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A History of E-Signature Law

By: Steve Stormoen / Wednesday, December 28, 2016

By (c) 2006 Zubro (image by myself) [GFDL (http://www.gnu.org/copyleft/fdl.html), CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0/) or CC BY-SA 2.5-2.0-1.0 (http://creativecommons.org/licenses/by-sa/2.5-2.0-1.0)], via Wikimedia Commons

On July 1, 2000, President Bill Clinton e-signed a bill into law for the first time in a way we’d find strange, or even archaic today. According to a New York Times story, he swiped a “signature card” through a scanner, typed in a password, and “marveled as a replica of his signature appeared on the screen.”

The e-signature was purely ceremonial, as he’d already signed the bill into law with a traditional pen and paper earlier that day. Nonetheless, the moment was crucial for the history of e-signatures: the piece of legislation he signed was the Electronic Signatures in Global and National Commerce Act. More commonly known as the ESIGN Act, the law established that an electronic contract or signature could not be ruled to be less legally reliable or enforceable based on its electronic nature.

However, the history of e-signature law began long before the ESIGN Act, and the topic remains relevant to this day. Along the way, e-signature technology has progressed from morse code to President Clinton’s signature card to today’s e-signatures, like those provided by RightSignature, which are usually hand-drawn using your mouse or the touch screen of your mobile device.

E-Signatures: The First 150 Years

Only a few years after the Civil War ended, the New Hampshire Supreme Court argued for the acceptance of electronic signatures, even though the technology in question was obviously quite different. It seems that as quickly as electronic communication became available with the advent of the telegraph, businesses and individuals were looking to use that technology to make business deals more quickly and easily. In the year 1869, reviewing the case of Howley v. Whipple (48 N.H. 487), the court determined,
"It makes no difference whether [the telegraph] operator writes with a steel pen an inch long attached to an ordinary penholder, or whether his pen be a copper wire a thousand miles long. Nor does it make any difference that in one case common record ink is used, while in the other case a more subtle fluid, known as electricity, performs the same office."
By SayCheeeeeese (Own work) [Public domain], via Wikimedia Commons
The New Hampshire Supreme Court was the site of the first major ruling on e-signature law.
More than one hundred years later, the fax machine presented a similar challenge: can your contract be accepted as valid even if the copy you hold doesn’t carry the original ink of a signature? While the generally accepted answer was an emphatic “yes,” it wasn’t until years later that governing bodies created clear laws governing electronic contracts, beginning in the US on the state level.
The Uniform Electronic Transmissions Act, or UETA, is a set of uniform laws passed in 47 US states, beginning in California in September 1999, as a way of coming up with a common definition and enforcement of e-signatures. It was quickly adopted across the country — today, only New York, Illinois, and Washington have not passed UETA, and each of these states has their own similar law governing e-signatures.

Shortly thereafter, the European Union passed its Electronic Signatures Directive 1999/93/EC which delivered a similar definition and ruling of e-signatures. In the years since, laws governing e-signatures have been established in nearly every nation on earth, from Canada to Vanuatu. Spearheaded by the 2001 passage of the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Electronic Signatures, businesses today generally conduct international transactions using e-signatures with confidence.

2001-Present: Widespread Adoption

With the spread of businesses conducting their operations online, the present legal framework for e-signatures is largely taken for granted. However, the history of e-signature law is still a work in progress. On July 1, 2016 — exactly 16 years after the ESIGN Act was signed into law, the EU overwrote its 1999 Electronic Signatures Directive with the new eIDAS regulations, intended to help standardize Europe into a “digital single market.”

In the rest of the world, since the inception of e-signature laws around the turn of the century, the story of e-signatures is about adoption. While e-signature legislation is largely crucial for the enormous uptick in business operations such as banking, the actual practice of getting legal documents signed online is still gaining momentum. In fact, as recently as 2014, three of the legislators responsible for supporting the original ESIGN Act — Senators John McCain and Ron Wyden, plus Representative Anna Eshoo — wrote a letter to the United States Commerce Secretary urging the US Government to make wider use of e-signatures as a way of improving productivity, reducing waste, and cutting unnecessary costs.

Meanwhile, this technology — almost 150 years old — is being adopted by savvy businesses in industry after industry who understand how much time and money can be saved with the humble e-signature. If your business is ready for e-signatures, sign up for a free trial of RightSignature today.

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