What is the E-sign Act?

The Electronic Signatures in Global and National Commerce Act (E-sign Act) enables businesses and individuals to sign contracts and documents digitally. The E-sign removes the need to sign a paper contract for the agreement to be enforceable. E-sign is officially known as The Electronic Signatures in Global and National Commerce Act.

How Does the E-Sign Act Work?

The E-sign Act was signed into law by President Bill Clinton in June of 2000. It has been in effect since that time. Prior to passage of the E-sign Act, many business were reluctant to handle online transactions over concerns about the legitimacy or legal enforceability of such contracts. The E-sign Act confirmed that individuals can sue each other in the event of breach or noncompliance with the terms of electronically-executed contracts. The E-sign Act avoided negative consequences associated with the inconsistencies between state laws. Many states have their own regulations for electronic signature. Many states have adopted the Uniform Electronic Transactions Act (UETA) in whole or part. The E-Sign Act exempts the following types of legal documents from coverage: Wills, and trusts Adoption paperwork Decree relating to divorce etc. Some Articles of the Uniform Commercial Code Judicial orders and notices Official court documents Termination notices to utility services. As such, state law solely controls electronic signatures on these documents.

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