Navigating E-Signature Law & Technology€¦ · Navigating E-Signature Law & Technology Presented By: ... Florida Statutes § 668.50 ... An electronic signature or electronic record

Navigating E-Signature Law & Technology

Presented By:

Andrei D. Tsygankov, Esq.

Yuri L. Eliezer, Esq.

Andrei D. Tsygankov

• General Counsel for ClientSide®

• Partner at Founders Legal® (Bekiares Eliezer LLP)

• Corporate, Software & IP Licensing Attorney

• B.S. in Management Georgia Tech

• J.D. from Georgia State University College of Law

10/30/2016www.goclientside.com 2

Yuri L. Eliezer

• Founder & CEO of ClientSide®

• Partner at Founders Legal® (Bekiares Eliezer LLP)

• B.S. of Computer and Electrical Engineering Georgia Tech

• J.D. from Georgia State University College of Law

• Patent Attorney


What Are E-Signatures?


Use Cases


General Contracts

• Partnership Agreements

• Joint-Venture Agreements

• Services Agreements

• Contracts for Sale of Goods

Legal Documents

• Fee Agreements

• Engagement Letters

• Settlement Agreements

• IP Assignment Agreements


Entity Formation Documents

• Operating Agreements

• Shareholder Agreements

• By-Laws

• Minutes

• Equity Grant Agreements

HR Documents

• Employment Agreements

• Contractor Agreements

• Non-Disclosure Agreements

• Confidentiality Agreements

• Patent Filing Forms

• Government Forms: W4/W9, I9

Use Cases

The Principles of Adoption

• Enhance Legal Integrity

• Exceed Client Expectations

• Operational Efficiency


#1: Enhance Legal Integrity

Do you ensure the document you sent was not modified?Do you perform a comparison of the document you sent out for signature with the document you received with signature?

• E-Signature Technology Solves this problem:• Single Document Accessed at a Central Server

• Document Lock with Tamper Evident Markers



Do you verify the signer’s identity?How do you know who actually signed the document? What is your proofas to the ID of the signer?

E-Signature Technology Solves this problem: Sequential Signing Automated Control ID Verification, Pin-Code Access Audit Trail for Every Signed Document


Did Multiple Signers Sign the Same Document?In Multiple Remote Signer scenario, sequential signers sign a copy of the signed document that was printed, signed, scanned, by previous signors. Not only does the scanned quality degrade after each iteration, but no one retains the original document with all of the original signatures.

• E-Signature Technology Solves this problem:

• Only Single Copy Exists

• Secure Storage and Retrieval of Signed Document

• Complies with E-Signature Laws



#2 Exceed Client Expectations

• Clients Love it!

• Who is Making the Switch?

• Corporate Clients

• University Clients

• Startups and Growth Companies

• Stay ahead of your clients and exceed their expectations!


Clients Drive Change


•Law Practice Today: How E-Signature is suited for the Legal Practice

•Association of Corporate Counsel: Recommending Adoption of, and citing to E-Signature Technology, as a platform for outside counsel

•Above the Law: Review of E-Signature Solutions

•A Recent Study: The Impact of E-signatures on Law Firms’ Efficiency

http://www.lawpracticetoday.org/article/whats-behind-rapid-adoption-e-signatures/

http://www.acc.com/vl/public/Article/loader.cfm?csModule=security/getfile&pageid=1432511&page=/valuechallenge/index.cfm&qstring=&title=Unless%20You%20Ask:%20A%20Guide%20to%20Law%20Departments%20to%20Get%20More%20From%20External%20Relationships&recorded=1

https://sdr.salesloft.com/c/c1f27e82-2d26-41ae-aa96-876ba823206b/aHR0cDovL2Fib3ZldGhlbGF3LmNvbS8yMDE2LzA1L3doeS1sYXd5ZXJzLW5lZWQtdG8tdW5kZXJzdGFuZC1lbGVjdHJvbmljLXNpZ25hdHVyZXMv/abovethelaw-com-2016-05-why-lawyers-need-to-understand-electronic-signature

