Are You Afraid to Embrace the Electronic Contract Movement?

As technology continues to evolve, standard paper and ink contracts are becoming less common. Contracts are frequently exchanged over email, and many businesses conduct a bulk of their business with consumers over the Internet.

If your business has not yet embraced the online contract movement, you may be concerned about legality of electronic signatures.

The good news is that the electronic signatures used to execute these contracts are generally valid. In fact, under the Electronic Signatures in Global and International Commerce Act (ESGICA), e-signatures are just as legal as their paper and ink counterparts.

 

Types of E-Signatures

There are a few types of electronic signatures that companies may encounter, depending on the nature of their business. All of the contracts described below are valid and enforceable, so long as the other requirements for a legally binding contract are met.

  • Typing the signer’s name into the signature area
  • Pasting in a scanned version of the signer’s signature
  • Clicking an “I Accept” button
  • Using cryptographic “scrambling” technology

 

Exceptions to the E-Signature Law

Finally, there are still a few types of contracts that must be on paper to be valid and enforceable, although many of these do not frequently arise in the business context.

  • Wills, codicils, and testamentary trusts
  • Documents relating to adoption, divorce, and other family law matters
  • Court orders, notices, and other court documents such as pleadings or motions
  • Notices of cancellation or termination of utility services
  • Notices of default, repossession, foreclosure, or eviction
  • Notices of cancellation or termination of health or life insurance benefits
  • Product recall notices affecting health or safety, and
  • Documents required by law to accompany the transportation of hazardous materials.

 

The e-signature law offers businesses with the opportunity to save money and streamline their processes without worrying about the enforceability of their contracts. In fact, experts predict that they will likely become the preferred way of conducting business in the future. Of course, electronic contracts are not without their downsides, including security, privacy, and data management concerns.

 

How We Can Help

If you are concerned about the validity of your business contracts, it is imperative to consult with an experienced business attorney. Our firm can help you achieve your business goals, while also minimizing your liability. Contact us today to schedule a free consultation.

 

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