A United States federal law passed by Congress in 2000, the Electronic Signatures in Global and National Commerce Act (ESIGN Act) facilitates the use of electronic records and electronic signatures in interstate and foreign commerce. The Act ensures the validity and legal effect of contracts entered into electronically, providing a legal framework for the growth of e-commerce and the use of electronic signatures in business transactions. It was signed into law by President Bill Clinton on June 30, 2000, and took effect on October 1, 2000.
Main Provisions
The ESIGN Act includes several key provisions that govern the use of electronic signatures and records.
- Legal validity: The Act grants legal validity to electronic signatures, contracts, and other records related to interstate or foreign commerce, ensuring they have the same legal standing as their paper counterparts.
- Electronic signature definition: An electronic signature is defined as an electronic sound, symbol, or process attached to or logically associated with a contract or other record and executed or adopted by a person intending to sign the record.
- Consumer consent: The Act requires businesses to obtain consumer consent before engaging in electronic transactions and to provide consumers with certain disclosures about the transaction.
- Retention of contracts: It allows the retention of electronic contracts and records, as long as they accurately reflect the information set forth in the contract or record and remain accessible to all parties.
- Preemption of state laws: The ESIGN Act preempts state laws that are inconsistent with its provisions, although states may modify, limit, or supersede the Act's provisions in certain circumstances.
Scope and Impact
The ESIGN Act has played a significant role in promoting the adoption of digital technologies in commercial transactions. By providing a legal framework for the validity and enforceability of electronic signatures and records, it has facilitated the growth of e-commerce and the use of electronic signatures in business transactions.
State Laws
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 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".
