The IRS reports that last year nearly 90 million (around 58%) of US tax returns were submitted electronically, using the IRS approved PIN-based signatures. These simple electronic signatures show the increasing comfort of the American public with use of electronic signatures on extremely important legal documents.
Also – Silanis had a recent webcast where Patrick Hatfield of Locke Lord Bissell and Liddell, LLP presented on recent case law around use of electronic signatures. You can download the presentation from Silanis or get a PDF summary from Locke Lord Bissell and Liddell. The gist of it is: Make sure that the intent is confirmed, i.e. make it very clear that the signer is aware of the affirmative action of the electronic “I agree.” The courts will enforce the signature like any other, even in insurance recission cases!
An interesting point made by Patrick in the presentation: there are still no cases where the purported signer has denied that he signed the contract. Does this mean that we are spending too many calories worrying about signer authentication?
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Signer authentication has always been the biggest stumbling block for wide adoption, with PKI being the first attempt at creating more complexity than is needed and stunting the industry until the 2000 US E-Sign Act removed that hurdle by not mandating technical standards, a very wise decision that has allowed electronic signature use to spread pretty wide, even if adoption is still rather light overall.
While there’s nothing wrong with strong authentication for signing, that’s why we have notarized handwritten signatures today. But most signings are not notarized. Banks pretty much don’t check the handwriting for a match on their checks or credit card receipts either. How many business documents are followed-up with physical ID checks, and just about no business attempts to maintain a file of handwritten signatures and then compare hoping to detect forgeries.
If you receive a faxed document, or a signed paper document in the mail, you have no real authentication about the signature (and often no proof that the signer is authorized to sign), yet this is commonly used in business today because there are other business processes that ensure you’re not defrauded — you don’t rely on the signature itself to prevent fraud, only show that some authorization has taken place.