Writing on wall for traditional signatures

For the London Free Press - August 22, 2011 - Read this on Canoe The increasing use of e-signatures raises several questions about their suitability for legal documents

Adobe recently announced the acquisition of EchoSign, a web-based provider of electronic signatures and signature automation. If ink was used to finalize the deal, it had not even dried yet when RPost, a self-proclaimed pioneer of e-signatures, launched a lawsuit against Adobe and EchoSign for patent infringement.

News coverage of the lawsuit described how millions of individuals and businesses worldwide have been using this technology to remotely automate the entire signature process with the click of a button. This is all fine in theory, but, when parties to a contract are relying on it, will an e-signature hold up in court?

According to the Ontario Electronic Commerce Act (ECA), a legal requirement that a document be signed (with a very few exceptions, such as wills, powers of attorney for individuals, documents for land transfer, and negotiable instruments) is satisfied by an electronic signature. The question then is: what is required to meet the definition of a legally binding e-signature?

The act defines "electronic signature" as "electronic information that a person creates or adopts in order to sign a document and that is in, attached to or associated with the document."

Similarly, the Personal Information Protection and Electronic Documents Act (PIPEDA) defines "electronic signature" as "a signature that consists of one or more letters, characters, numbers or other symbols in digital form incorporated in, attached to or associated with an electronic document."

Although it's possible to digitize handwriting so that it's displayed as an image, an electronic signature doesn't need to look like a handwritten signature or even contain the letters of the signatory's name, as long as it's "associated with" the document.

There are two basic legal requirements concerning the reliability of an e-signature that must be satisfied. It must be reliable to identify the person, and to associate the e-signature with the relevant electronic document.

So how do services such as EchoSign do that? Essentially, you load the document to be signed on to the EchoSign service, along with the email address of the person who is to sign it. The person identifies themself by logging in to an existing social media account, and clicks to sign the document. The service returns the document, along with details about the signature, including the date, the email account used by the signatory who created the document, where it was sent, who viewed it, how the signatory's signature was verified, and to whom and when the signed document was returned.

If, for example, the signatory identified themselves with their Twitter account, it includes their Twitter identity and the image they use for their account.

While we may be used to actual handwritten signatures, one has to ask whether this type of process might be more reliable, and less prone to fraud than the traditional method, particularly where the parties are not together when it's signed.