Transcript Introduction to ESRA

ESIGN 101
Ken Moyle
Chief Legal Officer
DocuSign, Inc.
Margo Tank
Partner
BuckleySandler LLP
David Whitaker
Counsel
BuckleySandler LLP
The UETA
• The state law solution – the Uniform Electronic
Transactions Act
– Created by NCCUSL
– Overlay statute
– Authorizes replacing writings with electronic
records
– Authorizes electronic signatures
– Requires affirmative “opt-in” by parties -- but optin may be shown by surrounding circumstances
The UETA
• Problems with the UETA
– Must be adopted by each state
– Process can take years
– States add non-uniform provisions
– California
– Doesn’t change federal law
The Federal ESIGN Act
• A federal solution -- the Electronic Signature In
Global and National Commerce Act
– Covers state and federal law
– Instant 50 state baseline uniformity
– Adopts the most significant UETA provisions
– Provides specific standards for consumer consent
– Sets boundaries for regulatory authority
Scope of the UETA and ESIGN
•
•
Applies to the use of electronic records and signatures in virtually any business-tobusiness or consumer transaction, unless specifically excluded
– UETA applies to state law
– ESIGN applies to state and federal law
Primary exclusions:
– Wills, codicils and testamentary trusts
– Funds transfers (covered by UCC Article 4A)
– Letter of Credit (covered by UCC Revised Article 5)
– Securities (covered by UCC Revised Article 8)
– Security interests in goods and intangibles (covered by UCC Revised Article 9)
– Software licensing laws (if State has adopted UCITA)
– Most laws concerning checks
Scope of the UETA and ESIGN
• Included are:
– Consumer protection laws
– Laws governing real estate transactions (subject to special
rules concerning documents to be filed of record)
– Laws governing Insurance
– Laws of agency
– Laws covering powers of attorney
– Laws requiring notarization of documents
– Laws governing trusts (except testamentary trusts)
– Laws concerning the submission of documents to, or
issuance of documents by, government authorities (subject
to special rules )
Three Pillars of the UETA and ESIGN
• A record or signature may not be denied legal
effect or enforceability solely because it is in
electronic form
• If a law requires a record to be in writing, an
electronic record satisfies the law
• If a law requires a signature, an electronic
signature satisfies the law
Electronic Records Under
UETA and ESIGN
• “Record” means information that is inscribed
on a tangible medium, or that is stored in an
electronic or other medium and is retrievable
in perceivable form
– All writings are records, but not all records are
writings
– “Electronic Record” is virtually any stored record
that is not on paper
Electronic Signature
• 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”
Electronic Signature
• Includes:
– traditional ink signatures
– typed names
– a click-through on a software program’s dialog box
combined with some other identification procedure
– biometric measurements
– a digitized picture of a handwritten signature
– a complex, encrypted authentication system
Electronic Signature
• Legal sufficiency vs. attribution
– UETA answers the question “is it a signature?”
– Does NOT answer the question “is it your signature?”
• Attribution must be proven
– May be proven by any means, including surrounding
circumstances or efficacy of agreed-upon security
procedure
– Burden of proof is on person seeking to enforce
signature
– Non-repudiation is a legal condition, not a technology
feature
Electronic Signature
• Intent and authentication
– Signer must intend to “authenticate” a document
at time of signing
– Four basic purposes for authentication
•
•
•
•
I agree to it
It came from me
I’ve seen it
I got it
– Purpose of signature derived from surrounding
circumstances, just as on paper
– Need “indicia of intent,” just as on paper
The Federal ESIGN Act:
Consumer Consent – A Closer Look
• Special procedure required if statute,
regulation or other rule of law calls for a
writing to be provided to a consumer
• Basic rules:
– Consumer must affirmatively consent
– Other party must provide disclosures prior to
consent in clear and conspicuous statement
– Consent must demonstrate ability to receive
documents
The Federal ESIGN Act:
Consumer Consent – A Closer Look
• Clear and conspicuous disclosure of:
– Consumer’s right to have documents provided on
paper
– Consequences of withdrawal of consent
• Fees
• Termination of transaction
– Scope of transaction covered by consent
– Procedure for withdrawing consent and updating
contact info
– Procedure and fees for obtaining paper copies
– Hardware and software requirements for accessing
and retaining records
The Federal ESIGN Act:
Consumer Consent – A Closer Look
• “Reasonable demonstration”
– Consumer consent must
• Be electronic or be confirmed electronically
• Include a “reasonable demonstration” of consumer’s ability to
access information in the electronic form(s) provided
– Legislative history attempts to set standard
• Test is not intended to “burden commerce”
• Email confirming receipt of test files is sufficient
– Failure to include “reasonable demonstration” in consent
process may not be used as basis to invalidate contract
– Query: How to handle transactions where consumer gets
paper but business retains electronic records?
Key Requirements
• Key Requirements
– Consent is required if law otherwise requires info delivered in writing
 ESIGN Consumer Consent Process
 B-to-B Consent
– UETA delivery provisions not preempted by ESIGN
 Need Agreement (express or implied) on Delivery Method
 Need to deal with bouncebacks in many cases
– Popular Delivery Options
 Display as part of an interactive session,
 Delivery in the body of an email or as an email attachment, or
 Delivery of an email or other electronic notice that has a URL
embedded in it that the consumer may activate to review the
information.
Key Requirements
• More Key Requirements
• Electronic records are not enforceable against a recipient if the
sender inhibits the recipient’s ability to print or retain a copy
• Recipient must be able to retain a copy for later reference
• Electronic Records retained by sender must be accurate, remain
accessible for later reference
• U.S. Mail delivery requirements in law or contract “trump” ESIGN,
and may prevent use of electronic records
• All formatting, timing and display requirements must be observed.
“Timing” includes:
• Proper sequence within transaction
• Any time frames or deadlines for delivery
• Length of time the information/document remains accessible