Modern electronic signature technology – invented as a solution to the age-old problem of sending secure agreements – has taken off in the last decade. In our mobile era, consent and agreement are demonstrated with a digital swipe, click, tap or signature.
By next year, overall eSignature transaction volumes will exceed 700 million, according to a Forrester projection.
When you think about it, it’s remarkable that any confusion lingers over the legality of electronic signatures, yet it does. That’s what makes Gov. Jerry Brown’s recent signing of a California law to clarify how state government agencies can accept signatures electronically so important.
Two pieces of 1990s legislation had left California law unclear for government agencies, cities and counties because there was a perceived contradiction with no cross-reference to provide clarity. Brown signed a bill sponsored by Assembly member Evan Low that resolves that issue, making it easier for agencies to use electronic signature technology. The Electronic Signature & Records Association (ESRA), a not-for-profit volunteer organization comprising both users and providers of electronic signatures and records, worked closely with California Secretary of State Alex Padilla’s staff to find a way to clarify the law.
By way of definition, electronic signatures are a broad category of methods used for electronically signing a document or otherwise providing consent. Digital signatures, essentially, are a subcategory of electronic signatures that include specific methods of ensuring security and attribution.
In the late ’90s, California along with many other states passed the Uniform Electronic Transactions Act (UETA), which allowed public and private sectors to use both digital and electronic signatures. But an earlier California law had prescribed the use of “digital signatures” for government transactions. Without clear guidance on how to reconcile the two statutes, most California agencies had thought they must follow the earlier state law. As a result, localities such as Palo Alto and Sacramento adopted ordinances clarifying that their city governments may use both digital and electronic signatures.
Now, as a result of Assembly bill 2296, California government agencies of all sizes can transition to use of electronic records at an even more rapid pace.
Just as importantly, over the past year the California legislature has made other significant strides in removing barriers to electronic signatures that make doing all kinds of business more consumer-friendly.
One new law has cleared the path for electronic signatures in life insurance contracts. Another, signed earlier this month by Gov. Brown, revised the Electronic Recording Act in California to remove certain barriers for notaries by expanding the types of electronic records that may be delivered to a county recorder for recording.
California’s commitment to modernizing state law around electronic transactions is significant. The state is home to Silicon Valley and a technology leader that many U.S. states look to for leadership in new technology adoption. Yet the efforts in California are emblematic of the work that remains to resolve the patchwork of barriers that get in the way of consumer and business desires to get things done simply and easy.
Nationally, the legal foundation for electronic records and signatures has been in place for more than 15 years. In 1999, the first states adopted UETA. After some, like California, included exceptions, Congress passed federal ESIGN Act in 2000, implementing a national uniform standard for electronic transactions to encourage their use.
As we move more deeply into a future based on digital data, it’s time to take down the final barriers to electronic signatures and follow the lead of the City of San Francisco, Palo Alto, Butte County and Alameda County, among others, in making the digital transformation for faster, more efficient, convenient and secure government processes and transactions. It’s terrific to see California leading the way.
Reggie Davis is general counsel and chief legal officer at DocuSign.