With the march towards an increasingly digital world, more and more companies are beginning to adopt the use of e-signatures. Traditionally, a signature included not just the writing of one’s name, but the making of any mark or symbol with the intention to adopt or accept a written agreement.
Congress passed the Electronic Signatures in Global and National Commerce Act (E-Sign Act) in order to ensure the enforceability of electronically signed contracts. The E-Sign Act defines an electronic signature as “a sound, symbol, or process…attached to or logically associated with an electronic record…made with the intent to sign the electronic record.” Therefore, under the E-Sign Act, the attachment of a digital image of one’s signature, the typing of one’s name at the end of an electronic agreement, or even clicking “I Accept” at the end of said agreement constitutes an electronic signature.
Although under the E-Sign Act a contract cannot be denied legal effect just because an electronic signature was used, the E-Sign Act also provides exceptions for certain types of agreements where electronic signatures cannot be used. First, the E-Sign Act does not require a party to agree to use or accept an electronic signature, so a party can require a handwritten signature as a condition of acceptance.
Moreover, the E-Sign Act excepts several kinds of contracts and documents from its application, including:
– Documents related to the creation and execution of wills, codicils, and trusts
– Documents related to adoption, divorce, and other family law matters
– Documents governed by the Uniform Commercial Code (except those covered by the articles governing sales and leases of goods)
– Court orders or notices, or official court documents (such as briefs and pleadings)
– Cancellation or termination notices for utility services, health insurance, or life insurance
– Notices of default, acceleration, repossession, foreclosure, or eviction, or the right to cure, under a mortgage or rental agreement for a primary residence
– Documents required to accompany the transportation or handling of hazardous or toxic materials
Finally, the E-Sign Act permits electronic retention of contracts and documents, as long as the electronic record “accurately reflects the information” in the contract and the record can be later accessed and accurately reproduced.