Electronic signatures have become a ubiquitous – and yet oftentimes unexamined – part of daily life for most people today. Without being able to accept electronically signed documents, businesses would not be able to function at the speed and efficiency to which consumers have become accustomed.
Legislation like the E-Sign Act and The Uniform Electronic Transactions Act (UETA) have made it possible for consumers to purchase products online, agree to the terms of service on their favorite websites, and enter into binding agreements with counterparties thousands of miles away in mere seconds. From a business perspective, these standards have increased productivity and revenue in innumerable ways.
The Sumerians, in the 5th to 3rd millennia BC, are considered the originators of writing, and these ancient people developed ways of authenticating who made writings. The Sumerians created seals, or intricate works of art carved in clay tablets, to identify ownership. In many civilizations throughout history, people used symbols and other marks to authenticate or acknowledge writings and drawings, and even to accept the contents of documents. The earliest handwritten signatures are traced to the year AD 439, during the rule of Roman Emperor Valentinian III.
Long before e-signatures became the norm, paper signatures were considered to be the gold standard when it came to signing important contracts and documents. Handwritten signatures were a logical extension of fingerprints – a unique seal that could not be duplicated and was therefore an excellent way to ensure authenticity when making agreements on paper.
As society progressed and people began doing business with companies in neighboring cities and states, it became necessary to find other ways to formalize agreements without pen-and-paper signatures. To fill this void, technology companies in the ’80s and ’90s created instruments that let businesses send signed contracts across the globe in seconds. These technologies, now known as fax machines, email, and the World Wide Web, were considered major breakthroughs at the time. However, many people still questioned whether contracts that were signed and shared via fax, email, or internet would hold up in court. To answer these questions, a series of guidelines and regulations would need to be created.
Utah Digital Signature Act, 1995
Although the federal E-Sign Act has attracted the bulk of attention with regard to ensuring the validity of e-signatures and electronic commerce, it was far from groundbreaking. Rather, by the time the E-Sign Act was passed by Congress and signed into law by President Bill Clinton, a number of states had already enacted their own electronic signature regulations.
Utah became a pioneer in this area by passing legislation that sought to minimize incidences of forgery and give legal effect to documents that had been signed electronically. Although Utah was the first state to pass this type of legislation, it was far from the only state to do so. Soon after Utah passed its digital signature act in 1995, similar guidelines were created in California and a handful of other states.
American Bar Association’s Digital Signature Guidelines, 1996
Four years before the E-Sign Act was passed in 2000, the American Bar Association had already produced its own set of digital signature guidelines. These guidelines were intended to help attorneys and other legal professionals determine the quality and authenticity of electronic signatures, while discussing the various challenges and opportunities that digital transactions could provide. By today’s standards, the guidelines may seem rudimentary, however they were considered very forward thinking at the time.
UNCITRAL Model Law on Electronic Commerce, 1996
The United Nations delved into the topic of e-signatures in its Model Law on Electronic Commerce (MLEC) in 1996. The MLEC was developed with the purpose of encouraging e-commerce by providing a series of “internationally acceptable rules.” These rules removed many of the obstacles that had prevented foreign businesses from conducting electronic transactions in the past and ensured that electronic contracts would receive equal treatment to paper contracts going forward.
U.S. Federal Regulations
By 1999, the time had come for the U.S. government to provide some type of federal guidelines and controls on electronic transactions. To do this, Congress put forward the E-Sign Act. Passed in 2000, the guidelines in the E-Sign Act quickly became some of the most recognized and cited e-signature guidelines in the world.
Since 2000, the E-Sign Act has been used as a framework for the e-commerce and e-signature legislation enacted in dozens of other countries. The U.S. guidelines have also largely been shaped by the UETA, which was put together by the National Conference of Commissioners on Uniform State Laws to bring conformity to the various guidelines across the country in 1999.