E-SIGN: The Electronic Signatures In Global And National Commerce Act

On June 30, 2000, the United States Congress passed a United States federal law called The Electronic Signatures In Global And National Commerce Act. The law was passed to ease the use of electronic records. In addition, ESIGN facilitated the use of signatures in foreign, as well as interstate, commerce. ESIGN ensured the validity and legality of contracts entered into via electronic methods, such as with electronic signatures.

Each state has a law pertaining to electronic and digital signatures. However, the federal law under ESIGN is the law that pertains to interstate commerce. The intent of ESIGN is stated in the first section of the law. It states that a signature or contract “may not be denied legal effect, validity, or enforceability solely because it is in electronic form”.

In layman’s terms, this means that an electronic signature, or a digital signature, is as valid and just as its paper equal. In addition, the wording in ESIGN translates to mean that the same legal scrutiny used in a paper signature case for authenticity applies to electronic signatures as well.

In addition to the legal definitions set forth in the ESIGN Act, the Act also stated a Consumer Disclosure. The ESIGN Act Consumer Disclosure documented that “the rights of individuals to NOT USE electronic signatures” are preserved. In addition the law provides that consumers have the right to use only paper signatures.

The importance of the ESIGN Act is immeasurable, especially to businesses that conduct many transactions via email or over the Web. The protection it offers both the signer and the recipient is incredibly valuable.

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