https://sdr.salesloft.com/c/331bb029-a086-4958-8401-720a31f18a79/aHR0cHM6Ly93d3cuZ29jbGllbnRzaWRlLmNvbS9hdHRvcm5leS1ibG9nL3RoZS1pbXBhY3Qtb2YtZWxlY3Ryb25pYy1zaWduYXR1cmVzLW9uLWxhdy1maXJtcy1lZmZpY2llbmN5LXN0dWR5Lw==/www-goclientside-com-attorney-blog-the-impact-of-electronic-signatures-on-l

Some of the Options


DocuSign: docusign.com

HelloSign: hellosign.com

Adobe Sign: adobe.com

Citrix: rightsignature.com

E-Sign Live: esignlive.com

Need Help Deciding? ClientSide - goclientside.com

Presenter

Presentation Notes

We are not a reseller of this tech!

#3 Operational Efficiency

• THIS IS THE MOST IMPORTANT REASON


#3 Operational Efficiency

• Advantages:

• Automated Work-Flow

• Reduced Errors

• Faster Turn Around

• Time Savings

• Increased Productivity / Billing for what Matters


ATTORNEY | PARALEGAL | ADMIN

Engage

Intake

Service

Finalize

Prepare, Send, Receive

Signed Engagement Letters


Questionnaires


Documents for Review/Approval


Completed Forms

Prepare, Send, Receive Signed Copies

Client Administration is Costly, Time Consuming & Inefficient


Presenter

Presentation Notes

Client Perspective

Firm Client

Engage

Intake

Service

Finalize

Prepare, Send, Receive Engagement Letters

Request & Receive Information

Prepare, Review, & Send Work Product

Receive Authorization & File Electronically

Print, Fill in Form, Scan, Email

Call, Download, Review, Revise, Email

Print, Sign, Scan, Fax, Mail Engagement Letters

Print, Sign, Scan, Fax, Mail e-file authorizations


Lawyers can be Difficult to Work with Because of Inefficient Client Administration

Presenter

Presentation Notes

From Firm Perspective: What Happens with Volume??? How do you scale?? Notepad ? Task Management?

Remote Signature Requests

For Multiple Signers…


Automate Client Administration to: Increase Firm Profitability & Client Satisfaction

Prepare Docs/Form 10-20 min

Send email with instructions 2 min

Send Reminder 1 2 min

Send Reminder 2 2 min

Download received doc 30 sec

Review Doc 30 sec

Place in DMS 15 sec

Approximately 25 mins Per Signer


ATTORNEY | PARALEGAL | ADMIN

CLIENT | OPPOSING COUNSEL

The Conventional Work Flow


Centralize the Work Flow


AUTOMATION SERVER

Automate the Work Flow


Work Flow Automation

Document Review and Approval Automation

Intake Form Automation and Document Assembly

Signature Process Automation

Policies

Templated Email Communications

Notifications / CC

Document Storage and Retention

Automate the Work Flow


Integrations

Email Integration

DMS Integration

CRM Integration

Tracking

Status Tracking (Viewed/Downloaded/Signed/Replied)

Automated Follow Ups and Auto-Reminders

Automated Correspondence Logging

Audit Trail

The Audit Trail


Relevant Laws

• Uniform Electronic Transactions Act (UETA) • Model law drafted by the National Conference of Commissioners on Uniform State Laws

• Presented for adoption by individual states in 1999

• http://www.uniformlaws.org/Act.aspx?title=Electronic%20Transactions%20Act

• Electronic Signatures in Global and National Commerce Act (ESIGN)• 15 U.S.C. §§ 7001-7031 (“ESIGN”)

• Passed into Federal Law in 2000

• http://www.gpo.gov/fdsys/pkg/PLAW-106publ229/html/PLAW-106publ229.htm


http://www.uniformlaws.org/Act.aspx?title=Electronic%20Transactions%20Act

http://www.gpo.gov/fdsys/pkg/PLAW-106publ229/html/PLAW-106publ229.htm

Relevant Laws

• Georgia’s Adoption of Uniform Electronic Transactions Act (UETA)

• O.C.G.A. §10-12-1 et. seq.

