Often, I get asked about electronics signatures and the requirements of keeping paper documents. I am writing this clear clear up many questions. While I live and work in Minnesota, but the UETA standard has been adopted by almost all states with the exception of
Good question! Hey, what do you expect, I asked it.
An electronic signature is any legally recognized electronic means that indicates that a person adopts the contents of an electronic message. The U.S. Code defines an electronic signature as "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. It may be an electronic transmission of the document which contains the signature, as in the case of facsimile transmissions, or it may be encoded message, such as telegraphy using Morse code. Increasingly, encrypted digital signatures are used in e commerce and in regulatory filings as digital signatures are more secure than a simple generic electronic signature.
A digital signature or digital signature scheme is a mathematical scheme for demonstrating the authenticity of a digital message or document. A valid digital signature gives a recipient reason to believe that the message was originated by a known sender, and that it was not altered in transit. Digital signatures are commonly used for software distribution, financial transactions, and in other cases where it is important to detect forgery and tampering.
Properly implemented digital signatures are more difficult to forge than the handwritten signatures!
There are 3 main points to the Uniform Electronic Transaction Act.
A record or signature may not be denied legal effect or enforceability solely because it is in electronic formIf a law requires a writing, an electronic record satisfies the law
If a law requires a signature, an electronic signature satisfies the law
The first important principle of UETA is that a record or signature cannot be denied legal effect solely because it is in electronic form.
The world of business is moving away from paper to electronic media. It is incumbent on the law to acknowledge and provide for this, otherwise the law becomes a hindrance instead of a tool for economic development.
Thus, from this first principle naturally evolves the second principle of UETA: if a law requires a writing, an electronic record satisfies the law.
In addition, if a law requires a signature, an electronic signature satisfies the law.
It is important to keep in mind what the statute does not do. It does not give legal validity to electronic records if they would not have validity if they were paper records. The barriers that are removed from electronic commerce does not alter the outcome of the dispute-whether the parties use electronic or paper media, the dispute is subject to the same legal principles.
One must look to the underlying law to determine whether the record would have validity. UETA merely provides that just because a record is electronic, it cannot be invalid for that reason alone- but to have legal validity the record would have to have such under the existing law if the record were a paper record.
It is also important to note that UETA very specifically does not mandate any specific electronic technologies- it simply allows for electronic transactions using any type of technology the parties choose.
On June 30th, 2000, the ESIGN Act was signed into Federal Law and thereby established the validity of electronic signatures for interstate and international commerce.
Retention of contracts and records
Section 101(d) of ESIGN provides that if a law requires that a business retain a record of a transaction, the business satisfies the requirement by retaining an electronic record, as long as the record "accurately reflects" the substance of the contract and is "accessible" to people who are entitled to access it "in a form that is capable of being accurately reproduced for later reference, whether by transmission, printing or otherwise."
The most FAQ that arises out of the thought of an electronic signature is, “Will this document hold up in a court of law?” The answer is - yes.
There are applications out there that can adhere to laws and make paper signatures a thing of the past.
Business process automation can further the benefits of electronic signatures by automating workflows that can route the signed document to the appropriate party, who then can archive the document in a repository within a matter of seconds. Another helpful incentive of combining automation with electronic signature verification is the ability to automatically start a process as soon as the document is signed and completed. There is no waiting for a CSR or company rep to enter in information manually, which saves both time and money.
Keeping compliant with the law is an important aspect of many businesses. With an electronic signature system in place, a business can show that they have adhered to laws, just as they would with paper documents.
Lets put a logical system in place and ditch all those boxes that take up valuable space and much time to find specific documents in. Now, replace it with a solid digital workflow process that won't break the bank.
You know who to call...
