What’s Stopping the Wider Use of Electronic Forms?
It was 13 years ago when the U.S. Congress passed into law the Electronic Signatures in Global and International Commerce Act, which, in a few swipes of (ink) pens, made it legal to use digital forms and signatures in many business situations. Congress, in that sweeping legislation from 2000, declared that signatures, contracts and other records couldn’t be declared illegal if they were created electronically. The goal was to encourage the wider use of electronic forms.
But Congress explicitly excluded large patches of areas that still require paper and an ink signature. The list includes documents associated with:
- court proceedings, such as briefs, pleadings and court orders
- the cancellation of utility services or insurance plans
- the ownership or rental of a home
- product recalls
- the transportation or handling of hazardous materials
This list of exclusions is not long, but it’s not intuitive. Knowing when an electronic form is permitted in many cases still requires research. In some cases, the only way to know if an electronic form is legally acceptable is to ask a lawyer. An alternative is to use Internet search — Are electronic wills legal? — and sift through the results, although that method is hardly definitive.
Congress also built in a consumer protection feature that makes going electronic more cumbersome. Businesses that want to replace billing statements and other legally required paper documents with electronic documents have to get the consent of consumers. This clause triggered its own, lengthy policy document from the Federal Trade Commission. The bottom line: Electronic communications are legal as long as consumers explicitly consent to them.
Although Congress took big steps toward permitting electronic forms, it did not mandate them. The law explicitly allows traditionalists to use paper and ink signatures if they prefer. As a result, a lawyer may insist on paper contracts, signed in ink, not because they are legally required but because that has been this lawyer’s practice for decades.
Little by little, however, digital forms are chipping away at the habitual insistence on paper.
So know this: The majority of printed, paper documents encountered by most of us in our everyday lives — invoices, payments, most contracts, demands, and more — are legal when presented in electronic form. Consent may be required, and it certainly does not hurt to get it regardless, but Congress clearly envisioned a march into electronic forms, and the progress continues.