Are electronic signatures legal? In a word: Yes. But like most things in business, life and law, there are limitations. So let’s take a quick look at Public Law 106-229, break it down into plain English, and answer the question: are electronic signatures legally binding?
Public Law 106-229: Electronic Signature in Global and National Commerce Act
On June 30, 2000, as one of his parting acts as President, with the approval of the 106th Congress, President Clinton signed the Electronic Signature in Global and National Commerce Act into law. It’s stated purpose was to “facilitate the use of electronic records and signatures in interstate or foreign commerce.”
The Main Point of The Electronic Signature in Global and National Commerce Act: E-Signatures Are Legal
A bill wouldn’t be a bill if it wasn’t wordy, and the Electronic Signature in Global and National Commerce Act is no exception. Weighing in at 14 pages, the gist of the bill is this:
“[sic] a signature contract, or other record relating to such transaction, may not be denied legal effect, validity or enforceability solely because it’s in electronic form.”
Electronic Signatures and Consumer Protection Standards
The Electronic Signature in Global and National Commerce Act does include various consumer protection provisions. Essentially, the Act makes it illegal to ignore the wishes of consumers who, “prior to consenting, is provided with a clear and conspicuous statement,” and opted-out of accepting electronic signatures.
In other words, if you’re an affiliate marketer, and your terms include language that allows users to send in a written consent as opposed to an electronic, and you in some way deny them rights associated with said opt-out, then you may be held liable for any claims that arise out of the situation.
The Uniform Electronic Transactions Act (UETA)
The National Conference of Commissioners of Uniform State Laws (NCCUSL) is a non-profit association that has been around since 1892. They basically work to establish uniform administrative standards for state law commissioners. Adopted by 47 states, Washington, D.C., Puerto Rico and the United States Virgin Islands, the NCCUSL is one of those little heard from groups that have a significant effect on law making.
One of the NCCUSL statues is the Uniform Electronic Transactions Act – or UETA. It’s another law on the books that makes electronic signatures legal. The Act outlines a standardized set of rules for how state laws legally structure their check-record–keeping and electronic signature laws.
Illinois, New York and Washington State have not adopted the UETA, but all three states do have state laws that render electronic signatures legal.
The bottom line: electronic signatures are legal. But if you have wording in your terms or policies that give consumers an electronic-signature opt-out, and you ignore their wishes, you could find yourself on the losing end of an electronic signature lawsuit. So, it’s best to have an attorney look over your policies – especially if you found it for free online – to ensure that you’re not inadvertently ignoring electronic signature opt-outs you didn’t know appeared in your disclosure statement.