Electronic Signature Policy

Summary

This electronic signature policy sets forth guidelines for a company to allow its employees to substitute an electronic signature (e-signature) on agreements instead of a manual (handwritten) signature to the extent permitted by applicable law. The policy is jurisdiction and industry neutral. This template includes practical guidance and drafting notes. Electronic signatures serve to facilitate more secure and expeditious document signing. Pursuant to the United States Electronic Signatures in Global and National Commerce (ESIGN) Act of 2000 (15 USC §§ 7001-7006), a contract or signature "may not be denied legal effect, validity, or enforceability solely because it is in electronic form." There are a few exceptions, however, that must be signed manually, including: (1) wills, testamentary trusts, and codicils; (2) agreements governed by laws respecting adoption, divorce, or other family law matters; (3) agreements governed by the UCC, except those governed by any of the following sections: (a) Sections 2-209 and 2-601 et. seq. (Waiver or Repudiation of Claim or Right After Breach of Contract), (b) Article 2 (Sale of Goods), and (c) Article 2A (Leases); (4) any of the following notices: (a) a notice of cancellation or termination of a utility service; (b) a notice of default, acceleration, repossession, foreclosure, or eviction under a credit agreement or a rental agreement secured by an individual's primary residence; (c) a notice of cancellation or termination of either health or life insurance or benefits; and (d) a notice respecting a product's recall or material failure that risks the health or safety of others; (5) court orders or notices, or official court proceeding–related documents; and (6) agreements respecting the transportation or handling of hazardous materials, pesticides, or other dangerous materials. The state law counterpart to the ESIGN Act is the Uniform Electronic Transaction Act (UETA) has been adopted by 49 states to date and makes the ESIGN Act applicable to electronic transactions and electronic signatures governed by state law. Even though New York has not adopted the UETA, its laws on the topic are quite similar. The UETA defines an electronic signature as "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." See UETA § 2(8). Both the ESIGN Act and UETA treat e-signatures the same as manual ones. This policy is intended for use solely for domestic transactions, as cross-border transactions may require compliance with additional laws and regulations that are beyond the scope of this document. For more information on contract signature requirements, see Enforceable Contract Signature Requirements. For information on electronic transactions, see Contract Terms and the UCC and Electronic Contracts. To compare state laws on electronic signatures, see the Electronic Transactions and Recording State Law Comparison Tool.