John Hancock Goes Digital.

• Author: Glover, K. Daniel
• Position: Electronic Signatures in Global and National Commerce Act

The new law permitting electronic signatures may one day transform the way documents and reports are approved. For now, proponents are trying to spread the word and set up the infrastructure.

If the digital zealots of the world are right, Oct. 1, 2000 marked the beginning of a revolution. That is the day John Hancock, one of the heroes of another great revolution, became passe. The insurance industry considered that day a "major milestone in e-commerce," and bankers hailed the beginning of "a new era." Even Wall Street, which had little to celebrate during the dot-com downturn of 2000, had visions of a brighter investment millennium.

So what made the date so special? The Electronic Signatures in Global and National Commerce Act, otherwise known as the E-SIGN Act, took effect. Congress passed the bill nearly unanimously last year, and President Clinton signed it into law last June 30. Now, say the law's advocates, the world just has to wait for businesses and consumers to realize how convenient and cost-efficient e-signing can be, and it will become as commonplace as e-mail.

In a nutshell, the new law gives electronic signatures the same legal weight as the traditional ink-on-paper variety. It defines an e-signature as any "electronic sound, symbol or process attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record." The statute does not, however, require any business or individual to use e-signatures or even to accept them from others.

Business interests actually wanted broader language than the law contains -- the right to provide loan terms electronically if people preferred that, for instance, and the right to pre-empt state laws requiring companies to keep original paper records of transactions. But E-SIGN proponents ultimately accepted narrower language because of lawmakers' concerns about the potential for consumer fraud.

People familiar with e-signature technology cite the law's multiple business benefits. It allows completion of an entire transaction -- with customers or, more likely in the short term, with other businesses -- without leaving the office. Companies can save money on paperwork, filing space, travel costs and more.

Bruce Underwood, the chief information officer at Lease Point.com, which serves as a middleman for technology equipment leases, says companies "can reduce costs with their people, courier costs, printing and postage costs."

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