• Electronic signatures are as valid as paper signatures for most documents.keyboard image by Jan Will from Fotolia.com
  
  In June 2000, President Clinton established the validity of electronic signatures for use in commerce throughout the country and internationally by using his electronic signature ID to sign into law the "Electronic Signatures in Global and National Commerce Act" (ESIGN). The primary purpose of ESIGN was to insure that a commercial transaction would not be invalidated simply because a signature was in electronic form. ESIGN requirements supersede all other electronic signature requirements made by any state, regulatory agency or organization.
  
  

Technology Neutral

• One of the important aspects of ESIGN is that the requirements for electronic signatures are technology neutral. ESIGN defines "electronic signature" as any manner of "electronic sound, symbol, or process" associated with a "contract or other record and executed or adopted by a person with the intent to sign the record." The law leaves it to the parties to the transaction to determine which electronic signature technology works best for them. For example, retail transactions are particularly amenable to using a pen pad device connected to a computer that can be signed by a consumer at the point of purchase. This technology is unlikely to be usable for a business in New York sending a contract to Texas, which would probably require a technology relying on an Internet connection.
  
  

Basic Requirements

• ESIGN's basic requirements for a valid electronic signature involve a two-step process. The first concerns the preservation of the right to not use the electronic recording of a signature and to rely on a paper record of the transaction. In other words, the circumstances of the transaction must indicate that the use of an electronic signature was done knowingly and voluntarily. Furthermore, in transactions where written disclosures to a consumer are required by law, ESIGN requires that the disclosure also affirmatively indicate that the consumer consented to using the electronic process. The second ESIGN requirement is that the actual capture of the electronic signature be in a form that can be recorded for subsequent inspection and authentication, if necessary.
  
  

ESIGN Exclusions

• Not every legal document is suitable for signing electronically. ESIGN specifically states that its provisions do not apply to several types of documents, such as wills and testamentary trusts; divorce and other family law matters; court orders and other documents required in connection with court proceedings; any notices pertaining to termination of utility services, eviction or foreclosure, or termination of health or life insurance benefits; and documents relating to public safety risks (e.g., product recalls and transporting hazardous material).