Electronic signatures have been a legally recognized method of signing documents in the United States since 2000, thanks to a series of legislative measures aimed at bringing the convenience of the digital world in line with traditional paper-based transactions. This legal foundation is primarily rooted in two landmark laws: the Electronic Signatures in Global and National Commerce Act (ESIGN Act) and the Uniform Electronic Transactions Act (UETA).
Consent and Comprehension: Keys to Validity
Just as with traditional handwritten signatures, electronic signatures are only legally valid if all parties involved intend to sign, indicating a clear understanding of what they are agreeing to. This makes consent crucial. Each party must agree to engage in an electronic transaction, and this consent depends on the context of their interactions.
Additional protections are in place for consumer transactions. The law requires that consumers:
Receive a disclosure known as the UETA Consumer Consent Disclosures.
Explicitly agree to use electronic records for any given transaction.
Retain the right to withdraw their consent to conduct business electronically at any time.
Keeping Records: Associating Signatures with Documents
For an electronic signature to be valid, the document's signing system must keep a detailed record of its creation process. This can be achieved through a visual or textual statement attached to the document confirming the use of an electronic signature.
Under U.S. law, these records must be preserved accurately, ensuring they can be referenced or inspected by any party with a legal right to the information.
Limitations: When Electronic Signatures Are Not Enough
Despite the broad legality of electronic signatures under the ESIGN Act and UETA, certain documents still require a traditional ink signature:
Wills and testamentary documents
Certain family law documents, including those related to adoption and divorce
Documents governed by the Uniform Commercial Code (UCC)
Court records and documents
In these cases, physical signatures remain the legal standard.
The State Landscape: Where Electronic Signatures Are Valid
To date, 47 states have embraced the UETA as their framework for handling electronic signatures. However, three states—Illinois, New York, and Washington—opted for their own versions:
Illinois: Electronic Commerce Security Act
New York: Electronic Signatures and Records Act
Washington: Washington Electronic Authentication Act
Can I Use RedlineDCS in the United States?
Yes, RedlineDCS fully complies with U.S. regulations and offers legally binding electronic signatures under the ESIGN Act and UETA. It provides businesses with a secure, efficient, and widely accepted method for managing digital transactions, supporting the evolving needs of a digital-first economy.
Written by Ryan Langston, Customer Success Manager
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