With more and more business being conducted online, there is a growing need for the regulation and enforcement of electronic legal contracts.  Electronic signatures and scanned or faxed documents are rapidly replacing the traditional signed hard forms and files.  The days of the paper contract are drawing to a close.

Electronic Contracts and Their Legality

The validity of electronic contracts have been questioned in courts for years, and the US courts are repeatedly finding that electronic contracts satisfy the legal written requirements and are sufficient to enforce under the Statute of Frauds.  As most of us who file our taxes electronically are aware, electronic signatures are now considered legal signatures, and website security merits serious consideration and skepticism.

Common Legal Issues Do Arise

The most common issue individuals run into when conducting standard business agreements is determining what actually constitutes a personal signature.  The answer is not yet specific enough to clearly define.  However, digital signatures are considered satisfactory under the electronic contract law if and only if they represent intent to be bound by the corresponding legal contract, and have some security feature to prove the signer was the correct individual.  The physical signature is less critical than the intent it represents, but security and authenticity do remain in question.

Legislation of Federal E-SIGN

In an attempt to standardize state law, the Federal US government has initiated the E-SIGN Legislation.  This body of law encourages each state to conform to the Uniform Electronic Transactions Act, known as UETA, and to promote electronic commerce by formalizing electronic contract law.  Without this necessary legislation, state level governments will be unable to protect businessmen who operate over the Internet, falling behind the current push that the economy needs.

Legal Help is Available

As with most legislation, even with the documents in hand, it can be difficult for individuals without a legal background to properly interpret electronic contract law.  There are however, attorneys with extensive experience in electronic commerce who can simplify the laws and explain how it affects individual liabilities and rights in each specific case.  Just as with a written contract, it is essential that all parties involved understand the agreement they are entering into before signing.  For this reason, an experienced attorney is incredibly valuable in planning and explaining the contracting process.

As the legislation falls into place, electronic contracts will become standard, opening the door to immense business networking opportunities as well as lending flexibility to individuals working as private contractors and consultants.

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