It is commonly understood that if you sign a paper contract with an ink pen, you are bound by its terms. In a legal sense, by writing your name in a unique and distinctive way, you are identifying yourself and indicating your agreement to the document on which your signature appears. We can all think of famous and iconic signatures — from John Hancock (which itself has become synonymous with “signature”) on the (engrossed copy of the) Declaration of Independence, to Secretary of the Treasury Jack Lew on our dollar bills (although he ultimately changed it to be less “loopy”). While our own signatures might not be as recognizable, we each have a unique and stylistic signature that we call our own. Perhaps, like me, you even used to practice signing your name over and over on the cover of your high school notebook — because you never want to be unprepared when someone comes asking for an autograph. (Still waiting, slightly less prepared.)
But what if you “sign” on your computer with a digital version of your signature inserted into an electronic document rather than with ink on paper? Or what if you simply click “I Agree” on a website but do not actually “sign” anything? In these instances, there may not be any unique or distinctive “signature” on the document. Instead, there might simply be your name along with the date and time when you “signed”. Or perhaps there is no tangible record of your assent — just an electronic record on some remote server indicating that you clicked “I Agree” at 8:47:32 am on July 22, 2016 from a computer with a certain IP address. Are these still valid and enforceable “signatures” in the eyes of the law? Are you legally bound by the terms of the contract or agreement? (Or, an issue we may discuss in a future post, did you really agree to give this company access to all of your data and information?)
With a few exceptions, the answer is “yes”, because electronic signatures (or “e-signatures”) are generally just as (if not more) valid and enforceable than “regular” ink signatures. (The exceptions include wills, codicils, and testamentary trusts, and certain transactions for the sale or lease of goods governed by Oregon’s UCC under ORS chapters 72 and 72A, respectively. Additionally, certain state and federal regulations may establish additional or different requirements in certain industries for e-signatures and electronic records — e.g. 21 CFR Part 11 establishes certain requirements for organizations regulated by the FDA.)
Before discussing the specific details of how Oregon handles e-signatures, here is a brief background of the relevant laws:
In 2000, the federal government enacted the Electronic Signatures in Global and National Commerce Act (or “ESIGN”) to address issues related to electronic signatures and records. In general, the ESIGN act recognized that electronic signatures and records are valid and enforceable in transactions where all parties choose or agree to conduct the transaction electronically.
In 1999, before ESIGN was enacted, the National Conference of Commissioners on Uniform State Laws (a non-profit that drafts and recommends uniform laws) proposed the Uniform Electronic Transactions Act (or “UETA”). The UETA was subsequently adopted (in one form or another) by 47 states and the District of Columbia. Like other “uniform laws”, the purpose of the UETA is to establish consistency and uniformity among the various states with respect to electronic signatures and records. Generally, the UETA states that whenever a written document or signature is required by law, an electronic record or e-signature can satisfy the legal requirement (if the parties have agreed to transact business electronically).
Together, ESIGN and UETA legitimized electronic signatures and records, and essentially eliminated any question regarding whether using e-signatures and retaining electronic records was a safe way to conduct business.
Effective June 22, 2001, Oregon adopted the UETA. (See ORS chapter 84.) Basically, Oregon’s adoption of the UETA means that parties can — but are not obligated to — agree “to conduct business by electronic means”. In other words, if both parties in a transaction agree, they can use e-signatures and electronic or digital documents rather than paper.
Under Oregon’s UETA, an “electronic signature” is defined as “an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record”. In other words, the law recognizes that your “electronic signature” might not actually be your “signature” — but instead might be a “sound, symbol, or process” that otherwise indicates your agreement or assent. As a result of this law, clicking “I Agree” on a website is the legal equivalent of you signing your name in ink on a piece of paper and mailing it to the company that owns and operates the website.
Similarly, an “electronic record” is defined as “a record created, generated, sent, communicated, received, or stored by electronic means”. So, just as with an electronic signature, the law recognizes that an electronic or digital version of a document is the legal equivalent of a paper record. As a result, it has become much easier for offices and businesses to adopt “paperless” policies that rely on electronic records rather than ever-expanding physical files filled with paper.
Undoubtedly, if you have bought a house in the past few years, you are familiar with e-signature platforms like DocuSign (which seems to be the most popular, but there are others, such as eSignly, Signix, Canvas, etc.). Not too long ago, you would have had to sit at the bank and manually sign tens of pages, writing your signatures over and over. Now, with the advent of e-signatures, we can sign these same documents on our iPhone as we sit on the couch watching TV. (Note: Probably better to focus on reading the documents you are signing rather than watching TV. But you get the point.)
Similarly, we have all clicked “I Agree” or “I Accept” (commonly referred to as a “clickwrap” agreement) when asked to review the website terms and conditions before signing up for a website like Amazon or Gmail. As a result of ESIGN and UETA, this act of clicking a button on a website is the legal equivalent of signing your name in ink on paper. (Note: Courts are generally willing to enforce “clickwrap” agreements that require the website user to affirmatively agree to or accept the terms — even if the user does not actually read or review the terms — but courts are less willing to enforce “browserap” agreements, such as “website terms and conditions” that purport to apply to anyone who accesses or uses the website, and typically do not require any type of affirmative agreement or assent. But this is a relatively complex topic that is best reserved for a future article.)
Although some people are still skeptical of e-signatures, there is an argument to be made that they are actually more capable of being tracked and authenticated than paper-and-ink signatures. While forgery may be uncommon (and mostly confined to TV crime dramas), it is likely much easier to forge an ink signature than it is to fake an e-signature, because (when using the proper technology or platform) e-signatures include an audit trail and other indicators of authenticity (e.g. password-protected signatures, identification of IP addresses and other unique identifiers, and immediate feedback – including electronic copies delivered to your email inbox).
In any event, if you decide to use e-signatures and electronic records in your business, you need to make sure that all parties to the transaction agree to use electronic means to conduct the transaction — whether this is done by including a specific provision in the agreement itself or by using a designated e-signature platform — and make sure you have the appropriate policies in place for data security and electronic records retention. Because knowing that e-signatures are valid and enforceable is only useful if you can actually locate a copy of the document when you need it.