LAW OFFICE OF ELIAS M. GORDAN - Are electronic documents legally binding?

<body topmargin=0 leftmargin=0 marginheight=0 marginwidth=0> <table cellpadding=0 cellspacing=0 border=0 height="100%"><tr> <td valign="top" width=175 BGCOLOR="#A6CAF0" TEXT="#080000"> <div> <B> <TABLE BORDER="0" CELLPADDING="2" CELLSPACING="1" WIDTH="132" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" ALIGN="BOTTOM" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 35 ><NOBR><div> <IMG BORDER="0" SRC="1x1.gif" HEIGHT="29" ALIGN="BOTTOM" HSPACE="0" VSPACE="0" WIDTH="21"></div> </NOBR></tD> <tD VALIGN=TOP><NOBR><div> <IMG BORDER="0" SRC="1x1.gif" HEIGHT="29" ALIGN="BOTTOM" HSPACE="0" VSPACE="0" WIDTH="21"></div> </NOBR></tD> <tD VALIGN=TOP WIDTH="20"><IMG BORDER="0" SRC="1x1.gif" HEIGHT="35" ALIGN="bottom" WIDTH="20" HSPACE="0" VSPACE="0"></tD> <tD VALIGN=TOP><NOBR><div> <A HREF="our_legal_information.htm" TARGET="_top" TITLE="LAW OFFICE OF ELIAS M. 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Gordan</B></div> <div> <B>ELECTRONIC DOCUMENTS AND DIGITAL SIGNATURES - I</B></div> <bR> <div>         Electronic communications and the Internet are transforming the way that business is being transacted, whether across the street or across the world.  Two major questions hindering the growth of electronic commerce have been</div> <div> - Are electronic documents legally binding?</div> <div> - How do I know an electronic document has not been forged or altered?</div> <div>         Recent new laws at the State and Federal levels are attempting to answer these questions.</div> <bR> <div> <B>Are electronic documents legally binding?</B>  In the past, the answer was often “No”, because many laws and agreements required a “signed writing”.  Historically, a signature on a document served to record a transaction, and indicate the signer’s approval of the transaction, as well as the signer’s willingness to be legally bound by it.  No physical signature, no “signed writing”, no legal effect.  The Federal “E-SIGN” (Electronic Signatures in Global and National Commerce) Act, the Illinois Electronic Commerce Security Act (5 ILCS 175) and the Uniform Electronic Transactions Act (adopted by Indiana as Indiana Code 26-2-8, also adopted by 21 other States in various forms) have changed the law, to allow many electronic documents to be legally binding.  How do they work?</div> <div> 1) E-SIGN merely states that a signature, contract, or record may not be denied legal effect solely because it is in electronic form, or because an electronic signature or electronic record was used.</div> <div> 2) The Indiana Act says the same thing as E-SIGN, but only applies if the parties to the transaction agree to transact their business electronically, as determined from the circumstances surrounding the transaction.  The Indiana Act also allows an electronic signature to meet the requirements for a legal “signature”, whether the electronic signature is a sound, a symbol, or a process such as a mathematical code.  The legal effect of the electronic signature will depend on the circumstances.</div> <div> 3) The Illinois Act gives special legal status to “secure electronic records” and “secure electronic signatures”.  “Secure electronic records” show that an electronic record has not been altered, while “secure electronic signatures” show that an electronic signature belongs to a specific person.  (More on this later).  Both are presumed to be genuine, with the burden on the party, opposing the secure electronic record or signature, to prove it false.</div> <div>         Both the Illinois and Indiana Acts allow the parties considerable freedom, to define how and when electronic records and electronic signatures will be accepted as genuine.  Without clear contract terms regarding electronic records and electronic signatures, problems can result in contracts between parties from different States, because each State’s law may be different, and the E-SIGN Act does not specify how the differences in State laws are to be resolved.  If the parties to a contract do not address these issues, a court may have to address the issues for them in the event of a dispute.</div> <bR> <DIV ALIGN="LEFT"></DIV> <div> <B>RESOURCES</B></div> <div> <FONT SIZE="3" COLOR="#000000" FACE="Times New Roman" >1).  ABA “Digital Signature Guidelines”,</FONT> <A HREF="http://www.abanet.org/scitech/ec/isc/dsgfree.html" TARGET="_top" TITLE="http://www.abanet.org/scitech/ec/isc/dsg"><U><B>http://www.abanet.org/scitech/ec/isc/dsgfree.html</B></U></A></div> <div> 2). Uniform Electronic Transactions Act (UETA), on the Penn Law Library Website, <FONT SIZE="3" COLOR="#0000BF" FACE="Times New Roman" ><A HREF="http://www.law.upenn.edu/bll/" TARGET="_top" TITLE="http://www.law.upenn.edu/bll/"><U><B>http://www.law.upenn.edu/bll/ulc/ulc_final.htm#ueta</B></U></A></FONT><B> . </B>Go to <B>NCCUSL</B> (National Conference of Commissioners on Uniform State Laws) on the Website.</div> <div> 3).  Illinois Electronic Commerce Security Act,  5 ILCS 175, available from <FONT SIZE="3" COLOR="#0000BF" FACE="Times New Roman" ><A HREF="http://www.legis.state.il.us" TARGET="_top" TITLE="http://www.legis.state.il.us"><U><B>http://www.legis.state.il.us</B></U></A></FONT><B>  </B>.  Go to <B>Illinois Compiled Statutes</B> on the Website, then go to <B>Chapter 5</B>, then to <B>5 ILCS 175/</B>.  There is no direct link available.</div> <div> 4).  Indiana Uniform Electronic Transactions Act,</div> <div> <A HREF="http://www.state.in.us/legislative/bills/2000/HE/HE1395.1.html" TARGET="_top" TITLE="http://www.state.in.us/legislative/bills"><U><B>http://www.state.in.us/legislative/bills/2000/HE/HE1395.1.html</B></U></A></div> <div> 5).  E-SIGN, Public Law 106-229, available through <FONT SIZE="3" COLOR="#0000BF" FACE="Times New Roman" ><A HREF="http://www.loc.gov" TARGET="_top" TITLE="http://www.loc.gov"><U><B>http://thomas.loc.gov</B></U></A></FONT> .</div> <bR> <DIV ALIGN="LEFT"></DIV> <div> <B>Law Office of Elias M. Gordan, </B><FONT SIZE="3" COLOR="#0000BF" FACE="Times New Roman" ><A HREF="http://www.gordanlaw.com" TARGET="_top" TITLE="http://www.gordanlaw.com"><U><B>http://www.gordanlaw.com</B></U></A></FONT><B> </B></div> <div> <B>Post Office Box 60, Palos Park, IL, 60464   </B><FONT SIZE="3" COLOR="#0000BF" FACE="Times New Roman" ><A HREF="mailto:gordanlaw@att.net" TARGET="_top" TITLE="mailto:gordanlaw@att.net"><U><B>email gordanlaw@att.net</B></U></A></FONT></div> <bR> <div> <A HREF="our_legal_information.htm" TARGET="_top" TITLE="LAW OFFICE OF ELIAS M. GORDAN Legal Inf"><U><B>BACK TO LEGAL INFORMATION PAGE</B></U></A></div> </td> </tr></table></body>