Legal importance of digital signatures
A cornerstone of United States contract law is the general application of the Statute of Fraud to contractual arrangements. Emerging forms of electronic commerce and new types of contractual relationships have begun to challenge the very idea of defining the four corners of a contract. Many obstacles related to contractual relationships arise with the proliferation of electronic commerce, especially in determining what constitutes a valid signature. Traditionally, the Statute of Fraud is a collective term that describes various legal provisions that deny the performance of certain forms of contracts unless they are reduced in writing and signed by the accused party. The problem with this traditional idea of the Statute of Fraud is how it relates to electronic commerce to determine whether the defendant to the contract has actually “signed” the contract for performance purposes.
Various forms of legislation dealing with Internet law have attempted to define and describe digital and electronic signatures in order to determine applicability. Generally, there are two broad categories of signatures when it comes to electronic contracts.
- Electronic signatures (“Electronic signatures”)
- Digital signatures
I. Electronic signatures
The Uniform Electronic Transactions Act (UETA) defines electronic signature as “a sound, symbol, or electronic process attached to or associated with an electronic record and executed or adopted by a person with the intention of signing the record.” UETA, §2. Often referred to as ‘click-wrap’ agreements, these forms of electronic signatures receive a broad presumption of enforceability through acts such as UETA and the Electronic Signatures in National and Global Commerce Act (ESGNCA / “E-Sign”). These laws make it clear that binding contracts can be created by exchanging email or simply by clicking “yes” on those click license agreements that we have all agreed to with all types of Internet transactions. Like the UETA, the ESGNCA requires that consumers give affirmative consent to click agreements and that the provider must provide the consumer with a clear and conspicuous statement about the effect of agreeing to click, but probation rarely It is allowed to prove or disprove intention to contract. ESGNCA§101 (c) 1. Simply clicking “I agree” presumes the intention.
The widespread applicability of electronic signatures is also recognized as fully valid for liability protection purposes by the Digital Millennium Copyright Act. DMCA §512 (3) (A) (i). As a relatively established area of Internet law, it is important to understand the applicability of electronic signatures, whether or not the intent is stated in the agreement itself. Since these click-fit agreements are presumptively enforceable, it is important to inform your clients of potential obstacles in agreeing to the terms of an online transaction without fully understanding what they are agreeing to. Simply accepting these terms may interfere with your client’s right to the court system for dispute resolution, as click arbitration clauses are also generally enforceable. Your clients will not be able to rely on the Statute of Fraud to demonstrate that there was no intention to contract. With electronic signatures, intent is an objective standard, usually determined by the simple click of a mouse.
II. Digital signatures
Unlike electronic signatures, digital signatures are more often used as a means of demonstrating affirmative intent. Problems with digital signatures do not stem from an inadvertent agreement to terms, but rather from the security and confidentiality of digital signatures. Generally speaking, digital signatures are encrypted electronic signatures that a third party (often called a certificate authority) authenticates as genuine. Unlike the more general electronic signature, a digital signature must be uniquely and strictly in the exclusive custody of the party that uses it. Unlike electronic signatures, where a typed name, company name, or even a logo can force the party to charge for its mere presence, digital signatures offer the contracting party higher levels of security and efficiency. The general types of signatures will not be required as a digital signature. Due to the authentication requirements of a digital signature, it should be recommended that customers rely on the use of digital signatures for any high-profile or liability electronic contracts.
The use of the digital signature will only increase in the future, as the parties to all transactions will seek a higher level of information security without the fear of accidentally accepting unfavorable terms. While there is an inherent fear of paperless transactions, especially with more traditional lawyers and companies, the use of digital signatures makes trading faster, safer and more effective and should be recommended to clients where appropriate. The use of digital signatures is even more effective when it comes to international trade, so it is no longer necessary to travel abroad to demonstrate the intention to sign a contract.
While it is important to zealously understand and advise clients on the use of various forms of signatures for e-commerce, it is also imperative to understand that we are still in the early years of a technology revolution and that part of being an effective advocate is staying current. day. to date on advances in the law. Electronic and digital signatures are just the beginning. Advances in technology will soon allow for the widespread use of biometric identification as a means of demonstrating intent to hire. The principles of contract law will continue to evolve with technology and, while the application of contract principles and the Statute of Fraud will not change substantially, their interpretation and use surely will.