Electronic signature: what makes one valid, and what to keep

What counts as an electronic signature?

The E-SIGN Act defines it as an electronic sound, symbol or process, attached to or logically associated with a contract or other record, and executed or adopted by a person with the intent to sign the record (15 U.S.C. 7006(5)). A typed name, a drawn signature on a screen and a ticked box can all qualify. What matters is that it is tied to the record and made with intent to sign.

Is it as valid as ink?

Under E-SIGN, a signature, contract or other record relating to a transaction may not be denied legal effect, validity or enforceability solely because it is in electronic form (15 U.S.C. 7001(a)). The Uniform Electronic Transactions Act, adopted by most states, says the same in its section 7: a record or signature may not be denied legal effect or enforceability solely because it is in electronic form. Neither law changes the substantive law of contracts. A document that would not be binding on paper is not made binding by signing it electronically.

What has to happen before a consumer signs?

E-SIGN adds conditions when a law requires information to be given to a consumer in writing. Before electronic records can replace paper, the consumer must receive a clear and conspicuous statement of:

• the right to have the record on paper, and the right to withdraw consent, with any conditions, consequences or fees of withdrawing
• whether the consent applies to one transaction or to a category of records
• how to withdraw consent and how to update contact information
• the hardware and software needed to access and retain the records
• how to get a paper copy after consenting, and whether there is a fee

The consumer then consents, or confirms consent, electronically in a manner that reasonably demonstrates that they can access the information in the electronic form that will be used (15 U.S.C. 7001(c)(1)). If the requirements change in a way that creates a material risk the consumer can no longer access or keep the records, the provider has to restate them and the right to withdraw (7001(c)(1)(D)).

How do you show who signed?

UETA's section 9 says an electronic record or signature is attributable to a person if it was the act of the person, and that the act may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable. The legal effect of an attributed signature is then decided from the context and surrounding circumstances at the time, including the parties' agreement.

In practice that is the record kept beside the signature. A link alone can be forwarded, so the evidence usually includes:

• the copy of the document that was signed, unchanged since it was sent
• how the signer's identity was checked, for example a code sent to their email address and entered before signing
• the signer's name, the time, the IP address and device
• the consent text they agreed to, including consent to sign electronically
• a log of each step: sent, viewed, verified, signed

What record has to be kept?

Where a law requires a contract or record to be retained, E-SIGN is satisfied by an electronic record that accurately reflects the information and remains accessible to everyone entitled to it, for as long as the law requires, in a form that can be accurately reproduced (15 U.S.C. 7001(d)). A signed PDF with its audit record can meet that description if it stays accessible and can be reproduced for as long as the law requires.

General information, not legal advice.