Conducting Business in a Technological World: e-Contracts and e-Signatures

The legal implications of electronic signatures have drawn public and legal attention as more parties contract over the Internet, agreeing to terms with the single click of a mouse.

In 2000 Congress passed the Electronic Signatures in Global and International Commerce Act (ESGICA), under Title 15 U.S.C. Chapter 96 (sections 7001-7031), which made electronic signatures as binding as traditional signatures. By making “e-signatures” legally equivalent to paper signatures, ESGICA introduced a new mode of conducting business – the “e-contract.” California, along with 46 other states, has adopted the Uniform Electronic Transactions Act, under California Civil Code ยงยง 1633.11-1633.17, which governs state law surrounding electronic contracts.

An electronic contract, often called an “e-contract,” exists entirely in electronic form. Parties create and sign the agreement online, without the need to produce hard copies. For example, two parties may correspond over email to create the terms of an agreement and sign the contract after finalization.

There are various complex ways to sign an e-contract. However, commonly parties indicate agreement in e-contracts by typing in their name or adding a scanned signature to the document. In fact, there are computer applications, such as Adobe Acrobat, which enable users to create and use digital and certificate signatures. An e-contract can also be a “click-to-agree” or “click wrap” contract, where users click a box to indicate that they agree to the specified terms and conditions. Software companies use click wrap contracts most often to facilitate agreements before providing downloads to consumers.

The option to coordinate business agreements entirely electronically also substantially saves operation costs–savings that can be passed on to consumers. However, consumers who are wary of conducting business agreements electronically still maintain the option to forgo e-contracts and e-signatures. ESGICA protects consumers’ right to request paper contracts and form traditional contracts. Consumers who are not technologically inclined may be subject to the additional cost of printed (i.e., hard copy) contracts.

The federal government has also made advancements towards electronic contracting. Now, certain federal processes, such as IRS tax filing , can be conducted entirely online. Nonetheless, there are certain contracts that must still be conducted through printed contracts. For example, wills, trusts, documents related to family law, court notices and orders, and documents required to transport hazardous waste cannot be e-contracts.

At the Law Offices of Salar Atrizadeh, we guide California consumers and businesses in matters related to the Internet and Cyberspace by using legal knowledge and skills to create solutions for our clients. Please contact us today online or at (310) 694-3034 to set up a confidential consultation.