eSignature Legality in The United States

E-Signature Legality Summary

The United States has a two-tier model, with a federal law, ESIGN, 49 states and Washington, D.C. and Puerto Rico having their own variable versions of the UETA and New York having a law similar to UETA. ESIGN and UETA only apply to electronic records and signatures that are related to a transaction.

Under ESIGN, a “transaction” is an action or set of actions relating to the conduct of business, consumer, or commercial affairs between two or more persons, including any of the following types of conduct—(A) the sale, lease, exchange, licensing, or other disposition of (i) personal property, including goods and intangibles, (ii) services, and (iii) any combination thereof; and (B) the sale, lease, change, or other disposition of any interest in real property, or any combination thereof. A “person” is an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, governmental agency, public corporation, or any other legal or commercial entity.

Under UETA, a “transaction” is an action or set of actions occurring between two or more persons relating to the conduct of business, commercial, or governmental affairs. A “person” is an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, governmental agency, public corporation, or any other legal or commercial entity.

Types of Electronic Signature

ESIGN and UETA define an electronic signature as “any 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.”

Documents That May be Signed Electronically

The following transaction types generally are eligible for the use of electronic signatures:

• HR
• NDAs
• Software Licensing
• Education
• Life Sciences
• Technology sector
• Consumer Transactions (excluding certain post-default notices and excluding non-uniform exemptions in California’s UETA).

Further Guidance

While the use of electronic signatures is not prohibited for the following transaction types, caution should be exercised before using electronic signatures. Below are some examples of transaction categories that may require further assessment before proceeding:

• Corporate Resolutions
• Procurement
• Bills of Lading
• Healthcare
• Records related to FDA Clinical Trials
• Banking
• Wire Transfer Agreements
• Lending
• Real Estate
• Chattel Paper
• Insurance
• Documents to Notarized
• Documents to be Recorded
• Government Filings

An electronic signature cannot be denied legal effect, validity, or enforceability solely because it is in electronic form. With that said, if the validity of the electronic signature is challenged, the party seeking to enforce the electronic signature must (i) demonstrate that the signer intended to sign the electronic record; (ii) attribute the electronic signature to the signer (which may be accomplished by any means); (iii) ensure that the electronic signature is attached to, or logically associated with, the record being signed; (iv) the signer must be permitted to retain a copy of the signed record; and (v) the signed record must be maintained in a secure manner that preserves its integrity.

Case Law

The following six cases are examples of where U.S. courts have addressed the use of electronic signatures:

• Simon et al. v. Blue Cross of California, 2019 WL 5677552 (Ct. App. Cal. 2nd Div. Nov. 1, 2019);
• Espejo v. S. Cal. Permanente Med. Grp., No. BC562377 (Cal. App. Apr. 22, 2016);
• Moton v. Maplebear, Inc., 2016 WL 616343 (S.D.N.Y Feb. 9, 2016);
• Harpham v. Big Moose Inspection, No. 321970, 2015 WL 5945842 (Mich. App. Oct 13, 2015);
• Yearwood v. Dolgencorp, No. 6:15-cv-00898-LSC, 2015 U.S. Dist. LEXIS 138993 (N.D. Ala. Oct. 13, 2015); and
• Zulkiewski v. General American, 2012 WL 2126068 (Mich. Ct. App. 2012).