A method and apparatus for encoding a purpose into a digital signature, where purpose and digital signature bound into an extended digital signature. The extended digital signature capability binds a purpose description identifying the purpose for the digital signature so that when affixed to a digital signature, the digital signature cannot be employed for improper purposes. A hash function is used to generate a hash value from the purpose description. The hash value is used in a digital signature function to bind the purpose to a digital signature. The extended digital signature can be verified for validity by comparing it to a hash value. In an electronic transaction, the extended digital signature can allow a purpose to be bound with the digital signature so that improper or unauthorized transactions are detected and disallowed.