Black-letter propositions
- 01
For a transaction in or affecting interstate or foreign commerce, a signature, contract, or other record may not be denied legal effect, validity, or enforceability solely because it is in electronic form.
- 02
A contract relating to such a transaction may not be denied legal effect, validity, or enforceability solely because an electronic signature or electronic record was used in its formation.
- 03
An electronic signature is an electronic sound, symbol, or process attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.
- 04
The statute does not require any person to agree to use or accept electronic records or electronic signatures, apart from a governmental agency with respect to certain records.
- 05
When a law requires that information be given to a consumer in writing, an electronic record satisfies the requirement only if the consumer affirmatively consented and has not withdrawn consent, received a clear and conspicuous statement of the consumer's rights, and consented electronically in a way that reasonably demonstrates access to the electronic form.
- 06
The federal statute does not apply to a contract or record to the extent it is governed by a law on the creation and execution of wills, codicils, or testamentary trusts, or by a state law on adoption, divorce, or other family-law matters.
- 07
The federal statute does not apply to the Uniform Commercial Code other than sections 1-107 and 1-206 and Articles 2 and 2A, so a sale of goods contract falls within it.
- 08
The federal statute does not apply to court orders or official court documents, to notices of cancellation of utility services, to notices of default, acceleration, repossession, foreclosure, or eviction concerning a primary residence, to notices of cancellation of health or life insurance benefits, or to product-recall notices.
- 09
A record retention requirement is met by an electronic record that accurately reflects the information and remains accessible to entitled persons in a form capable of being accurately reproduced for later reference.
- 10
A contract may not be denied legal effect solely because its formation involved an electronic agent, so long as the electronic agent's action is legally attributable to the person to be bound.
Use this attack sequence under time
Frame the issue
Confirm the transaction is in or affecting interstate or foreign commerce.
Resolve the next checkpoint
Check whether the subject matter falls within an excluded category such as wills, family law, or listed notices.
Resolve the next checkpoint
Find the intent to sign, which is part of the definition of an electronic signature.
Resolve the next checkpoint
For consumer disclosures required in writing, confirm the consumer's affirmative consent and the required statements.
Finish the conclusion
For an automated system, ask whether the electronic agent's action is attributable to the person to be bound.
Common wrong turns
- The statute makes electronic form not a ground for denying validity, and it does not validate a contract that fails for another reason such as lack of consideration.
- Nobody has to accept electronic records or signatures, so a party may insist on paper.
- Wills, testamentary trusts, and family-law matters are outside the federal statute, and eviction and foreclosure notices for a primary residence are outside it too.
- A sale of goods is within the federal statute because Article 2 is carved back in.
Worked example
Ravi, in another state, clicks an 'I agree and sign' button on an online form to buy $8,000 of equipment from a seller in Ohio. Later he claims he is not bound because he never signed on paper.
The transaction affects interstate commerce, and a signature or contract may not be denied effect solely because it is electronic. Clicking to sign, with intent to sign, is an electronic signature, and Article 2 sales are within the statute, so Ravi cannot avoid the contract on that ground alone.
Practice this topic
The general rule
Section 7001(a) of title 15 provides that, notwithstanding any statute, regulation, or other rule of law, with respect to any transaction in or affecting interstate or foreign commerce, a signature, contract, or other record may not be denied legal effect, validity, or enforceability solely because it is in electronic form, and a contract may not be denied effect solely because an electronic signature or electronic record was used in its formation.
Section 7006 defines an electronic signature as an electronic sound, symbol, or process attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record, and it defines an electronic record as a contract or other record created, generated, sent, communicated, received, or stored by electronic means.
Limits and consumer consent
Section 7001(b) provides that the statute does not require any person to agree to use or accept electronic records or signatures, other than a governmental agency for certain records. Section 7001(c) provides that where a law requires information to be given to a consumer in writing, an electronic record satisfies it if the consumer affirmatively consented and has not withdrawn consent, was given a clear and conspicuous statement of rights and procedures before consenting, received a statement of hardware and software requirements, and consented electronically in a manner reasonably demonstrating access.
Section 7001(d) and (e) address retention: a retention requirement is met by an electronic record that accurately reflects the information and remains accessible in a form capable of accurate reproduction, and an electronic record may be denied effect if it cannot be retained and accurately reproduced by all entitled persons.
Exceptions and electronic agents
Section 7003(a) provides that the statute does not apply to a contract or record governed by a law on wills, codicils, or testamentary trusts, by a state law governing adoption, divorce, or other family-law matters, or by the Uniform Commercial Code other than sections 1-107 and 1-206 and Articles 2 and 2A. Section 7003(b) adds court documents, utility termination notices, notices of default, foreclosure, or eviction on a primary residence, notices of cancellation of health or life insurance, and recall notices.
Section 7001(h) provides that a contract may not be denied legal effect solely because its formation, creation, or delivery involved an electronic agent, so long as the action of the electronic agent is legally attributable to the person to be bound.
Frequently asked questions
What is the controlling rule for electronic signatures and records: the federal e-sign act and its exceptions?+
State the general validity rule, check the exceptions, and apply the definition of electronic signature including intent to sign, then address any consumer-consent requirement.
Is a contract signed electronically valid?+
In a transaction in or affecting interstate commerce, it cannot be denied effect solely because it is electronic, under 15 U.S.C. 7001(a).
What is an electronic signature under federal law?+
An electronic sound, symbol, or process attached to a record and executed or adopted with intent to sign it, under 15 U.S.C. 7006(5).
Can a party insist on paper?+
Yes, the statute does not require any person to agree to use or accept electronic records or signatures, under 15 U.S.C. 7001(b)(2).
Does the federal statute apply to wills?+
No, wills, codicils, and testamentary trusts are excluded, under 15 U.S.C. 7003(a)(1).
Does the federal statute cover sales of goods?+
Yes, the Uniform Commercial Code exception carves Articles 2 and 2A back in, under 15 U.S.C. 7003(a)(3).