1. ESIGN 101 Ken Moyle Margo Tank David Whitaker Chief Legal Officer
DocuSign, Inc.
Margo Tank
Partner
BuckleySandler LLP
David Whitaker
Counsel

2. The UETA
The state law solution – the Uniform Electronic Transactions Act
Created by NCCUSL
Overlay statute
Authorizes replacing writings with electronic records
Authorizes electronic signatures
Requires affirmative “opt-in” by parties -- but opt-in may be shown by surrounding circumstances

3. The UETA Problems with the UETA Must be adopted by each state
Process can take years
States add non-uniform provisions
California
Doesn’t change federal law

4. The Federal ESIGN Act
A federal solution -- the Electronic Signature In Global and National Commerce Act
Covers state and federal law
Instant 50 state baseline uniformity
Adopts the most significant UETA provisions
Provides specific standards for consumer consent
Sets boundaries for regulatory authority

5. Scope of the UETA and ESIGN
Applies to the use of electronic records and signatures in virtually any business-to-business or consumer transaction, unless specifically excluded
UETA applies to state law
ESIGN applies to state and federal law
Primary exclusions:
Wills, codicils and testamentary trusts
Funds transfers (covered by UCC Article 4A)
Letter of Credit (covered by UCC Revised Article 5)
Securities (covered by UCC Revised Article 8)
Security interests in goods and intangibles (covered by UCC Revised Article 9)
Software licensing laws (if State has adopted UCITA)
Most laws concerning checks

6. Scope of the UETA and ESIGN
Included are:
Consumer protection laws
Laws governing real estate transactions (subject to special rules concerning documents to be filed of record)
Laws governing Insurance
Laws of agency
Laws covering powers of attorney
Laws requiring notarization of documents
Laws governing trusts (except testamentary trusts)
Laws concerning the submission of documents to, or issuance of documents by, government authorities (subject to special rules )

7. Three Pillars of the UETA and ESIGN
A record or signature may not be denied legal effect or enforceability solely because it is in electronic form
If a law requires a record to be in writing, an electronic record satisfies the law
If a law requires a signature, an electronic signature satisfies the law

8. Electronic Records Under UETA and ESIGN
“Record” means information that is inscribed on a tangible medium, or that is stored in an electronic or other medium and is retrievable in perceivable form
All writings are records, but not all records are writings
“Electronic Record” is virtually any stored record that is not on paper

9. Electronic Signature
An “electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record”

10. Electronic Signature Includes: traditional ink signatures typed names
a click-through on a software program’s dialog box combined with some other identification procedure
biometric measurements
a digitized picture of a handwritten signature
a complex, encrypted authentication system

11. Electronic Signature Legal sufficiency vs. attribution
UETA answers the question “is it a signature?”
Does NOT answer the question “is it your signature?”
Attribution must be proven
May be proven by any means, including surrounding circumstances or efficacy of agreed-upon security procedure
Burden of proof is on person seeking to enforce signature
Non-repudiation is a legal condition, not a technology feature

12. Electronic Signature Intent and authentication
Signer must intend to “authenticate” a document at time of signing
Four basic purposes for authentication
I agree to it
It came from me
I’ve seen it
I got it
Purpose of signature derived from surrounding circumstances, just as on paper
Need “indicia of intent,” just as on paper

13. The Federal ESIGN Act: Consumer Consent – A Closer Look
Special procedure required if statute, regulation or other rule of law calls for a writing to be provided to a consumer
Basic rules:
Consumer must affirmatively consent
Other party must provide disclosures prior to consent in clear and conspicuous statement
Consent must demonstrate ability to receive documents

14. The Federal ESIGN Act: Consumer Consent – A Closer Look
Clear and conspicuous disclosure of:
Consumer’s right to have documents provided on paper
Consequences of withdrawal of consent
Fees
Termination of transaction
Scope of transaction covered by consent
Procedure for withdrawing consent and updating contact info
Procedure and fees for obtaining paper copies
Hardware and software requirements for accessing and retaining records

15. The Federal ESIGN Act: Consumer Consent – A Closer Look
“Reasonable demonstration”
Consumer consent must
Be electronic or be confirmed electronically
Include a “reasonable demonstration” of consumer’s ability to access information in the electronic form(s) provided
Legislative history attempts to set standard
Test is not intended to “burden commerce”
confirming receipt of test files is sufficient
Failure to include “reasonable demonstration” in consent process may not be used as basis to invalidate contract
Query: How to handle transactions where consumer gets paper but business retains electronic records?

16. Key Requirements Key Requirements
Consent is required if law otherwise requires info delivered in writing
ESIGN Consumer Consent Process
B-to-B Consent
UETA delivery provisions not preempted by ESIGN
Need Agreement (express or implied) on Delivery Method
Need to deal with bouncebacks in many cases
Popular Delivery Options
Display as part of an interactive session,
Delivery in the body of an or as an attachment, or
Delivery of an or other electronic notice that has a URL embedded in it that the consumer may activate to review the information.

17. Key Requirements More Key Requirements
Electronic records are not enforceable against a recipient if the sender inhibits the recipient’s ability to print or retain a copy
Recipient must be able to retain a copy for later reference
Electronic Records retained by sender must be accurate, remain accessible for later reference
U.S. Mail delivery requirements in law or contract “trump” ESIGN, and may prevent use of electronic records
All formatting, timing and display requirements must be observed. “Timing” includes:
Proper sequence within transaction
Any time frames or deadlines for delivery
Length of time the information/document remains accessible