Move Over John Hancock.

• Author: REICHER, LELAND J.
• Position: Electronic transactions - Brief Article

As technology advances at hyperspeed, businesses are finding endless ways to streamline. Last June, President Clinton signed into law the Electronic Signatures in Global and National Commerce Act, which puts electronic signatures of contracts and other legal documents on the same footing as "wet ink" signatures.

In California, businesses have been subject to, and governed by, the California Electronic Transactions Act since late 1999.

The following is a primer on how to apply the California Electronic Transactions Act. Treatment of the following issues by the California Electronic Transactions Act and the federal E-Signatures Act is almost identical; however, you should consult counsel if your business presents unique issues.

What does the Electronic Transactions Act do? The Electronic Transactions Act provides that an electronic signature has the same valid, binding and legal effect as a handwritten signature. The Act also provides that an electronic document or record has the same valid, binding and legal effect as a paper contract.

What is an electronic signature? The Electronic Transactions Act defines an electronic signature as an electronic sound, symbol or process associated with an electronic record, which is adopted or used by a person with the intent to sign an electronic record. The tone generated on a telephone number pad or use of a personal identification number may be considered an electronic signature. Even typing your name at the end of an e-mail may be deemed an electronic signature. The common identifier of the electronic signature is the user's intent to use the electronic mark or designation to "sign" an electronic record.

What is an electronic record? Any record or document created, generated, sent, communicated, received or stored by electronic means.

Can I use electronic signatures or records in my business? Yes. Generally, the Electronic Transactions Act applies to business and commercial transactions. It specifically exempts the validity of electronic signatures in the creation of wills and other testamentary instruments and also exempts certain commercial transactions and certain other business, financial, health and safety, insurance, public utilities and vehicle-related transactions. If you have any questions about whether or not a particular transaction would be binding with an electronic signature, contact your legal counsel or reference the Electronic Transactions Act at...