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Digital workflows are becoming the expected process for conducting business. They save time, increase accuracy, provide a better experience, and ultimately drive to faster resolutions and approvals. But the risks and opportunities must be understood before implementing any new technology.
See the latest trends and practices regarding the adoption, use, and verification of digital and electronic signatures for 2016 and beyond.
Legality of Electronic Signatures -- CLE Webinar 7.12.16
Legality of Electronic Signatures
Director, Legal Industry
Int_WB_Amp Your Legal NPS_06_15_NA
1. Host IntroducLons
2. What is an eSignature?
3. eSignature Law
1. Statutory Analysis
2. InternaLonal Overview
3. PracLcal ConsideraLon
4. AuthenLcaLon & Security– How DocuSign works
• DocuSign General Counsel
• “Impact General Counsel of the Year 2016”
‒ The Recorder
• “General Counsel of the Year - 2013”
‒ Silicon Valley Business Journal
• “Most InnovaLve Legal Team – 2012”
‒ Inside Counsel Magazine
• LiLgaLon Partner Hancock, Rothert & Bunsho`
• General Counsel, Zynga
• VP & AGC, Yahoo!
• DocuSign Director Legal Industry Ver?cal
• Responsible for DocuSign’s SoluLon for Law Firms
• JD, Northwestern University School of Law
• Corporate TransacLon Aforney
• In-House IP Licensing Aforney
• Ariba, 3-PAR, LinkedIn, DocuSign
Electronic Signatures are Everywhere, and Come in Many Forms
An electronic signature is an
“electronic sound, symbol or process,
afached to or logically associated with
a contract or other record and
executed or adopted by a person with
the intent to sign the record.”
- 15 USC 7006 (ESIGN Act)
Electronic signatures do not need to look like a
Legal Founda?on for Electronic Contracts and Signatures
Common Law (contract formaLon based on oﬀer, acceptance, consideraLon)
• United States (state and federal)
‒ eIADS ( EU regulaLon No 910/2014)
‒ Repeals European DirecLve 1999/93/EC
‒ Electronic TransacLons Act (UK)
‒ Uniform Electronic Commerce Act (Canada)
‒ 1996 UNCITRAL Model Law on Electronic Commerce
‒ Many more (60+ countries have laws enabling electronic signatures)
Uniform Electronic Transac?ons Act (UETA)
• Dra`ed by Uniform Law Commission (responsible for UCC) in 1999
• Response to states adopLng inconsistent laws to govern electronic records
• Overlay statute that amends state laws or rules that require “wriLng” or
• Adopted quickly, but California adopted with a number of excepLons
• Now adopted in 47 states + DC, Puerto Rico, Virgin Islands
‒ New York, Washington, and Illinois also have laws permiqng electronic signature
that aren’t based on UETA
Electronic Signatures in Global and Na?onal Commerce Act
• Passed by Congress in 2000
• Federal version of UETA
• Consumer protecLons
‒ If the consumer has a right to receive informaLon on paper, it may be provided
electronically only if consumer disclosure requirements are met
‒ Improper consumer disclosure does not render the underlying contract invalid
‒ Consumer noLce requirements mirrored in some states’ implementaLon of UETA
• PreempLon of nonconforming state laws
‒ Laws conforming to the model UETA are not preempted
General Rule of Validity
Central concept of UETA, ESIGN, and other state laws:
A signature, contract, or other record related to any
transacLon may not be denied legal eﬀect, validity, or
enforceability solely because it is in electronic form.
No speciﬁc technology or process must be used, and ESIGN speciﬁcally preempts
any state law that would require or give greater legal status to a parLcular
Permissive rather than proscripLve – no one is required to do business
electronically, but if the parLes choose to do so it may not be denied validity on
Most Civil Law countries (including most of Europe and LaLn America) follow a “two Ler” approach
to electronic signature, modeled on the 1996 UNCITRAL Model law on Electronic Commerce.
