Is an Electronic Signature Legally Binding?

Is an Electronic Signature Legally Binding?

Like most legal answers – the answer is “it depends.” There are two major pieces of legislation that introduced the use of electronic signatures into our mainstream lives – (1) Uniform Electronic Transactions Act (UETA) and (2) Electronic Signature in Global and National Commerce Act (ESIGN). These were passed and adopted around the turn of the century and set the table for the use of electronic records/signatures in business transactions. Both pieces of legislation clearly state that electronic signatures carry the same legal weight and effect as handwritten signatures and an otherwise legally binding agreement does not lose its efficacy simply because it is in electronic form.

The speed and efficiency electronic signatures offer is unmatched. Forcing your clients to come into the office to sign documents or mailing documents just to get a signature seems archaic and cruel. Despite the benefits, many lawyers remain steadfast in their refusal to conduct business with electronic signature. Those who are hesitant will claim, “How can you prove it’s real?” or “What if the court doesn’t accept it?”

Let me assuage those fears – due to the federal laws stated above, electronic signatures are legally enforceable, so long as certain basic requirements are met and there is a “digital trail.”

The Federal Rules of Evidence, California Rules of Court, and Uniform Rules of Evidence generally allow electronic signatures and their reproductions to be admissible evidence.

California Rule of Court 2.257 (b) states “When a document to be filed electronically provides for a signature under penalty of perjury of any person, the document is deemed to have been signed by that person if filed electronically provided that either of the following conditions is satisfied:

Cal.Rule of Court 2.257 (b)(1) – The declarant has signed the document using an electronic signature and declares under penalty of perjury under the laws of the state of California that the information submitted is true and correct. If the declarant is not the electronic filer, the electronic signature must be unique to the declarant, capable of verification, under the sole control of the declarant, and linked to data in such a manner that if the data are changed, the electronic signature is invalidated.

If this sounds new to you, that’s because it is – this subdivision was amended and made effective January 1, 2020. Thanks to this recent amendment, court filings with an electronic signature are now expressly permitted.

Think about it this way – is it really any different than signing a document with a wet signature, scanning it into the computer and then e-filing the document? Does that not become a digital signature now? Why couldn’t a hypothetical “bad actor” alter or modify that signature? One could argue that an electronic signature with a digital trail provides greater security than a wet signature that is eventually scanned.

Human communication has changed, and the courts have adapted accordingly. Just as electronic mail has become common place and accepted as a form of communication, so has electronic signature.

All that being said, there are exceptions to this generally accepted practice. Certain areas of law do not accept electronic signature such as wills and testaments. It is imperative that you check your local rules to ensure electronic signatures are permitted.