Federal Internet Law & Policy
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E-Signatures Dont be a FOOL; The Law is Not DIY
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On June 30, 2000, President Clinton signed into law the Electronic Signatures in Global and National Commerce Act (ESIGN) . . . with a regular ink pen.

The traditional law of signatures and contracts creates a problem: many documents and signatures must be "in writing." An uncertainty concerning the legitimacy of electronic documents and signatures poses a barrier to eCommerce. The solution is an Electronic Signatures Act.

Many individuals would anticipate that a discussion of electronic signatures would involved a discussion of cryptography; it doesn't. Not only does the ESIGN Act not require encryption, it barely requires anything. As little as an online sneeze could theoretically constitute an electronic signature (of course you might be able to repudiate the signature with some good cold medicine). ESIGN defines an electronic signatures 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.

[ESIGN Sec. 106(5).] ESIGN did something very limited and modest, with tremendous ramifications. Electronic and written are now equivalent. A document "may not be denied legal effect, validity, or enforceability solely because it is in electronic form." [ESIGN Sec. 101]


(a) IN GENERAL- Notwithstanding any statute, regulation, or other rule of law (other than this title and title II), with respect to any transaction in or affecting interstate or foreign commerce--

(1) a signature, contract, or other record relating to such transaction may not be denied legal effect, validity, or enforceability solely because it is in electronic form; and

(2) a contract relating to such transaction may not be denied legal effect, validity, or enforceability solely because an electronic signature or electronic record was used in its formation.

ESIGN established the legal equivalence between

Certain documents were excluded from ESIGN coverage, including

ESIGN also does not affect proximity requirements for notices.

Note that where there was no obligation for writing in the first place, then ESIGN is not relevant.

Scope: ESIGN covers

ESIGN covers transactions between private parties. It does not cover purely governmental transactions (for example the census. But see the Government Paperwork Elimination Act, requiring government use of electronic medium). When the government engages in commercial transactions, ESIGN does apply.

ESIGN is voluntary. The Act does not establish that parties are obliged to use electronic form. All parties must agree to electronic form. According to the Office of Management and Budget, "electronic records may be substituted for paper versions only if the consumer affirmatively consents to receive the documents in electronic form ..."

For example, when walking up to the cash register at your favorite chain store, and confronted with one of those electronic signature gizmos that does who-knows-what-and-where with your signature, unless you the consumer consents to the use of electronic signatures, you are under no obligation to use the electronic gizmo. The store must provided good old paper to sign.

To take advantage of electronic signatures, an entity must provide the consumer with a clear and conspicuous statement of a right to a paper record, what happens if consent to use electronic records is later withdrawn, and information concerning the technology for access to and retention of e-records. Note that entities are perfectly free to offer discounts to persons who take advantage of ESIGN and, conversely, to charge extra for those who prefer paper over electronic.

Government: Sec 104(b) of ESIGN gives federal agencies the ability to set standards for "integrity, accuracy, and accessibility of electronic records and the authentication of electronic signatures." Agencies can, for example, set standards for authentication methods used in government procurement contracts. Whatever an agency does, it must be consistent with ESIGN (no covertly undoing ESIGN through bureaucratic red tape).

Contact: Additional information concerning legal issues can be obtained from the Department of Justice at; information concerning the legislative history of E-SIGN may be obtained from the Department of Commerce at

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