The UCLA Online Institute for Cyberspace Law and Policy
The Electronic Signatures in Global and National Commerce Act (“E-Sign”)
· Key Definitions
1. Electronic – “relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.”
2. Electronic Record – “a contract or other record created, generated, sent, communicated, received, or stored by electronic means.”
3. Electronic Signature – “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.”
· Central Provisions: “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.”
· Scope of the Act
1. Applies to any transaction “relating to the conduct of business, consumer or commercial affairs between two or more persons.”
2. Does not apply to a contract or other record that it is governed by
a. A statute, regulation, or other rule of law governing the creation and execution of wills, codicils, or testamentary trusts;
b. A State statute, regulation, or other rule of law governing adoption, divorce, or other matters of family law; or
c. The Uniform Commercial Code, as in effect in any State, other than sections 1‑107 and 1‑206 and Articles 2 and 2A.
3. Other Exceptions
a. Court orders or notices, or official court documents (including briefs, pleadings, and other writings) required to be executed in connection with court proceedings;
b. Any notice of—
1/ The cancellation or termination of utility service (including water, heat, and power);
2/ Default, acceleration, repossession, foreclosure, or eviction, or the right to cure, under a credit agreement secured by, or a rental agreement for, a primary residence of an individual;
3/ The cancellation or termination of health insurance or benefits or life insurance benefits (excluding annuities); or
4/ Recall of a product, or material failure of a product, that risks endangering health or safety; or
c. Any document required to accompany any transportation or handling of hazardous materials, pesticides, or other toxic or dangerous materials.
· Interface with Other Laws
1. Traditional substantive contract law still applies.
2. Encourages states to adopt the Uniform Electronic Transactions Act ("UETA"), which permits any form of electronic symbol or message to qualify as a signature.
3. In general, provides that all state laws related to electronic signatures and contracts are preempted unless they constitute an adoption of UETA or specify alternative procedures that are technologically neutral and consistent with Titles I and II of the Act.
· Consumer Protections in Specific Instances
1. The Act mandates that if a statute, law, or regulation requires that information be provided or made available in writing to a consumer, the use of electronic records is permitted upon compliance with detailed specifications and disclosures.
2. The consumer must not only formally consent to receive records in electronic form, but the party required to furnish the information must also inform the consumer of detailed rights regarding these records that are available under the Act.
3. However, a failure to obtain electronic consent or confirmation of consent does not immediately deny the legal effectiveness, validity, or enforceability of any contract entered into with the consumer. It is therefore unclear whether a contract is valid when a business that is statutorily required to make information available in writing fails to do so.
4. In addition, it must be noted that these provisions do not require consumer consent before all electronic dealings. Rather, these clauses only apply when an existing law requires that information be provided or made available in writing to a consumer. This means that e‑businesses that are not currently required to provide paper‑based records are not obligated to abide by any of these provisions.
· Additional Features of the Act
1. An electronic signature is only valid under the Act if the signatory intends to sign the contract.
2. The Act permits notaries public and other authorized officers to perform their functions electronically, provided that all other requirements of applicable statute, regulation or rule of law are satisfied. The Act "removes any requirement of a stamp, seal or similar embossing device as it may apply to the performance of these functions by electronic means."
3. The Act does not require a party to use or accept electronic signatures, electronic contracts, or electronic records, but rather seeks to facilitate the use of these instruments by upholding their legal effect regardless of the type or method selected.
4. The Act forbids any state or federal statute from requiring a specific technology for electronic transactions. This technology‑neutral approach instead allows the market to decide which technologies will best facilitate electronic commerce.
Full Text of The Electronic Signatures in Global & National Commerce Act (2000)
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sb: 30Apr.2001