The E-SIGN Act (Electronic Signature in Global and National Commerce Act) is a federal law created by Congress to “facilitate the use of electronic records and signatures in interstate or foreign commerce”. It was enacted in 2000 after the UETA (Uniform Electronic Transactions Act) was created in 1999. The UETA has been adopted in whole or part by 48 states. UETA provides that both parties must have agreed to conduct the transaction electronically in order for the law to apply, though the agreement may be implied rather than explicit. For an electronic document to be valid, it must be in a form that may be retained and accurately reproduced. UETA further provides that if state law requires a document to be notarized, the e-signature of a notary is acceptable. The E-SIGN act requires that “no contract, record or signature may be denied legal effect solely because it is in electronic form”. If a state has enacted the uniform or full version of UETA, then state law prevails. If a state enacted a modified version of UETA, then E-SIGN overrides any modifications to UETA that are inconsistent with E-SIGN.
The Statute of Frauds requires that contracts for sales of more than $500 and leases for more than $1,000 must be in writing. The E-SIGN act provides that e-contracts and e-signatures meet the requirement of writing, so the Statute of Frauds applies to electronic contracts as well as written ones.
A digital signature is described as “an electronic sound, symbol or process attached to or associated with a record and executed or adopted by a person with the intent to sign the record”. There are two types of digital signatures – one is a digitalized handwritten signature in which a person can use something like an ePad and a software program to write their signature so they can attach it electronically to documents. The other type is a public-key infrastructure-based digital signature. The signed has a private key to use to put their signature on a document, and the recipient has a public key to verify the identity of the signor.
By providing that a contract, record or signature cannot be denied legal effect solely because it is in electronic form, E-SIGN provides legal effect to an electronic signature.
Sojourn 