Business Department

Signed into law in 2000, the Act gives legal validity to certain contracts, signatures, and consumer contracts-saving money
and time for many

On June 30, 2000, President Clinton became the first president to sign a bill into law using a computer. The legislation he signed that day was the Electronic Signatures in Global and National Commerce Act (E-SIGN), which passed by overwhelming majorities in both the House and the Senate.

The Act has exciting implications. "Just imagine if this had existed 224 years ago," Clinton remarked. "The Founding Fathers wouldn't have had to come all the way to Philadelphia for the Declaration of Independence. They could have emailed their 'John Hancocks' in."

The Electronic Signatures Act in Practice
The new law became effective October 1, 2000. The Act gives legal validity to signatures, contracts, and other records to a consumer transaction in their electronic form, including notarizations and insurance documents. When the law requires a consumer to receive written documentation of a transaction, this Act makes it possible for the documentation to be in electronic form, however the consumer first must give his or her consent after disclosure of the specifics involved. Furthermore, businesses legally required to maintain certain records may now keep them in electronic form.

Although the Act enables documents to be signed electronically, the option to do so remains solely with the consumer. No portion of the Act requires you to sign documents electronically – you retain the right to use traditional "paper and ink" at your discretion.

The Act also specifically avoids stipulating any officially "approved" form of electronic signature, instead leaving the method open to interpretation by the marketplace. Currently acceptable methods include simply pressing an "I Accept" button, digital certificates, smart cards, and biometrics.

The intent of the new act is to increase company and consumer confidence in transacting business over the Internet. By eliminating the need for paper transactions and the associated costs, such as paper and postage, the Electronic Signatures Act is expected to save millions of dollars. Obviously, this measure benefits the environment as well. However, some critics warn that these benefits come with the increased potential for forgery and fraud.

Exceptions to the Act
At present, the Act does not apply to certain estate planning documents such as wills, family law documents including divorce and adoption, or official court documents. Also not covered are notices of lease termination, cancellation of insurance benefits, and recalls. However, the feasibility of incorporating these exceptions and more will be studied in the coming years. The possibilities may be endless.

MacElree Harvey
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