The United States Code on electronic signature law states that an electronic signature constitutes a legally binding signature, by which an individual is agreeing to the contract and terms as stated in the corresponding electronic document.  As the laws governing electronic commerce are new and highly unregulated, businessmen will find it useful to educate them as to how the legislation does and does not protect their daily work.

What exactly is an Electronic Signature?

This is defined as an electronic symbol, sound or process that is attached to or is associated logically with a certain contract or other type of record and is adopted or executed by a person that has the intent to use it in a legal agreement as being a physical or superior signature. In fact, the “signature” does not have to be a signed name, but can be a code or sound, indicating that the intent of the individual is highly independent of the manner in which that intent is expressed.

E-Signature Enforcement

Technically, all electronic signatures are binding legally and can be enforced under the Electronic Signatures Act, the electronic signature policy is one that protects a contract from being denied legality on the sole basis that it takes an electronic form.  Supporting documentation, for example email correspondences negotiating the contract, are often used to clarify the totality in which both parties agree to be bound by the specific terms of the document.  This allows business transactions to be completed online rather than in person, promoting the efficiency of electronic commerce at a time when the economy is failing and owning or working with a small business can be risky.

The Law and the Electronic Signature Act

The federal government is working to impose some level of uniformity among state laws over electronic signatures, smoothing the way for interstate electronic commerce.  The (UETA) Uniform Electronic Transactions Act  has been adopted by 47 states, with only Washington, New York, and Illinois yet to conform to the federal regulations.  The UETA explains that the context and totality of circumstance under which the agreement was made make an electronic contract and signature equally binding and as enforceable as any other written contract.  It is important to note that the UETA does not validate the use of electronic signatures on checks or financial investments, leaving much of the security of electronic funds transfer to private banking institutions.

Legal Aid

Individuals with no legal background are advised to seek help from a trusted attorney when preparing to negotiate or enter into an electronic contract.  Professional assistance will clarify your rights under electronic contract law, and the liabilities incurred by each party will be explained.  This sort of preparation will protect you from time-consuming and expensive legal problems in the future.

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