What is an electronic signature?
According to the U.S. Federal Law, called the E-SIGN Act, and electronic signature is an “electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.”
The E-SIGN Act:
Passed by congress in 2000, the E-SIGN Act provides a federal standard for all states to follow regarding electronically produced signatures on contracts. The Act established the rule that electronic signatures are as legal as hand-written pen and paper signatures. This was the first federal law that confirmed contracts may not be deemed illegal or unenforceable because it was signed electronically.
The legality and enforceability of contracts signed by electronic signature was quickly becoming an issue during the late 1990s, as online transactions were becoming the norm. Companies were accepting online transaction agreements without a definitive law to back up those contracts. The E-SIGN Act provides a safeguard for businesses and ensures smooth interstate and international ecommerce.
As early as 1993, individual states were adopting their own rules and definitions for electronic signatures in an attempt to accommodate the growing number of ecommerce transactions and international internet commerce. The E-SIGN Act allows for electronically signed agreements made before 2000 to be grandfathered in, but after the Act was signed, all agreements must follow the E-SIGN Act guidelines.
The E-SIGN Act set forth guidelines to provide a foundation for all 50 states to base their ecommerce laws. It established that those guidelines may be modified or limited by states only if the state provides protection for electronic signatures, equivalent to the protection provided by the E-SIGN act. Most states have done this by adopting the Uniform Electronic Transactions Act (UETA).
The UETA was approved in 1999 by the National Conference of Commissioners on Uniform State Laws. It is a framework for states to build their own laws on electronic signatures. Washington, Illinois, and New York are the only states that have not adopted the UETA as a standard. Those states have outlined similar guidelines that satisfy the E-SIGN Act’s requirement of offering the same level of protection to signers as the UETA.
Electronic signature laws have also been adopted internationally. Learn about electronic signature law in places such as:
- The European Union
- The U.K.
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