E-Sign Act requirements and what you should know.

Learn about the E-Sign Act and how it has simplified doing business electronically — without pen and paper.

For the most part, the way of doing business and handling important documents has gone digital, thanks to the Electronic Signatures in Global and National Commerce (E-Sign) Act.

Have you ever wondered about the rules behind this digital shift? That’s where the E-Sign Act requirements, making electronic transactions work effortlessly in the United States, come in.

What is the E-Sign Act?

Electronic signatures might not feel as “official” as physical documents signed with a pen, but as of 2000, that’s no longer the case.

Congress passed the E-Sign Act to approve the validity and enforceability of electronic signatures. That means if you sign a document with an electronic signature — even official government documents — your signature is legal and binding. You can enter contracts, sign up for services, and approve forms, all with the click of a button.

When did Congress pass the E-Sign Act?

The Electronic Signatures in Global and National Commerce (E-Sign) Act was passed by the US Congress on June 30, 2000. This legislation aimed to modernize the use of electronic signatures and records in business and consumer transactions in the United States and internationally. The act created a legal framework for electronic signatures and records, giving them the same legal standing as traditional, on-paper signatures.

E-Sign Act requirements and exceptions.

The E-Sign Act comes with certain requirements and exceptions. Here’s a breakdown.

Requirements:

• Consumers must give explicit consent to conduct electronic transactions.
• Businesses must provide clear and conspicuous notice regarding consumers’ right to receive paper copies of electronic records, as well as the process for withdrawing consent.
• Electronic records must be retained in a format that accurately reproduces the original information and complies with retention periods mandated by other laws.
• Businesses must ensure consumers have the necessary tools to access electronic records or offer paper copies if needed.

Exceptions:

• The E-Sign Act does not cover all document types, excluding some, like wills and certain family law documents.
• Consumers have the right to withdraw consent and receive paper copies as long as this doesn’t disrupt the contract.
• Specific disclosures can be provided electronically, enabling streamlined communication in various sectors, such as finance and lending.
• Some states have their own electronic signature laws, which take precedence in case of conflicts with federal law. Comprehending these requirements and exceptions is essential for businesses seeking to utilize electronic signatures while adhering to the law’s boundaries and ensuring consumer rights are upheld.

How to stay in compliance with the E-Sign Act.

Just because the US Government accepts electronic signatures doesn’t mean every e-signature is valid. When it comes to handling E-Sign Act compliance, knowing the proper procedure to make sure an electronic signature is legally binding is key to ensuring adherence to regulations and best practices. Compliance under the E-Sign Act requires that signatures meet the following conditions:

• Consent to do business electronically. All parties must agree to conduct transactions electronically, either explicitly or implied.
• Intent to sign. E-signatures are only valid if the signer intended to sign. Signature requests need to be declinable.
• Association of signature with the record. Signers must make a visible mark or statement on the e-document.
• Attribution. Whether a name or a unique mark, the signature must be attributable to the person signing and only linked to them.
• Record retention. Signed electronic documents must be saved, viewed, or printed by either party and stored for future reference.

What’s the difference between the E-Sign Act and UETA?

The E-Sign Act and UETA are two sets of rules that deal with electronic signatures and records in the US, but they have differences. The E-Sign Act is a federal law that applies consistently in all 50 states, making it the same everywhere you go. It also takes precedence over any conflicting state laws for transactions that cross state lines. On the other hand, UETA is a bit more flexible because it’s a model law that states can adopt and adapt. While 47 states have embraced it, the variations in how states implement it can lead to differences in how electronic signatures are handled.

Another thing to note is that both laws require consumers to give their consent for electronic transactions. However, the E-Sign Act lays out specific procedures and requirements for this consent, while UETA allows a bit more leeway.

Use E-Sign Act compliance tools.

Because forged signatures are a serious issue, e-signatures need to follow these strict regulations to maintain the highest levels of security. If you want to use an electronic signature, make sure you use software that meets all E-Sign Act requirements like Adobe Acrobat.

Discover more about how you can make it easy to legally and securely sign electronic documents with the click of a button.