e-Signature Laws

The growth and development of personal computers and Internet usage have helped to drive the passing of the Electronic Signatures in Global and National Commerce Act (ESIGN). On October 1, 2000, the e-Signature Laws were enacted in the U.S., giving businesses and individuals more freedom in e-commerce transactions. The e-Signature Laws advocate for the validity and enforceability of electronic signatures, contracts and records that are performed electronically as in the case of ink-on-paper signatures. However, some exceptions to the laws include court documents, residential evictions and foreclosures, cancellation notices for health and life insurance policies and utilities contracts and documents governed by the UCC.

Electronic signatures are used instead of written signatures to sign documents, allowing companies to conduct transactions electronically. This guarantees that the identities of the persons signing and creating the document, file or emails are legitimate. According to the e-Signature Laws, an electronic signature may be a symbol, process or sound that is attached to a record or logically associated with it. You may also include a digital certificate with the signature in order to validate it.

Using e-signature is legally binding and it offers benefits, including:

•saving money on ink, paper and postage
•reducing the handling time to receive, sign and return documents
•improving the ease, accuracy and security in getting signatures
•providing all the parties involved with copies of the documents immediately.

However, because of the ease and speed in performing the process, the person signing may not read the document in its entirety.

Despite the lack of confidence in online commerce by some people, there has been a remarkable increase in the popularity and use of electronic signatures since the e-Signature Laws have been established. Some of the major users of this technology include government agencies, financial institutions and technology and consumer services companies.