Are e-signatures legal, admissible, and enforceable in the United States?
In the United States, there are two acts designed to validate electronic signatures: ESIGN and UETA. Both acts define an electronic signature as “any electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.”
- Federal Electronic Signatures in Global and National Commerce Act (ESIGN) can be accessed here.
- There is a uniform state law, the Uniform Electronic Transactions Act (UETA), which can be accessed here. UETA governs electronic signatures at the state level and is in effect with slight variations in 49 states. New York has an electronic signature act similar in most respects to UETA.
The key requirements for an electronic signature to be recognized as valid under U.S. law include:
- Intent to sign: As with handwritten signatures, electronic signatures are valid only if each party intended to sign.
- Consent to do business electronically: The parties to the transaction must consent to do business electronically.
- Association of signature with the record: In order to qualify as an e-signature under ESIGN and UETA, the system used to capture the transaction must keep an associated record.
- Record retention: U.S. laws on e-signatures require that electronic signature records be capable of retention and accurate reproduction for reference by all parties or persons entitled to retain the contract or record.
In Barwick v. GEICO 1, the Arkansas Supreme Court held that an electronic signature on an electronically generated record met the requirement of the Arkansas insurance statute requirement that a rejection of no-fault coverage must be "in writing".
In Newton v. American Debt Services, Inc.2 the federal court in California, citing ESIGN, found that the plaintiff was bound by a contract executed using an electronic signature. The court went on to refuse to enforce the arbitration clause on the grounds of unconscionability.
Are there certain documents that cannot be e-signed in the United States?
ESIGN and UETA's recognition of the validity of electronic signatures does not apply to the following types of documents:
- wills, codicils, and testamentary trusts;
- adoption, divorce, and family law documents;
- court orders, notices, and official court documents;
- cancelation/termination of life or health insurance benefits;
- product recalls; and
- transportation of hazardous materials;
Each state may also add additional documents where an electronic signature would not be recognized.
Does local regulation govern the use of digital IDs and/or certificates for e-signatures in the United States?
Local laws do not govern use of digital certificates.
“Qualified Electronic Signatures” are not required. Both ESIGN and UETA are technology-neutral in their approach to the validity of electronic signatures.
*DISCLAIMER: The information contained in this guide is for information purposes only, provided as is as of the date of publication and should not be relied upon as legal advice or to determine how the law applies to your business or organization. It is recommended that you seek guidance from your legal counsel with regard to law applying specifically to your business or organization and how to ensure compliance. OneSpan does not accept liability for the contents of these materials or for third parties materials.
Last updated: November 2020