Electronic and digital signatures

© 2000 by Charles A. Plesums, Austin, Texas

A signature, by law, consists of three parts:

  1. A formal affirmative act by a person,

  2. Understanding of the intent or significance of the act (as specified in the document), and

  3. Creation of evidence of the act (traditionally the mark, seal, or signature on the document).

To summarize: person, intent, and evidence.

Not all business transactions require a signature. Telephone orders have been honored for years. Banks, based only on brief "PINs," transfer funds. Knowledge of an identifier and password (Login) are often sufficient identification to allow computer keystrokes to create a contract, even though we may not have a signature. Even breaking a shrink-wrap is considered a sufficient personal act, intent, and evidence. However, many laws and regulations have explicit reference to "full handwritten", "in ink", "initials", and so forth.

The recent "Electronic Signature in Global and National Commerce Act" redefined a signature as an electronic sound, symbol, or process (evidence), associated with a record (intent), executed by a person with the intent to sign the record (person). Regulatory agencies, which have rules requiring signatures, are making similar changes (although not all regulators are bound by that new law, nor have they made changes to allow electronic signatures yet).

One of the speakers made an important distinction between electronic signatures and digital signatures. By his definitions (the distinction is important, but the terminology is not universal),

Although we don't have a lot of experience with digital signatures, it appears that they are secure and will be widely accepted.

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©2000 by Charles A. Plesums, Austin, Texas USA. ALL RIGHTS RESERVED. You may license additional copies of this document through a nominal royalty payment as specified on www.plesums.com.