• Became effective July 1, 2009

• Florida’s Adoption of Uniform Electronic Transactions Act (UETA)

• Florida Statutes §668.50

• Became effective July, 2000


E-Signature Definition

Electronic Signature:

• “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”

• 15 U.S.C. § 7006(5) (ESIGN)

• O.C.G.A § 10-12-2(8) (GA UETA)

• Florida Statutes § 668.03(4)


E-Signatures vs. Digital Signatures


‘Click’ or ‘Mark’ to accept is valid

• Metro. Reg' l Info. Sys., Inc. v. Am. Home Realty Network, Inc., 722 F.3d 591, 600-03 (4th Cir. 2013) (finding that, by clicking “yes” in response to electronic terms of use agreement prior to uploading copyrighted photographs, a subscriber signed a written assignment of exclusive copyright ownership in those photographs).

• Bergenstock v. LegalZoom.com , Inc. 2015 WL 3866703 (finding that, clicking “Agree and Place Order” is valid acceptance of terms and conditions, including arbitration provision).

E-Signatures in Practice


Electronic Terms of Service are enforceable if presented to a user-signer together with a required ‘Sign Up’ button

• Fteja v. Facebook, Inc., 841 F.Supp.2d 829 (SDNY 2012) (finding that consumers must be informed of terms of the transaction before signing electronically).

E-Signatures in Practice


ESIGN Act

• States must allow the use of electronic signatures if the parties involved agree to this method of signing.

• Applies to TRANSACTIONS:

• In Interstate Commerce

• In Foreign Commerce

• With the Federal Government


ESIGN Act General Principles

• 1. A signature, contract, or other record related to any transaction cannot be denied legal effect, validity or enforceability solely because it is in electronic form.

• 2. Transaction is defined BROADLY:

• Sale, lease, exchange, licensing or other disposition of personal property, goods, intangibles, services or combination thereof;

• Sale, lease, exchange or other disposition of any interest in real property. 15 U.S.C. §7006 (13).



• 3. A contract relating to any transaction (in or affecting Interstate Commerce or Foreign Commerce) may NOT be denied legal effect, validity, or enforceability solely because:

• An electronic signature or electronic record was used in its formation. 15 U.S.C. § 7001(a)(2).



• 4. If the law requires that a contract or other record must be in writing to have legal effect, validity or enforceability, electronic form may be denied if:

• Such record CANNOT be retained and accurately reproduced by all parties. 15 U.S.C. § 7001(e).



• 5. ESIGN does NOT require any person to use or accept electronic records or signatures.

15 U.S.C. § 7001(b)(2).

• If parties agree to electronic signatures, then ESIGN gives them legal effect.

• In Business-to-Business (B2B) transactions, prior behavior among the parties can govern acceptance of electronic signatures and records.

• In Business-to-Consumer (B2C) transactions, Consumers must have notice, and must consent.


ESIGN Does NOT Apply To

• Substantive protections provided by consumer protection laws. 15 U.S.C. § 7001(b)(1).

• Content or timing of disclosures required by law. 15 U.S.C. § 7001(c)(2)(a).

• Any requirement by a federal regulatory agency, self-regulatory organization, or state regulatory agency that records be filed in a specified standard. 15 U.S.C. § 7004(a).



• (a) Any contract or record if it is governed by:

• (1) A statute, regulation, or other rule of law governing the creation and execution of wills, codicils, or testamentary trusts. 15 U.S.C. § 7003(a)(1).

