Is Your Electronic Signature Really Valid?

Have you ever wondered whether clicking "I accept” on an online form was really as effective as signing your name on paper? What about digitally signing your name on a screen? Is that the same thing?

For the most part, a digital signature is just as good as paper version.

Since 2000, e-signatures have been the law of the land.  In that year, Congress passed the Electronic Signatures in Global and National Commerce Act (E-SIGN).  15 U.S.C. § 7001 et seq.  E-SIGN provides that “a signature, contract, or other record relating to such transaction may not be denied legal effect, validity, or enforceability solely because it is in electronic form” or because the signature is in electronic form:  15 U.S.C. § 7001(a) and (b).  Moreover, where a statute requires disclosures be made to consumers, electronic acknowledgement of that disclosure is also sufficient. 15 U.S.C. § 7001(c).  In other words, clicking “I accept” is most often as good as signing a paper contract.

If there were any doubt, most states have also adopted the Uniform Electronic Transactions Act that establishes that “a record or signature may not be denied legal effect or enforceability solely because it is in electronic form.”  E.g. Ind. Code § 26-2-9-106.  Likewise, “A contract may not be denied legal effect or enforceability solely because an electronic record was 'used in its formation.”  Id.

For users of ag technology platforms, these laws are a reminder that a simple click of the mouse can be just as effective as signing your name on a paper contract. This means check-boxes should clicked by a farm's owner or manager, not just an employee, for an ag data platform.  Ag technology providers, likewise, should keep a digital record of when and who clicks “accept.” That way, if a dispute arises later, there is no question that the user accepted the contract terms.

It is important to not just keep record of digital signatures, but also to keep record of what was signed. Many companies change their online contracts frequently with updates. Hopefully, they are obtaining updated consent and recording that digital signature, too. If not, they are setting themselves up for problems down the road.

There are exceptions to enforceability of e-signatures, of course.  A contract that waives a person’s rights must be clear and unambiguous—just like a normal written contract requires.  Wills, trusts, deeds and many other legal documents still require heightened formalities for signing, such as another witness or a notary attestation.

But for most online contracts, your e-signature is no different in the eyes of the law as an old fashioned signature on pen and paper.