During the past few months, the COVID-19 pandemic has fundamentally changed the way most people live their lives and go about their businesses. With numerous non-essential businesses being forced to close their doors and go remote, there are lots of situations where a wet signature is simply a barrier that presents a risk to health and safety that is fundamentally no necessary. This has led to the growth of something called e-signatures, where people essentially sign documents remotely. At the same time, it is important for people to understand how this process works, what this means, and how the growth of e-sign during the COVID-19 pandemic might impact them.
As a rule of thumb, e-sign carries with it the same level of power as signatures that might take place on pen and paper. There are a few laws that govern how the e-sign process is treated. They are called the Uniform Electronic Transactions Act, which is often shortened to UETA, and the Global and National Commerce Act, which is usually shorted to E-SIGN. Many of these have rules that overlap.
In general, the guiding principles of both of these laws are the same. When the parties have a contract that is agreed to via e-sign, the legal effect cannot be denied solely because it is in an electronic format and the contact cannot be denied and deemed unenforceable purely because it was done electronically. This is an overview of how e-sign works, the power it carries, and how it is comparable to signatures that are done via pen and paper. As a result, e-sign has been adopted by both Washington D.C. as well as 48 other states.
This means that e-sign has the same legal standing as physical signatures. Now, there are also certain exceptions that can be applied to e-sign. For example, e-sign cannot be used to cover domestic law documents or probate documents. Furthermore, e-sign usually does not apply to foreclosure proceedings in the world of real estate and other documents that might be covered under the domain of the Uniform Commercial Code, which is shortened to UCC. Furthermore, e-sign address signatures on contracts usually do not address corporate documents, such as board consents. The laws regarding this matter vary from state to state, so it is important for people to know how these statutes work.
Clearly, e-sign has grown in popularity during the pandemic. With remote work being the new normal, it is important for everyone to get familiar with e-sign. The COVID-19 pandemic has changed the way most people live their lives and those with questions or concerns should reach out to a trained legal professional.