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Electronic Signatures
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9/30/2014 at 3:24:06 PM GMT
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Electronic Signatures

Law Firm and Client Use of Electronic Signatures

A growing area of interest for law firms and their clients involves the use of electronic signatures to form contracts, such as engagement, non-disclosure, or Web site “terms of use” agreements. Federal legislation defines “electronic signature” broadly, as does common law, to include any “electronic sound, symbol or process” that signifies a person’s intent to sign a document. 

Like digital storage, electronic signature software has the potential to dramatically streamline operations and reduce waste. Care must be taken, however, when using electronic signatures, to avoid compromising, deleting, or destroying sensitive data or documents and to avoid violating government regulations. Likewise, the parties must employ safeguards that will prevent e-signers from engaging in identity fraud.

There are many types of electronic signatures, and even more companies offering them. Most commercial websites are content with a typed name, address, credit card number and one click on a confirmation button. Some entities, including the IRS, require a PIN (personal identification number) or password that, when used, constitutes an electronic signature. Some clients prefer to use a tablet that is attached to a computer. The consumer signs the tablet with a special pen, or stylus, and the software’s cryptography "locks" the signature onto the document. Less frequently, firms are using voice signature software, which allows the signer to speak into a microphone (such as the one contained in every cellular phone) to say, “I, John Smith, sign this document.” Finally, with improvements in videoconferencing, particularly important signature ceremonies are being videotaped, allowing both an extra level of security and a chance for tech-savvy firms to impress their clients with video technology.

With respect to electronic signature laws, attorneys should be aware of at least the following legislation: Virginia’s Uniform Electronic Transactions Act (UETA), Va. Code §§ 59.1-479, et seq., and the federal Electronic Signatures in Global and National Commerce Act (ESIGN), 15 U.S.C. § 7001, et seq. Under Virginia’s version of the UETA, no record or signature may be denied legal effect or enforceability solely because it is in electronic form, nor may a contract be denied legal effect or enforceability solely because an electronic record was used in its formation.

Beware: In Virginia, as in most states, certain documents must be signed in hard copy form. Specifically, wills, codicils, testamentary trusts, negotiable instruments, bank deposits and collections, funds transfers, bulk transfers, warehouse receipts, bills of lading, investment securities, and secured transactions, and certain other documents are excluded from the UETA.

Nichole Vanderslice founded a small business boutique firm in Richmond, The Law Firm of Nichole Buck Vanderslice, PLLC, after gaining 15 years of criminal and civil litigation experience in state and federal courts. She spent two years as a law clerk in the U.S. District Court for the Eastern District of Virginia, and over nearly 10 years at Christian & Barton in Richmond, she developed a civil practice focused on employment, patent infringement and general commercial litigation.

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