How To Understand Laws Dealing with an Electronic Signature

In the advent of technology, we begin to immerse ourselves in a digital world. Various transactions are now being done digitally even without the personal presence of parties involved. Security and trust is vital to any business transaction. As e-commerce is rapidly growing for companies and small medium enterprises, the use of electronic signature is also slowly gaining popularity.

A signature indicates that the person who signed a particular document understands and accepts the terms and conditions on a specific contract. Just like your signature above, an online signature is a symbol used by a party to authenticate an online or electronic message or agreement. It is vital that a specific symbol must be related to that individual signing, that there is an intention to sign, that the data is not being tampered and both parties are given their own copies of the agreement. One type of electronic signature is digital signature. To authenticate various messages, this type relies on encryption.

An electronic signature shouldn't be mistaken with what they call a "digital certificate." A digital certificate is like an electronic card where your credentials are being established. You can use them when doing business transactions on the Web. It contains information such as a serial number, name of the person, expiration dates, a digital signature and a certification authority's seal.

Electronic signatures can be used for online banking and e-government programs and applications such as an e-card for public amenities and services. A lot of businesses around the world save money and time by using document solutions and electronic signature instead of paper processes and documentations. Nowadays, you can get any electronic signature software and signature pad at a local computer shop near you. This pad will be used for signature capture, authentication, binding and verification of documents, word, etc.
Here are some laws that regulate the use of electronic signatures:

  • "E-sign" or the Electronic Signature in National and Global Commerce Act - This was signed by President Clinton making online contracts and agreements as legal and as binding as paper contracts. Electronic signatures are now considered legal signatures.
  • Uniform Electronic Transactions Act (more commonly known as UETA) - This was developed in order to avoid conflicts in every American State regarding their own electronic law.
  • Electronic Communications Act of 2000 and the Electronic Signatures Regulations Act of 2002 - These laws are made to incorporate provisions of the EU Electronic Signatures Directive into their UK Law.
  • Utah Digital Signature Act of 1995 - This law became one of the frontiers in regulating electronic transactions.
  • Health Insurance Portability and Accountability Act or HIPAA - This protects an individual's privacy regarding health information.
  • 21 CFR Part 11 - This guides the adoption of electronic records and signatures in the field of pharmaceuticals, medical devices, biotechnology, radiological health, cosmetics, food and even in veterinary medicine.

It is important to note that not all legal transactions can make use of electronic signatures. There are some transactions, which do not accept the validity of an electronic signature such as adoption, wills, court orders, divorce, etc.


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