Do Your Electronic Signatures Hold Water?

When you use an esign, it performs significant legal functions. E-signatures form a huge part of your electronic records and procedures. They are not marks or badges that make your documents look formal. They are legally accepted badges that are enforceable and carry the same sort of responsibility that handwritten signatures do. When an electronic signature is attached to a document, it makes the document legal and binding. It shows that the parties involved in the transaction are responsible for the changes done in the document.

This technology is very important for businesses that have online payment systems. E-commerce sites get so many benefits if they use an e-signature system. However, as either a business owner or a consumer, how do you know that your signature is legitimate and legally binding?

There are laws governing the use and the regulation of e-signature systems. These regulations have been laid down by the Uniform Electronic Transactions Act or the UETA and the Electronic Signatures in Global and National Commerce Act or ESIGN. Most states have adopted these laws. They have changed the way electronic transactions are completed by making them more secure but still very convenient.

Both laws were created so that electronic signatures would have a specific legal structure to follow. It allows signatures in electronic form to have the same value as traditional, handwritten ones. The UETA and the ESIGN acts give the use of electronic signature software a procedural approach. Both of these regulations state that documents signed with an electronic signature cannot be voided exclusively because it is in electronic form. A document that used an electronic record in its creation also cannot be voided under the law. This means that if a document is signed with an electronic signature, it cannot be denied legality because it was electronically generated. If a contract was drawn with the use of both electronic documents and traditional paper documents, it is still considered legally binding.

Note that an esign does not only have to consist of letters or scribbles. Under the UETA and ESIGN acts, a document is considered electronically signed if it comes with an electronic sound or symbol. This is also the case if it went through an electronic process that expresses the signer's intent to indicate his agreement with the document. That means that an electronic signature can be a badge or a cryptographically embedded symbol or an electronically printed name that was authorized by the party involved in the document.

The signature used in the document must be attached or associated to the document being signed. It has to be captured with electronic signature software that keeps an associated record of the process used to capture the signature. The software has to make a statement or report of the signature added to the record. The program used to generate the signature acts as its guarantor and should have a system (using serial numbers, timestamps, etc.) that can track down where the signature was captured and whose account it is associated with. Your electronic signature may be invalidated if the software you use does not follow these standards.

Businesses that use an e-signature system find that they are able to make their processes more efficient. However, they must make sure that they are using reliable software for their electronic signature management.

Alfred Siliano is a business owner who frequently uses electronic signature software. For more information, go to DocuSign.com today.

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

Understanding the Law - E-SIGN Compliant Electronic Signatures

On June 30, 2000, Congress enacted the Electronic Signatures in Global and National Commerce Act ("ESIGN" or "the Act"), to facilitate the use of electronic records and signatures in interstate and foreign commerce by ensuring the validity and legal effect of contracts entered into electronically. Yet many do not understand how their business can be compliant with the E-SIGN Act.

First we need to understand that E-SIGN (additional E-SIGN analysis here) [http://privasign.com/laws-esign.asp], in section 101(b) does not require people to use electronic signatures. When electronic signatures are used then Sub-section (c), in direct support of (b), requires a “Consumer Disclosure” that the consumer also "consent electronically, in a manner that reasonably demonstrates that the consumer can access information in the electronic form that will be used to provide the information that is the subject of the consent".

As we can clearly see, the law outlines a two step process to signing files electronically. First, disclosure of the consumer’s right to use paper, which is followed by their consent to the electronic process. The second phase is the actual capture of the electronic signature.

Once the signature is captured the law directs its attention to the electronic record that has now been created. This aspect of the law, while often overlooked, provides the true power and cost savings of electronic signatures – the ability to STORE electronic files. Printing and storing a paper copy of the electronic record defeats the achievements of this law. It is the accessibility and cheap storage costs of electronic files that really amount to long term cost savings. Sub-section (d) details the retention of contracts and records. If a “statute, regulation, or other rule of law requires” the file to be retained then “that requirement is met by retaining an electronic record”.

Accuracy and availability are discussed in both (d.1.B) and (e). The record must be available to all parties involved; this is easily accomplished by allowing each signatory to save an electronic copy of the record on their own computer. The electronic record and signature created must be in a format that is both accurate and accessible. Meaning that the technology to read, display and transfer the record is of a generally acceptable form. This aspect of the law requires businesses to choose electronic signature services that provide them with flexibility.

PrivaSign provides a multi-step approach to “Consumer Disclosure”, by providing multiple disclosure messages to the signatory. Acknowledgement of this disclosure is captured as proof that the consumer was informed, and did accept to use an electronic process.

PrivaSign's "electronic records" are compliant with both sub-section (d) and (e). PrivaSign stores all files for a minimum of 3 months. Additional storage maybe purchased or at anytime during the 3 months both sender and recipient may download the file so that they may be in compliance with any applicable laws. This downloaded file can be saved to their computer, saved to a portable medium (CD, DVD or others) or even printed to paper. PrivaSign captures file integrity hashes so that all parties can verify the integrity of saved files.

PrivaSign allows any file type to be electronically signed. This increases the availability of the electronic record as described in (d.1B) and (e) and gives each business the ability to select the best electronic format for their clients.

By: Isaac Bowman

Isaac Bowman is Vice President of the Electronic and Digital Signatures International Standards Commission and an IT business consultant. He graduated form UT of Dallas with a major in Information Systems. Isaac Bowman has published over 50 articles on electronic signatures and completed the largest online resource for electronic signature laws and regulations.

ibowman-articles@privasign.com

http://www.isaacbowman.com

Additional Law References [https://privasign.com/laws.asp]

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.