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The “Electronic Signatures in Global and National Commerce” Act and Ecommerce

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The “Electronic Signatures in Global and National Commerce” Act and eCommerce

The “Electronic Signatures in Global and National Commerce” Act went into effect October 1, 2000. This act will have a profound impact on online business by establishing the legal validity of electronic contracts between legal or commercial entities. The new level of enforceability the act gives to online transactions extends from retail purchases to Business-to-Business to almost any contract two parties would like to execute online.

The act, on a national level, specifically makes “electronic signatures” binding and enforceable by superceding most existing state and federal laws requiring hard copies of many types of documents to exist. Electronic records may now serve in place of these hard copies and the act even provides for electronic Notary Publics where required.

A seller can now reasonable be assured that they have a purchaser’s electronic signature on a contract of sale if the purchaser is made aware they are entering into the contract and completes a definitive and unambiguous process that signals the intention of the purchaser to be bound to the terms and conditions of the sale. At this point, the purchaser has given their electronic signature to the contract of sale and is legally bound by the terms and conditions of the contract. The seller has also completed the process of offering the contract of sale. These actions demonstrate the parties’ intention to be bound by the contract and affix their electronic signatures to the contract, making the contract legally binding on both parties. This article will outline two examples of how this can be implemented for retail eCommerce and for a more complex business-to-business contract.

With only minimal exceptions, the act covers most types of contracts and records. Exceptions fall into only a few very specific

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