POSTED June 16, 2020
A common belief among many businesses is that physical signatures have greater legitimacy than digital signatures. But this isn’t true. Around the world, eSigned documents are considered legit for almost all transactions and documentation with minimal exceptions. With unique regulatory laws governing electronic signatures in every country, this article is a brief outline of the legislation in place in the US and Canada that deal with e-signatures.
In the United States, the Federal Electronic Signature in Global and National Commerce Act (The E-Sign Act) and the Uniform Electronic Transactions Act (UETA), governs the legal framework for e-signatures and electronic contracts.
Both the UETA and the E-Sign Act define an electronic signature as, "an 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," and an electronic record is a record that is, "created, generated, sent, communicated, received, or stored by electronic means."
The E-Sign Act applies to all interstate and foreign commerce, and almost every commercial business contracts in the United States comes under the E-Sign Act. Specific businesses may also have particular eSignature regulations that concern to their industry inflicted by federal and state laws.
UETA gives states a structure to enact state law concerning the enforceability of e-signatures and the legality of electronic records. New York, Illinois, and Washington are the only states that have not adopted UETA. Each of these states has established acts similar to UETA to govern and handle electronic transactions. These statutes are the Electronic Signatures and Records Act (ESRA) in New York, the Electronic Commerce Security Act (ECSA) in Illinois, and; the Electronic Authorization Act (EAA) in Washington.
Uniform Electronic Commerce Act (UECA) governs the e-signature standards in all Canadian provinces and territories except Quebec. Quebec has adopted its own law not based on UECA, the Act to Establish a Legal Framework for Information Technology to provide a binding to the standards. On the federal level, Personal Information Protection and Electronic Documents Act (PIPEDA) endorsed the use of eSignatures officially. The act became in effect in 2004.
According to the laws of UECA, electronic means, "created, recorded, transmitted or stored in digital form or another intangible form by electronic, magnetic or optical means or by any other means that has capabilities for creation, recording, transmission or storage similar to those means." An electronic signature is defined as, "information in electronic form that a person has created or adopted to sign a document, and that is in, attached to, or associated with the document."
In both Canada and the USA, the laws outline certain documents are needed to be printed on paper and require wet-ink signatures. These include:
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