• “Simple” electronic signature is admissible as evidence, and generally suﬃcient for commercial
• “Qualiﬁed Electronic Signature” may have extra legal weight (such as a presumpLon of
authenLcity), or may be required for certain purposes, such as submiqng documents to
• QES must use speciﬁc cryptographic technology called Public Key Infrastructure (PKI)
• The PKI process involves a digital cerLﬁcate, which must be issued by a CerLﬁcate Authority that is
approved by the government (or issued by the government itself)
Most Common law jurisdicLons, including the US,
Canada, the UK, and Australia, follow a
“minimalist” model, where electronic signatures
are the legal equivalent of a handwrifen signature.
Electronic Signature vs. Digital Signature
An electronic signature is the product of
any electronic means of signing.
A digital signature is the product of a
speciﬁc cryptographic process called
Public Key Infrastructure
• Digital signatures are not always electronic
signatures, and vice versa
Signing with a Digital CerCﬁcate
Digital signatures are uncommon in the United
States, but are the industry standard in many
parts of the world.
eIDAS paves the way for a
uniﬁed EU eSignature
signatures by removing
Enforces Pan-EU Interoperability
(July 1st, 2016)
Mandatory AdopLon by all
Prac?cal Issues using Electronic Signature
Legal Suﬃciency vs. Enforceability
• UETA and ESIGN answer the quesLon “is it a signature?”
• They do not answer the quesLon “is it your signature?”
‒ AfribuLon will be a mafer of fact, just as it is with a wet signature
• Admissible under FRE, but subject to the same rules
‒ Lorraine v. Markel American Insurance Company, 241 FRD 534 (D. Md. 2007)
• Electronic process o`en provides more evidence than a paper process
‒ Time and Date stamp, IP address, etc.
Considera?ons in Implemen?ng Electronic Signature
• Are my documents excluded from ESIGN and UETA?
‒ Can they be electronically signed/recorded under some other rule or statute?
‒ Probate law (electronic wills permifed in Ohio, lifle case law elsewhere)
‒ Court rules
‒ PorLons of the UCC
• How will our process address:
‒ ESIGN Consumer Consent (when it applies)
‒ NoLce and Delivery
‒ Signature process – intent and aNribu?on
‒ Recipient’s right to retain copies
‒ Document integrity and audit trails
What is holding us back?
“We need a handwrifen signature for…”
‒ Proof in court
‒ ‘Important’ documents
‒ ‘legal’ documents
‒ Consumer agreements
‒ InternaLonal agreements
‒ Government audits
Proving a signature in court
“Is this your signature, madam?”
If the alleged signer denies it, how do you prove it?
• Other evidence
• Witnesses (if available)
• HandwriLng experts
• Must challenge opposing handwriLng expert
What the real courts say
DocuSign as an Example
900K+ Documents Signed/Day
11 Court Cases over 12+ years
0 Invalid DocuSign Signatures
“Because the documents were signed
electronically through a company called
DocuSign, plainLﬀs were able to show the
precise moments that these documents were
created, electronically delivered and signed.”
Sollner v. Linton (2014 Cal. Super. Ct. July 2014)
Suﬃciency of Electronic Signatures and Records
Barwick v. GEICO (2011 Ark. 128)
Arkansas Supreme Court rejected argument that electronic waiver of medical
beneﬁts was not a “signed wriLng”, ciLng the plain language of the Arkansas
Electronic Signatures meet Statute of Frauds wriLng requirements
• Sha3uck v. Klotzbach, 14 Mass. L. Rep. 360 (Super. Ct., Mass.,
December 11, 2001);
• Rosenfeld v. Zerneck, 4 Misc. 3d 193, 776 N.Y.S.2d 458 (Sup. Ct., Kings
Co. 2004) (but see Vista Developers Corp. v. VFP Realty LLC, 17 Misc. 3d
914, 847 N.Y.S.2d 416 (Sup. Ct., Queens Co. 2007) – Signed emails
could be used to prove the existence of a real estate contract.
eCommerce: Clickwrap and Browsewrap Agreements
Fteja v. Facebook
Online terms held to be
• Terms presented in
below “Sign Up” bufon
• Sign Up process involved
The fact that Facebook did
not force Fteja to review the
terms was considered
Jerez v. JD Closeouts
Online terms held to be
• Terms of Sale were not
directly referenced in the
• Terms were presented
only on the “about us”
The court determined that
the contract terms weren’t
As a general rule, clickwrap, where the
user takes some aﬃrmaLve acLon, and
has reasonable noLce of the contract
terms, has been enforced.
