Technology advancements have provided the means for businesses to grow their products, services and consumer base, both nationally and globally. Using electronic communications to form contracts, whether by website purchases or by e-mail correspondence, businesses must have confidence in the validity and enforceability of those contracts and whether they can be evidenced in court proceedings.  Much of the business’ confidence, or lack thereof, is derived from electronic and digital signatures. While the legislation in the U.S. is clear and tested in court, international legislation is untested or, depending on the country, doesn’t exist.

U.S. Legislation. In the U.S., there are two primary pieces of legislation that govern digitally-created contracts, namely: the E-Sign Act and the UETA, or the Uniform Electronic Transactions Act.  The E-Sign Act is a piece of Federal legislation that prevents electronically-created documents and contracts from being held out of evidence simply because they were created digitally or electronically. The UETA has served to provide a singular law amongst the States to prevent confusion in this area.  It has been adopted by 47 states, though the remaining three states do recognize electronic signatures.

Not only are UETA electronic signatures allowed and recognized by law, but have proven to be even stronger evidence in court than a written signature. In order to meet the guidelines set forth in UETA, most companies employ e-signature and electronic contracting software and the services of vendors. Choosing a specific e-signing vendor will depend on the type of business and the types of transactions.  Now that some of these products and services have been tested by the judicial system, determining which is best suited to a particular business or transaction can be complex and confusing.

Global Legislation. While most of the first-world nations have adopted legislation to deal with this matter, emerging markets may not have. Beyond that, the vast majority of legislation adopted globally has yet to be tested in court. This does create problems when commerce is reaching out to new places. Some countries with legislation include: Canada, Australia, New Zealand, the United Kingdom, the European Union and South Africa. These countries’ laws are extremely similar to the legislation in the U.S. but because of different nomenclature and being untested, there is some confidence to be built.

If your business uses electronic or digital signatures, would like to start or is looking for help in determining the efficacy in international transactions, please don’t hesitate to contact us in this matter.