What Makes an Electronic Signature Enforceable?
Signatures, and electronic signatures in particular, are a crucial element of the prior express written consent (PEWC) exemption to the general prohibition against using an Automated Telephone Dialing System (“ATDS”) to contact cellular numbers or numbers on the national Do-Not-Call Registry as set forth in the TCPA.
Under FCC and FTC rules, PEWC must be in the form of a written agreement that is signed by the consumer. In most cases, the required signature is obtained electronically, via an online form submission process. But how do you know whether an electronic signature obtained in that manner is legally valid?
The two main sources of law that govern electronic signatures in the United States are: (1) the Electronic Signatures in Global and National Commerce Act (E-Sign); and (2) the Uniform Electronic Transactions Act (UETA).
E-Sign is a federal law that applies to interstate commerce transactions (i.e., affecting parties from different states) and transactions between US and non-US parties. Agreements between parties from the same state are covered by the UETA, which has been adopted by every state except for New York, which has instead enacted similar legislation that essentially mirrors the UETA.
Both E-Sign and the UETA provide that an agreement may not be denied legal effect or enforceability solely because it is in electronic form and that if a signature is required, an electronic signature will suffice. Both statutes define “electronic signatures” broadly: any sound, symbol or process attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the record. Under this definition, an electronic signature is most likely to be enforceable if it can be shown to have met the following three requirements:
1. Authentication: The signature must be capable of being “authenticated” or “deemed attributable” to an individual person. A signature is attributable to a signer if it was the act of that particular individual, which may be demonstrated by the context and circumstances in which it was provided. Ideally, the person was required to enter a password or PIN to prove his or her identity as the signer. In the absence of that, circumstantial evidence can be used to show that a particular consumer is the signer, such as collecting an IP address tied to that person.
2. Intention: An electronically signed agreement may not be enforceable if a party did not intend to sign it. Therefore, there must be some method employed to demonstrate the requisite intent, such as employing an unchecked box alongside a disclosure which clearly states that checking the box constitutes an electronic signature.
3. Association: The signature must be “logically associated” with the record. This requirement is relatively straightforward to satisfy when signing documents electronically via electronic signature platforms such as DocuSign. In the case of an online form submission, it necessary to provide server metadata automatically collected during the website visit in which the signature was provided (IP address, time/date stamp, etc.), which can serve as an audit trail.
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