Browsewrap, where the terms are
available, but no acLon is required to
accept or acknowledge them, are much
less likely to be enforced.
Zulkiewski v. General American Life
Under UETA (Michigan), an electronic signature may be afributed to a person by
“any reasonable means”. Here, General American used a combinaLon of email and
Idle conjecture about impersonaLon is not enough to overcome reasonable facts
Adams v. Quicksilver. The vendor’s system did not protect the signed record against
post-execuLon alteraLon, and the post-execuLon audit trail maintained by the
vendor showed that two Quicksilver employees had accessed the record a`er it was
ﬁrst saved and submifed for storage.
Original Record vs. Proof of Process
Person v. Google, Inc.
The court relied on proof of process as opposed to proof by the document
itself to support defense.
Bar-Ayal v. Time Warner Cable Inc.
Clearly presented agreements will be enforced unless unconscionable.
Court accepted a re-enactment of the agreement formation process (where
the plaintiff had to click on the Accept button eight times) in order to refute
the plaintiff’s claim that he never saw the agreement.
Hook v. Intelius
Evidence of process alone is sufficient to support a finding that the process
used is standard in the industry and produces an accurate result.
Ruiz v. Moss Bros (CA Court of Appeal, December 23, 2014)
• the Court refused to enforce an employer’s arbitraLon agreement, ﬁnding that the
employer did not present suﬃcient evidence that the electronic signature on the
arbitraLon agreement was “the act” of the employee
• The decision reﬂected that authenLcaLon must be proven (just as it must with a paper
signature), but states that the burden to do so is “not great”
J.B.B. Investment Partners v. Fair (CA Court of Appeal, December 30, 2014)
• the Court held that the defendant’s typed name in an email did not consLtute an
electronic signature under UETA, because there was no demonstraLon that he intended
to enter an agreement electronically
• The Court acknowledged that consent to do business electronically needn’t be explicit,
but it must be proved nonetheless
The key lesson from these two cases is that the formaliLes mafer.
Failure to keep adequate records or obtain proper consent can impact enforceability
1. Signer Iden?ty
Industry-Leading Choice of Authen?ca?on Op?ons
Enterprise Add-On Standard Method
Primary MulLfactor add-ons
KBA or In
2. Audit Trail
Beneﬁts of Electronic Signature
• Documents can be signed remotely
• Counterparts can be sent simultaneously, but tracked in a single workstream
• Electronic documents can include required ﬁelds, ensuring that key
informaLon is ﬁlled in prior to compleLon
• Real Lme informaLon on status of documents
• Reduced cost and hassle by eliminaLng paper, mail, couriers, etc
• Improved client experience
• Less non-billable administraLve Lme
FAQ (these are the ones we hear most o`en from lawyers)
• What about notarizaLon?
• E-notary is permifed in the majority of states, but there has been very lifle adopLon
• only Virginia allows remote notary – all other states sLll require physical presence
• NotarizaLon is o`en used when not legally required. Electronic alternaLves exist that may
serve the same funcLon if notary is used for policy rather than legal reasons
• Can agreements be backdated? Or signed in advance?
• Most esignature soluLons record the actual Lme a signature event occurs. Free form ﬁelds
may be used to enter another date, but the audit trail will reﬂect the real Lme of signature
• SoluLons like “signature page escrow” can be used to collect signatures in advance
• How can we ensure the signer actually read the document?
• How do you do it now? No one can be forced to read a document, but you can increase the
odds (or create befer evidence) with pracLces like requiring iniLals next to key terms
• Make sure it is at least possible to read them – for example, if documents are afached to
an email, make sure the recipient has the right so`ware to open them.