Electronic signatures are legally binding as per federal law. There are two Acts that establish the legality of electronic signatures in the United States – the Electronic Signatures in Global and National Commerce Act (ESIGN, 2000) and the Uniform Electronic Transactions Act (UETA, 1999). Both ESIGN and UETA establish that electronic records and signatures carry the same weight and legal effect as traditional paper documents and handwritten signatures stating: A document or signature cannot be denied legal effect or enforceability solely because it is in electronic form. You can read a much more detailed description of electronic signatures and their legality at:
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​http://en.wikipedia.org/wiki/Electronic_signature
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Online contracts and paper contracts are much the same. Just like you cannot prove somebody signed a paper contract outside of your presence, you have the same potential issue with online contracts. However, that does not make them less valid.

Contracts are written to convey intent and outline the parties responsibilities. What makes contracts valid legally is when you can prove intent. So any communication surrounding a contract helps back that up. If you get a contract signed and have NO further records of communicating with that person, then it is harder to prove that intent. However, if (and this is the case for almost all 17hats clients) you have communication around it as well as any payments, you should be covered. It is also extremely rare that a person will say they didn't sign a contract; it typically involves a breach of the contract (and you can only claim a breach if you have signed it).

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