• (2) A State statute, regulation, or other rule of law governing adoption, divorce, or other matters of family law. 15 U.S.C. § 7003(a)(2).

• (3) the Uniform Commercial Code (UCC), as in effect in any State, other than sections 1–107 and 1–206 and Articles 2 and 2A. 15 U.S.C. § 7003(a)(3).



• (b)(1) court orders or notices, or official court documents (including briefs, pleadings, and other writings) required to be executed in connection with court proceedings. 15 U.S.C. § 7003(b)(1).



• (b) (2) any notice of—

• (A) the cancellation or termination of utility services (including water, heat, and power). 15 U.S.C. § 7003(b)(2)(a).

• (B) default, acceleration, repossession, foreclosure, or eviction, or the right to cure, under a credit agreement secured by, or a rental agreement for, a primary residence of an individual. 15 U.S.C. § 7003(b)(2)(b).



• (b) (2) any notice of—

• (C) the cancellation or termination of health insurance or benefits or life insurance benefits (excluding annuities). 15 U.S.C. § 7003(b)(2)(a).

• (D) recall of a product, or material failure of a product, that risks endangering health or safety. 15 U.S.C. § 7003(b)(2)(d).



• (3) any document required to accompany any transportation or handling of hazardous materials, pesticides, or other toxic or dangerous materials. 15 U.S.C. § 7003(b)(3).


UETA

• Model law presented to states to codify into state law

• Establishes that electronic signatures have the same legal authority as ‘wet’ signatures

• Adopted by 47 states, D.C., Puerto Rico, U.S. Virgin Islands. Exceptions:• Illinois

• New York

• Washington


UETA & Reverse Pre-Emption

• States given option to enact UETA substantially as written, or face pre-emption by ESIGN Act

• If state adopted UETA in substantially Model form, the state’s law would prevail over ESIGN

• If a state’s UETA provision is inconsistent with ESIGN, the Federal law would again pre-empt as to that provision.


• Georgia• Record or signature evidence not to be excluded solely on the basis of

electronic format.• O.C.G.A § 10-12-13

• Florida

• In a proceeding, evidence of a record or signature may not be excluded solely because the record or signature is in electronic form.

• Florida Statutes § 668.50(13)(d)

Evidence: Electronic Records & Signatures


Georgia UETA

• O.C.G.A § 10-12-20

• This chapter modifies, limits, and supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. Section 7001, et seq., but does not modify, limit, or supersede…15 U.S.C. Section 7001(c) [Consumer Disclosures], or authorize electronic delivery of any of the notices described in… 15 U.S.C. Section 7003(b) [Notices].


UETA vs. ESIGN: Family Law

UETA

• Does NOT expressly limit applicability to family law.

ESIGN Act

• [Not applicable to any] State statute, regulation, or other rule of law governing adoption, divorce, or other matters of family law…


UETA vs. ESIGN: Admissibility in Court

UETA

• UETA specifically states that an electronic record or signature is not to be excluded solely on the basis of electronic format.

ESIGN Act

• ESIGN Act does not provide specific rules and guidance on when e-signature and e-records are considered admissible.


UETA vs. ESIGN: Consumer Enforceability

UETA

• Very lenient

• Enforceability against consumers determined by actions of the parties, the context and overall circumstances.

• Context, actions and circumstances taken into account when determining if a consumer provided consent.

ESIGN Act

• Consumers must affirmatively consent to electronic records.

• Consumers must be provided notice of their:

• Rights to hardcopy records

• Rights to withdraw consent and be provided information on how to do so

• Need to review and store the e-records


UETA vs. ESIGN: Signature Authentication

UETA

• Authentication of a signer’s signature or mark is critical.

• There must be proof that a signature is the mark (or the act) of a person who is supposed to sign.

• Extrinsic evidence may be used in proving this (for example: an IP address; exclusive access or use of an email account, etc.)

ESIGN Act

• ESIGN Act does not address how or when signatures need to be authenticated or attributed to a specific signer.


