Step Away From the Paper – Electronic Signatures in Commercial Agreements - Linden Legal Strategies |Business Attorneys For the New Economy

When I started Linden Legal Strategies, I couldn’t wait to build a paperless office from the ground up. Our files are paperless. Our correspondence is paperless. And even our engagement letters are paperless. Administratively, it’s easier on us and our clients prefer it.  In fact, more and more, clients and customers are expecting paperless transactions, but yet – in our paper dependent world – as business owners we’re reluctant to take the plunge.

Electronic Signatures

For the most part, gone are the days that documents had to be signed in person, with blue ink and in triplicate so everyone had an original. Convenience, technology and environmental concerns have replaced filing cabinets with gigabytes of cloud-based storage. Widespread adoption of the Uniform Electronic Transaction Act (which Virginia adopted in 2000), means that electronic signatures are legal in almost every state.

What’s holding most businesses back?  Frankly, the unknown. Paper is familiar, but electronic signatures, well, they don’t feel as familiar or formal. And, despite the fact that we use them almost daily in routine consumer transactions, there is still widespread misconception that electronic signatures aren’t enforceable. In an effort to help ease some of these concerns, below you’ll find general answers to the more popular questions about electronic signatures.

What is an Electronic Signature?

An electronic signature is “an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.” Va. Code Ann. § 59.1-480(8). Broadly, it can be any sound, symbol or process that signifies your intent to sign a document. For example, you could type or write your name on an electronic form, you could use your thumbprint as a biometric signature on your phone, or you could click through agreement language on a website to access a service.  These are all examples of electronic signatures, and based on the situation, all are valid.

When can You Use Electronic Signatures?

Businesses can use electronic signature for most general business transactions, including service agreements, online sales, employment contracts. There are exceptions though (for example, certain UCC transactions, securities, wills and trusts).  The method you use, however, must be unique to the signer and capable of verification.

Both Parties Must Consent

Both parties must consent to using electronic signatures. They can do so explicitly (i.e., a conspicuous clause in the contract allows for electronic signatures) or implicitly (i.e., the surrounding circumstances indicate the party intends to do business electronically – such as accessing a website). And, if a party doesn’t consent to using electronic signatures, you need to provide a way for them transact business offline.

Keep a Record of the Signature

Just like with paper documents, you need to make sure you have a copy of the signed document and provide a copy to the other party. Should you ever need to enforce the document, you’ll need to show that the document and signature are accurately reproduced, that the document wasn’t changed after the fact, that the signature is attached to the agreement and that the signer had the ability to store or access the document.

Ready to Get Started?

If you’re ready to explore how electronic signatures can streamline your operations, make transactions easier on your clients and reduce the amount of paper your business consumes, then let’s schedule a Strategy Session. Used correctly, electronic signatures can be transformational for your business and provide a superior client experience. Feel free to contact us anytime.

 

This article is for informational purposes only and does not constitute legal advice nor does it create an attorney-client relationship.  Always consult appropriate legal counsel for specific questions related to your business. Some states may consider this attorney advertising.

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Stinson Mundy is the founder of Linden Legal Strategies PLLC, a Richmond, Virginia-based law firm focusing on small business law and development. To learn more about how we can help you start, grow and protect your business, or to schedule an initial consultation, click here.

2 thoughts on “Step Away From the Paper – Electronic Signatures in Commercial Agreements”

  1. The good things about our electronic signatures are that despite of where you are you can check your documents and eventually simplify a lot of tasks helping you in lowering the cost of operations even lower than the normal self.

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