In an earlier blog, we looked at the enforceability of an oral agreement. With the advent of the Internet, though, more and more business is conducted online. You can ask the parties to a contract to sign, scan and e-mail/fax you copies of a contract, but that can be a real hassle. Fortunately, the U.S. Congress passed a specific law in 2000, the Electronic Signatures in Global and International Commerce Act (ESGICA), which specifically addressed concerns about e-contracts. Under ESGICA, electronic signatures and electronic agreements have the same legal force as paper documents and handwritten signatures.
An electronic contract can be created in a number of ways:
As a general rule, to be enforceable, a contract must be signed by all parties (though there have been opinions upholding a contract where all the parties did not sign, but the court determined from the facts that they intended to be bound by the agreement). With digital agreements, because it’s not possible to sign in the traditional sense, a number of accepted methods of electronically signing have evolved:
Cryptography is a process that involves scrambling and unscrambling data or information. The most common cryptographic tool involves scrambling an entire document and providing keys to only those individuals who are parties to the agreement, thereby preventing unauthorized or fraudulent signatures.
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