation period for suing on it, which runs to a decade in some states.

A workable approach:

• Keep the executed PDF, the signing certificate, and the hash together.
• Give both parties their own access to the same file, so neither depends on the other to produce it.
• Download a copy to your own storage as well. A record held only on a service you might stop using is a risk.
• Never edit the executed file. An amendment is a new document, signed by both parties, that refers to the original.

To check a stored copy later, compute its hash and compare it with the hash recorded at signing. A match proves the file is the one that was signed.

NoteHouse drafts the note from the loan terms as a PDF and sends it to each party. Each party reads it, accepts the consent statement, and signs by typing their name. At that moment the system records the signer’s account and role, the typed name, the server time, the IP address and browser, the consent text, and the SHA-256 hash of the PDF bytes being signed.

When both have signed, the note is executed and a certificate page listing those facts is generated alongside it. Both parties can open and download the executed note and the certificate from the loan for as long as the loan exists, and the stored file can be re-hashed at any time and compared with the recorded hash.

The controls around the record are described in plain terms on the security page. For the sequence from draft to signed note, see how it works.