History of Electronic Signature Law

What is the history of electronic signature law?

electronic signature law - gavel

With the growing use of electronic signatures in the 1980s and 1990s, electronic signature law became an important legislative concern for businesses and governments throughout the U.S. and other developed countries. For the first time, companies could sign a contract, fax it and digitally send it to another company hundreds or thousands of miles away. However, this process caused many questions as to the validity of the contracts.

Consequently, courtrooms throughout the U.S. moved quickly to determine that electronic signatures were just as valid as if two parties were in the same room and verbally agreed to a deal. Therefore, the use of faxes and electronic signatures flourished and became common practice in many businesses.

By the mid-1990s, dozens of states had adopted electronic signature laws. On June 30, 2000, President Bill Clinton signed the Electronic Signatures in Global and National Commerce Act (E-SIGN), which established validity and lawfulness of electronic signatures for interstate and international commerce.

Why was the E-SIGN Act so essential for electronic signature law in the U.S.?

The E-SIGN Act is the premier federal law ensuring the legality of documents executed with electronic signatures in the U.S. This important electronic signature law, which was actually digitally signed into law by President Clinton, states that contracts with electronic signatures may not be denied legal effect or ruled unenforceable because they were created digitally. It also helps avoid states having different electronic signature laws, which might have slowed commerce and cost businesses money.

What are some of the other electronic signature laws in effect throughout the world?

There are quite a few. The main electronic signature laws in effect throughout the world include the following:

  • Personal Information Protection and Electronic Documents Act (Canada)
    • Known as PIPEDA, Canada’s electronic signature law specifies how business must handle consumer data to ensure privacy and security
  • European Directive 1999/93/EC (European Union)
    • As mandated in July 2001, the European Directive governs electronic signature law for every member nation in the European Union.
  • Electronic Communications Act 2000 (United Kingdom)
    • This electronic signature law is similar in structure to the EU Directive. It promotes the legal validity of eSignatures for residents of England, Scotland and Wales.
  • Electronic Transactions Act 1999 (Australia)
    • Australia’s electronic signature law defines a regulatory framework for electronic transactions and also contains important information stating that no transaction will be invalidated because it was completed electronically.

Are there any exceptions to the E-SIGN Act?

Yes, although the E-SIGN Act is quite comprehensive, certain records and documents are not covered under the Act, including:

  • Wills, codicils and trusts
  • Adoption paperwork
  • Divorce decrees
  • Court orders and notices
  • Notices of default, foreclosure, repossession or eviction
  • And more

Find out about electronic signatures and biometric authentication.