Companies today routinely use e-signatures to streamline and speed commercial transactions. However, we still sometimes get a question as to whether electronic signatures are binding in the United States and Globally. The following information is provided from U.S Government websites as well as our Smyyth companies corporate e-signature partner, DocuSign, the leader in the electronic signature field.
Just as emails replaced “snail” mail, E-signatures have accelerated and driven out the hassle of getting commercial transactions completed, in our case Credit Application Automation provided by our affiliate, Credit2B LLC, to an extent that going back to the old way of doing business would be unthinkable. Please contact us if you would like more information.
The Electronic Signatures in Global and National Commerce Act (E-Sign Act) and The Electronic Signatures in Global and National Commerce Act (E-Sign Act signed into law on June 30, 2000, provides a general rule of validity for electronic records and signatures for transactions in or affecting interstate or foreign commerce. There are four basic parts required in order for an electronic signature to be recognized.
- The parties have to intend to sign, just as with any written contract.
- The parties must agree to do business electronically. For businesses, this can be shown by the circumstances of the interaction. In the case of consumers, however, they must affirmatively consent to use of electronic records, and received related consent disclosures.
- The e-signature system must capture and keep the record that reflects the process by which the “signature” was created, or generate a graphical or textual statement proving it was executed.
- The United States Laws require that the e-signature records be capable of retention and reproduction by the parties.
The E-SIGN Act and its precursor, UETA, solidified the use of electronic records and electronic signatures in commerce by confirming that electronic records and signatures carry the same weight and have the same legal effect as traditional paper documents and wet ink signatures. Both laws provide the following:
- No contract, signature, or record shall be denied legal effect solely because it is in electronic form.
- A contract relating to a transaction cannot be denied legal effect solely because an electronic signature or record was used in its formation.
Note: We do not provide legal advice, and we always recommend you consult with your counsel if you have any concerns. Also, many countries have specified certain types of documents or that are not appropriate for e-signatures including wills and trusts, powers of attorney, and declarations under oath.