Whether you are looking to transact with businesses or customers in the US, or are just looking to learn more about the law surrounding e-signatures there, this article is for you. This article aims to summarize everything you need to know about the legality of e-signatures in the US.
In the US, the use of e-signatures is governed by the Electronic Signatures in Global and National Commerce (“ESIGN“) Act and the Uniform Electronic Transactions Act (“UETA“). This article aims to highlight the key provisions of both Acts, and the differences between them.
The Electronic Signatures in Global and National Commerce (“ESIGN“) Act is the US Federal law governing the use of electronic records and elecronic signatures in the US. Under the ESIGN Act, electronic records and signatures are legally valid. In other words, in every US State and US territory where federal law applies, electronic records and signatures have the same legal effect as traditional contracts and signatures.
See also “Top 5 Types of Documents Signed with Electronic Signatures”
Key points of the ESIGN Act:
Exceptions where electronic signatures are not applicable
The following is a list of documents where the use of electronic signatures is not appropriate.
The UETA is a model Electronic Transactions Act drafted by the Uniform Law Commision of US. This Act, where adopted, constitutes State laws. It should be noted that the provisions in the ESIGN Act take precedence over the UETA, because the ESIGN Act constitutes Federal law.
UETA has since been adopted by 48 states, the Disrupt of Columbia, Puerto Rico and the US Virgin Islands. However, two states, Illinois and New York, have not adopted the UETA . Instead, Illinois and New York have implemented their own state laws governing esignatures.
Key provision of UETA:
Exceptions where electronic signatures are not applicable
See above
In the US, the ESIGN Act and UETA were put in place to govern the application of eSignatures. Both share the common purpose of making transactions simpler and quicker.
ESIGN | UETA |
Federal Act – Takes precedence over State law like the UETA, and resolves conflicts between eSignature Laws in different states. | Recommended State Act – UETA is an optional Act which states can choose to adopt on a state-by-state basis. |
Applies in every US State. | Adopted and applies in 47 states, excluding Illinois and New York. |
Both laws focus on establishing eSignatures as legally binding, and equivalent to paper signatures. |
Requirement | Features of Sign.net |
Intent to Sign | When signing a document using Sign.net, signers must explicitly click on a signature field in order to sign. |
Consent to do business electronically | When creating an account via Sign.net, all users consent to do business with Sign.net electronically. |
Opt-out clause | Sign.net allows the signer to not continue with the document signing flow, should they wish to proceed with signing it manually. |
Signed copies | After a document is completed, all Sign.net users are issued a fully executed copy of the agreement. |
Record retention | Sign.net retains copies of all fully executed agreements on its cloud system, which is accessible by its executors. |
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