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    Digital Signature Legislation
Legislators and business leaders long recognized that the passage of a digital legislation was of central importance to the development of e-commerce. However, for several years members of the United States Congress debated over what to include in such a bill. During this time several states passed their own legislation allowing some forms of digital signatures to be legally binding in certain situations. When a major piece of national legislation went into effect in 2000, it was heralded as a giant step toward the harmonization of interstate and national laws, and was expected to help propel e-commerce forward.

The Electronic Signatures in Global and National Commerce Act, popularly known as the E-Sign Act was signed into law by President Bill Clinton on June 30, 2000, and became effective in October of that year. Under the E-Sign Act, digital signatures used in interstate and foreign commerce assume the same legally binding status as old-fashioned, handwritten signatures. The Act defined an ‘electronic signature’ broadly as any "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." This flexibility allows the legislation to remain valid through the course of technological development. It was expected to pave the way for a flood of financial transactions over the Internet, from securing loans to transferring money to closing home sales.

Significantly, no individual is required to use a digital signature in any situation, nor is any business compelled to accept them. However, once parties agree to make use of digital signatures, then all parties are bound to recognize the signatures as legally binding. In short, the Act bars discrimination against a signature for the sole reason that it is electronic.

Prior to the E-Sign Act, almost every state had at least one law that validated electronic signatures in some situation, while twenty states had signed onto the Uniform Electronic Transactions Act (UETA), which recognized digital signatures as legally binding for contracts. However, in adopting UETA, several states made their own modifications that progressively eroded the uniformity of the law. In particular, modifications tended to reflect the more popular technologies of the day, thereby reducing the degree of flexibility e-commerce laws need to remain valid over time and across borders. With the passage of the E-Sign Act came the harmonization between such laws and made national what many states had already standardized.

In addition, the E-Sign Act includes provisions for electronic record keeping. It allows electronically stored records to be considered legally valid, provided they accurately convey the information in the original record and are freely accessible to all involved parties in a valid, reproduced form. As long as these conditions are met, the record keeper fulfills the legal obligation to retain documents in their original form.

The E-Sign Act is a self-executing law, meaning it imposes no provisions or requirements for a state or federal regulatory agency to adopt or enforce its measures. Regulatory actions that involve aspects of E-Sign are permissible only if the regulations remain consistent with the Act, do not issue any requirement that a record be in paper form, remain technologically neutral, and confer no unreasonable costs on the use of electronic signatures.

E-Sign charges the Secretary of Commerce with promoting the use of digital signatures in international transactions and the harmonization of signature standards. For these efforts, the Act refers to the Model Law on Electronic Commerce as its basis, which was adopted by the United Nations Commission on International Trade Law. By the time the E-Sign Act went into effect, many European countries already recognized digital signatures. With its emphasis on international commerce, the E-Sign Act placed the United States at the same level as other leading countries.

E-sign's importance to e-commerce is difficult to estimate. It may take some time before digital signatures take hold on a widespread basis, particularly in business-to-consumer markets. However, the growing approval of electronic signatures at the national and international levels translates into modern legislation that reflects the sweeping changes the Internet and other technologies carried into the twenty-first century.

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