ABA Family Legal Guide

Computer Law

Online Purchases

How do you "sign" a contract electronically?

These days, an increasing number of businesses are engaging in electronic commerce to enable them to reach more consumers while cutting down on their paperwork and advertising costs. These companies are striking deals with consumers and other businesses via the Internet or online services. That usually means no face-to-face contact, no paper contract, no ink or "wet" or handwritten signature. And it might also mean confusion down the line about whether a contract has actually been made and what exactly has been agreed to. The general trend is to use technology to verify the identities of the parties and permit them to decide on acceptable electronic signing technologies. This is an evolving area of law, and your lawyer can help guide you through the shoals.

A federal law, the Electronic Signatures in Global and National Commerce Act (E-SIGN) of 2000, gives electronic signatures the same legal validity that handwritten signatures on paper would have. The law permits consumers to sign a mortgage or insurance contract online, as well as perform other tasks, such as opening a brokerage account.

The law ensures that a contract or signature will not be denied legal status simply because it is electronic. A provision of the E-SIGN law specifies that retaining an electronic copy that can be printed or otherwise accessed is sufficient to meet legal requirements.