Electronic Signatures-Esign Origins, Understanding Laws, and the Affects

On June 30, 2000, President Clinton signed the “Electronic Signature in Global and National Commerce Act” (ESIGN) using his electronic signature ID, thus introducing the digital signature technology in foreign and international commerce.

In the four years prior to the enactment of this Act, twelve provinces had enacted the same rules and regulations for the purposes of state-owned enterprises, and in the five years since the Act passed all other provinces had passed similar laws and regulations. What does all of this mean, and how can it ultimately benefit businesses, individuals, and the nation or the world?

The best way to answer such a question is to look at the origins of the law, and to understand the reasons for its passing and the adoption of certain state laws.

Birth of Electronic Signature – Fax

In the 1980’s companies and even some progressive individuals began to use fax machines for greater efficiency or critical delivery of paper documents. Today, the fax machine is the foundation of the business world. Most people do not even think about the first barriers to this new tool, nor do they think about its impact on the speed of communication and the convenience of using it. However at a young age many of the same issues surrounding electronic communication and electronic signatures Cocosign should be resolved when using fax.

When the original contract was signed and faxed it formed the basis for the negotiation of an electronic signature. After all it was the first time someone had signed something, put it on a machine, sent it from one phone line to another and brought a digitally re-signed signature. The way this sign was signed was uncontrollable or traceable, and in most cases it traveled miles of wire before reaching its destination, so how could it be considered a valid signature? The intentions of the signature were clear to everyone, but businesses wanted to know if they could rely on the signature approval, and if no one saw the action of one person or organization how could the business put faith in it? This caused quite a stir and the courts soon ruled that the signature carried the same authenticity as if the parties were standing together. With this, faxing became the standard operating procedure worldwide.

Courts have found legitimacy in this signature process and businesses also feel secure in this way. It is unbelievable that the problems caused by fax machines are too early. Most people did not realize that the original fax paper ink would disappear later and that you would have to make another copy by fax if you wanted to save it permanently. And often the image quality was not good or not very clear, but businesses understand the purpose and will take it as a sign even if there is a signature that is less readable. So you actually had a hard copy of the digital image, and even though there are a lot of gaps in the transformation and fraud of crime the fax is still working and the business is thriving.

The business idea behind this thinking was easily justified. Before the fax machine, the contract could be signed orally between the seller and the client, and otherwise down the road would be signed and mailed. More sales before the fax machine is completed with a simple “OK let’s do it” comment on the phone. This way of getting business and turning the wheels shows a very important point in the world of electronic communication, or therefore in a digital world with no physical or direct communication, many businesses can operate in trust. They provide the service to customers and to customers trusting that they will provide that service satisfactorily, while the service provider trusts that the customer will pay for the services provided.

Trust is not new to business; it was often shown shaking hands or “You have an agreement”, and that was all you needed to make an agreement. Has that changed today? I believe the answer is no, but what about the courts, and their view of the use of an electronic signature? After all the purpose of the courts is not just to keep the wheels rolling and making money, so why did they trust this type of signature and what legal question was answered by this signature? This line of reasoning takes us back to the Electronic Signatures on the International and National Finance Act or more commonly known, the law (“ESIGN”).

Electronic Signatures, Courts and Government

Government Paperwork Elimination Act (“GPEA”), Uniform Electronic Transaction Act (“UETA”), Electronic Code of Federal Regulations (“CFR”), and Electronic Signature in Global and National Commerce Act (” ESIGN “) All are efforts by Congress, government departments and provinces to define debt and the operation of an electronic signature, and to help the courts answer questions related to performance. All these efforts focus on the assurance of three key concepts, integrity and non-alignment.

Proof of authenticity

Proof of authenticity is a sound basis for believing that an electronic file signing business claims to be who they are. This can be accomplished in a number of ways. In the traditional world it can be done by looking at a driver’s license or other form of identification, but in the electronic world this is not always an option, so alternatives should be used.

The most common and popular way to perform this identity test is to use e-mail identifiers. This is a process that many people have experienced at some point while using the Internet. When you sign up for a web-based service you often need to create a username and password. When you create this account many systems will send a confirmation email to the email address you entered for your record, thus proving that you are the owner of this email address.

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