Basics About Electronic Signatures
An electronic signature is simply a marking or indication, other than a manual signature on paper, which is intended to act as a signature and therefore an assent to certain terms. While in most cases this involves the signer typing his or her name in the relevant location, an electronic signature may also be made by producing an electronic image/symbol or sound so long as this is sufficiently associated with the signer. See KRS 369.102(8). The key is that an act occurred with the intent that the act serve as a signature.
In most cases all that is required is that an individual type his or her name using the same name format that would be used for a manual signature (e.g., one’s legal name). Sometimes the party requesting the electronic signature will request that the signer place his or her name between two forward slashes, as in /John A. Smith/. If the signature will appear in an online form, the requestor may ask that the signer’s name be entered twice, or that the signer check a box indicating his or her intent to sign in the relevant field. It may then be presumed from the circumstances that the person whose name was signed is the same person who signed the agreement.
The Uniform Electronic Transactions Act (UETA)
The Uniform Electronic Transactions Act (UETA) is a statute that has been adopted by various states that, among other topics, addresses the validity of electronic signatures as a means of accepting legal terms. Under UETA, electronic documents and electronic signatures are just as valid as printed documents and manually-signed signatures. But while electronic documents and signatures are equally enforceable, the Act makes it clear that that these digital versions are not required. KRS 369.105(1) and KRS 369.118(3).
According to the National Conference of State Legislatures, 47 states plus the District of Columbia have enacted UETA, meaning there is almost universal acceptance of electronic documents and signatures nationwide. Kentucky enacted UETA in 2000, and it applies to any electronic record or signature made or communicated on or after August 1, 2000. KRS 369.104.
Key Provisions of UETA
- UETA provides only default rules for electronic signature validity, and such rules may be varied by agreement. KRS 369.105(4). This means that parties may specifically agree that only manual signatures can function as contractual assent.
- If the law requires a document to be signed, an electronic signature satisfies the law. KRS 369.107(4). An electronic signature may not be denied legal enforceability solely because it is in electronic form.
- That being said, UETA does NOT apply to certain types of transactions. See KRS 369.103. This means that unless the parties have agreed in advance that electronic signatures are binding, traditional manual signatures are required with regard to the following:
- Wills (including codicils to wills) and trusts
- Contracts that fall under the provisions of the Uniform Commercial Code (KRS Chapter 355) including those for the sale of goods and lease agreements
- Deeds or any instrument that conveys an interest in real property
- Negotiable instruments that establish title or an interest in title
- An electronic signature is attributable to a person (only) if it was the act of the person. KRS 369.109(1). This reiterates the principal that a person who does not sign an agreement, electronic or manual, cannot be held to its terms. This specific provision should answer the reasonable concern that it may be easier to forge an electronic signature than a manual one, so an alleged signer may be held to terms that he or she never signed. In such an instance, the party seeking to enforce the signature would have to prove actual signing, which could be done in any manner, including through a showing of the effectiveness of the security procedures designed to verify identity.