Question

Does the Electronic Signatures in Global and National Commerce Act (E-SIGN Act) bring uniformity to electronic contracting? Should additional new federal laws be enacted to bring more uniformity to electronic contracting?

Answer 1

(a) The Electronic Signatures in Global and National Commerce Act is a United States federal law passed by the U.S. Congress to facilitate the use of electronic records and electronic signatures in interstate and foreign commerce by ensuring the validity and legal effect of contracts entered into electronically. In 2010, both House of Congress passed a resolution at the request of industry leaders, recognizing June 30 as "National ESIGN Day."

Although every state has at least one law pertaining to electronic signatures, it is the federal law that lays out the guidelines for interstate commerce. The general intent of the ESIGN Act is spelled out in the very first section (101.a), that a contract or signature “may not be denied legal effect, validity, or enforceability solely because it is in electronic form”. This simple statement provides that electronic signatures and records are just as good as their paper equivalents, and therefore subject to the same legal scrutiny of authenticity that applies to paper documents.

(b) Countless business transactions occur over the Internet every day, without any face-to-face interaction between the parties involved. Purchasing insurance, signing real estate contracts, using credit cards, and entering into financial agreements are just a few of the actions that people perform electronically.

Even though electronic transactions are so common, many people remain unsure about whether electronic signatures (e-signatures) and electronic contracts (e-contracts) are safe, valid, and legal. The good news for businesses and consumers alike is that e-contracts and e-signatures are, for the most part, safe and reliable methods for doing business. The parties involved in e-contracts and e-signatures should, though, take certain steps to ensure the validity of their agreements.

Hence, there is need of new federal law be enacted to bring uniformity to electronic contracting.