The ESIGN Act and UETA Compliance
Traditional signatures will soon become outdated as digital transformation reshapes our world. Electronic signatures are simpler and easier to use, plus they are legally binding. In the US, eSignatures are fully legal as long as all signees and parties involved agree to use them. Moreover, a document or contract can’t be denied as evidence in a court case just because it’s electronic.
Did you know that the validity of an electronic signature was first dealt with in 1867 by US courts which recognized the validity of a signature transmitted via telegraph?
History of US eSignature Laws
During the late 1990s, online transactions started to become a norm in the US, emerging the need to make eSignatures legally binding. It took about five years, and in 1999, the National Conference of Commissioners introduced the Uniform Electronic Transactions Act (UETA). The UETA only acquires authority through the enactment of state legislators. Therefore, its legitimacy depends on the States.
After that, the US Congress adopted the Electronic Signatures in Global and National Commerce Act (ESIGN) in 2000. This milestone recognized the significance of electronic transactions and updated many commerce-related regulations.
Thus, together with the UETA, they help to ensure the legitimate use of electronic records and eSignature documents for commercial activities.
Similarities Between the ESIGN Act and UETA
Firstly, ESIGN Act covers contracts within foreign and interstate commerce. UETA precisely includes only digital contracts related to business, commercial, and governmental matters. However, ESIGN and UETA have lots in common and complement each other in many ways. For instance, for both laws, no e-contract, signature, or record can be denied legal impact just because an electronic signature software was used during the process of transacting.
ESIGN and UETA Key Requirements Which Make eSignatures Valid in the US:
- The signer has to express a clear intention to eSign the document;
- You and your partners have to consent to do business electronically;
- Association of signature with a record (It can be any record that displays the process of signing or the history of changes in the document);
- The eSignature software has to provide all signers with copies of the document.
Differences Between the ESIGN Act and UETA
The first difference is that ESIGN is a federal law, effective in the entire country. On the other hand, UETA is a state law with jurisdiction in 47 US states, Puerto Rico, the Virgin Islands, and the District of Columbia.
Also, ESIGN Act has priority in disputes over UETA.
In addition, other key differences are few clauses that appear in the ESIGN Act, but not in UETA. These include:
- Oral communications aren’t considered e-records for the purpose of eSignatures
- It expressly limits the regulatory authority
- Transferable records are limited
- Default rules are omitted
Finally, some of the procedural provisions in UETA that are not mentioned in the ESIGN Act are:
- Attribution of records
- The time of sending or receiving messages
- Mistakes in contract documents
- E-records aren’t admissible as documents
Our electronic signature software complies with the requirements established by the United States laws, UETA Act and the ESIGN Act. Invite your clients for signing with DigiSigner now.
To sign up for your electronic signature free trial click HERE.