Since the ESIGN law of 2000 passed, electronic signature in the United States has been formally defined as…
“an electronic sound, symbol or process that is attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.”
Yet, now, more than 18 years later, we still find many people who don’t know what this really means.
When our CEO, Dave is asked to speak about electronic signature, he often begins by asking those in the room if they’ve ever signed or agreed to anything using electronic signature. The first few times he did this, the results surprised him… as only 30-50 percent of the room would raise their hand. Early on, he had the idea to follow up with the question:
“How many of you have loaded software onto your laptop, or perhaps, bought something off of Amazon?”
As you might imagine, nearly all hands are raised in response.
Now imagine how many jaws hit the floor after he informs his audience that an “I agree” box–accepting the software end user license agreement–OR the “Place your order” button–agreeing to Amazon’s conditions of use–is a legally binding form of electronic signature.
Is it commonplace to execute electronic signatures for documents or agreements by simply checking a box? The check box itself does meet the “symbol” requirement of ESIGN, but the answer is more complicated…
Of the three items that define an electronic signature, electronic sound, symbol or process, the most important interpretation is the process.
The case of Zakuski v. General American does a superb job of outlining the validity of electronic signatures in accordance with its process:
In 2012, the case was heard before the Michigan Supreme Court. It involved the mother and second wife of a recently deceased doctor. Upon marrying his second wife, Dr. Z changed his life insurance beneficiary from his mother to his newly beloved.
This electronic process required the entry of many personally identifying attributes, such as the doctor’s social security number, mother’s maiden name, policy number, etc. Further, an email was sent to his email notifying him of the change.
Because of this process, the court found it significantly unlikely that someone would have:
- known the doctor’s life insurance policy supplier;
- been made aware of the ability to change a beneficiary using the supplier’s e-service;
- access to the personally identifying attributes necessary to authorize the change; and
- changed the beneficiary.
Further, no complaint or action ensued following the email alert. Because of this and the mother’s lack of evidence proving otherwise, the court upheld the change of beneficiary authorized by the doctor via his electronic signature. The case was again upheld by an appeals court.
The validity resides in the process…
By showing the process that was used to identify the doctor (attribution) and the steps required to change and authorize a beneficiary, General American’s claim that the electronic signature was non-fraudulent was upheld.
Thanks to the ESIGN and UETA act coupled with the unequivocal support of lower and higher courts, electronic signature is becoming widely accepted among today’s businesses and consumers.
This article was authored by a field specialist or subject matter expert for distribution on the AssureSign blog.