Silanis Web Seminars held an online conference to explain the evidence requirements for electronic signatures and records, with featured speakers Michael Laurie, co-founder and vice president of strategic development at Silanis and Margo Tank, partner at the law firm Buckley Sandler LLP.
The webcast identified the various aspects of e-records and e-signatures and explained issues behind the capture of intent requirement in e-signature legislation and consent factors that can impact the transaction. Another topic addressed was the concerns and issues that can impact the effectiveness of electronic documents presented as evidence at trial.
“Electronic evidence should be easy to understand,” Laurie said. “This really goes to presentation, whether we’re sending it to the opposing attorney or bringing it into court, we want to make sure that it’s easy to understand and it’s presentable enough to be able to provide the impact that the trial attorney wants to make with that evidence.”
The Electronic Signatures and Global and National Commerce Act and the Uniform Electronic Transactions Act are the two pieces of legislation that make it possible to present information and to sign agreements electronically, whereas in the past, written signatures would have been required. The new commerce laws aren’t without challenges though.
A system for signing and storing electronic records requires an understanding of the interaction between the storing and signing theory and the laws in UETA and ESIGN, Tank said. That relationship must be understood if electronic documents are going to be enforceable in a court of law in the instance of a dispute.
ESIGN and UETA act as, what Tank called, “overlay statutes” because the two laws can replace paper writing requirements and ink signatures with their electronic counterparts as long as the requirements in ESIGN and UETA are met. The laws are used if a state’s law varies greatly from the two laws or if a state has not yet adopted any e-sign laws of its own.
Both laws define the term electronic signature to mean, “A sound or similar process created or adopted by the signer with the intent to sign the record and either attach to, or logically associate it with a record.”
“Look at it by breaking down the definition into three categories,” Tank said. “First — a sound. A sound could be a recorded telephone call where the signer states he or she is in agreement with the terms. A symbol can be any graphic representation whether it’s a name, picture or a design. This is very similar to the definition of a signature of paper documents. An electronic signature under ESIGN and UETA can also be a process. It doesn’t have to be something visible on the face of the record.
“The second category is the intent of the signer. Because intent is based on a person’s state of mind, evidence of intent is critical to ensuring an enforceable transaction. On a paper document the intent is usually more easily understood because of socialization.
“The third category is logical association. As a matter of necessity, a paper document has to be in front of the signer before a wet signature can be created. In an electronic environment, however, the record being signed doesn’t necessarily have to be on display. We’ve seen some signatures embedded in the document.”
Common challenges of e-signatures
UETA and ESIGN do not change the existing law rules concerning contested signatures and the burden of proof. If the authenticity of an e-signature is challenged, the person enforcing the signature still has to prove its authenticity.
Among the most common challenge for e-signatures is whether or not the signature is that of the signer, Tank said. Another common challenge happens when the approved signature is one key stroke, and the signer argues they hit the key by mistake. The best way to prevent this is to include multiple strokes or to make the signature embedded in the document.
“It’s important not to confuse what electronic signature is with the authentication of the signer’s identity,” Tank said. “Authentication involves accurately identifying participants of a transaction. A signature doesn’t have to provide evidence of the signer’s identity, although some types of signatures do. And a signed record doesn’t have to protect against alteration. But again, some do.”
When building your technology, make sure that the execution of an electronic signature is preceded by an opportunity for the signer to review a description, an explanation of the procedure used to create the e-signature and the process which makes the signature effective.
The purpose of the signature should be clear in the process. This can be clarified in a written explanation of the process that leads up to the signature. The record should be presented for signature before the signature becomes effective. Record retention for at least 24 months is imperative in order to comply with UETA and ESIGN and to be able to admit the record into evidence in the case of a trial.
“A reliable method of record retention is critical,” Tank said.
Silanis offered the following tips to preserve the accurate preservation of the information contained in the electronic record:
• Be able to demonstrate that the electronic records accurately reflect the relevant information contained in the record at the time;
• Be able to prove it was signed or delivered, is accessible and capable of being obtained to anyone requesting access by law or agreement; and
• Be able to prove the electronic record can be reproduced for later use.