UETA vs. ESIGN: Variation by Parties

UETA

• Parties may privately agree to vary the effects of many UETA provisions.

ESIGN Act

• No specific language in place that allows parties to privately change provisions of ESIGN.


UETA vs. ESIGN: Transmission & Receipt

UETA

• UETA is lenient on the transmission and receipt of records. Generally,

• A record is sent once it leaves control of the sender.

• A record is received when it enters the system a recipient uses and becomes accessible to the recipient.

ESIGN Act

• ESIGN Act does not address how or when a record is considered to have been sent or when it has been received.


Written agreement in downloadable, electronic form is valid.

“…agreement is a “written provision” despite being provided to users in a downloadable electronic form. The latter point has been settled by the Electronic Signatures in Global and National Commerce Act (“E–Sign Act”)…”

• Specht v. Netscape Communications Corp. 306 F.3d 17 (2nd Cir. 2002)

ESIGN & UETA in Practice


• Common Hurdles: • NOT validity of electronic signatures themselves, but Issues of substantive

law. For example:

• Did the parties have INTENT to form a contract?

• Did all parties have NOTICE (actual or constructive) of the transaction terms?

• Did all parties give proper CONSENT to the terms?



Receipt of announcement email insufficient to change terms of an agreement

• Campbell v. Gen. Dynamics Gov' t Sys. Corp., 407 F.3d 546, 559 (1st Cir. 2005) (finding that e-mail announcement regarding new dispute resolution policy was insufficient to put employee on notice that the policy was a contract that extinguished the right to access a judicial forum for resolution of federal employment discrimination claims ).



Signers must have NOTICE of terms BEFORE accepting electronically

• Labajo v. Best Buy, 478 F.Supp.2d 523 (SDNY 2007) (finding that consumers must be informed of terms of the transaction before signing electronically).



Record integrity & tamper-proof storage is crucial

• Adams v. Quicksilver, 210 Cal App. Unpub. LEXIS 1236 (2010) (finding that a party cannot prove, by preponderance of the evidence, that post-signature alteration of a document did not occur in a system that allowed post-signature alteration of the document).



Admissibility in Court

• “To meet FRE 901(a) requirements for authentication, the audit trail, signatures and documents must also be secured in a manner that renders the information unalterable without detection”

• Lorraine v. Markel American Ins. Co., 241 F.R.D. 534 (D.Md2007)



Admissibility in Court

• “Organizations must demonstrate to the Court’s satisfaction that they have maintained a secure retrieval process of the audit trail and signed records by which a credible witness can confidently testify.”

• Lorraine v. Markel American Ins. Co., 241 F.R.D. 534 (D.Md2007)



Authentication may be problematic if use of account or medium through which signatures take place is not exclusive to signer

• Kerr v. Dillard Store Services, Inc., 2009 BL 30588 (D.Kan2009) (finding that mandatory arbitration provision in electronic agreement is unenforceable against employee because supervisor had access to employee’s account and opportunity to sign employee’s name).



Enforcing party has burden to show that the agreement was actually signed by party against whom it is being enforced

• Ruiz v. Moss Bros. Auto Group, Inc. 232 Cal.App.4th 836 (2014) (finding, on de novo review, that defendant did not prove by a preponderance of the evidence that plaintiff signed an arbitration agreement that defendant was seeking to enforce).



Takeaways

• For E-Signatures to be valid and enforceable: • All parties must consent to working together electronically

• Terms being accepted must be clearly presented before requiring signature

• All parties must express their consent to the terms being presented

• All parties must have an exclusive way to sign or accept terms

• All parties must have access to the signed contract, records or data after signing


Contact Us

Yuri L. Eliezer, Esq.

[email protected]

Direct: 404.537.3669


Andrei D. Tsygankov, Esq.

[email protected]

Direct: 404.537.3668

mailto:[email protected]

mailto:[email protected]