The Coronavirus has caused an immense strain on legal and transactional work, especially in the avenue of document approval. Important documents, whether personal or professional, have required a physical pen-to-paper signature for thousands of years. But in this new era, with technology being more prevalent than ever and making our lives so much easier, shouldn’t there be a more convenient way to approve documents? As it turns out, there is and it could help you and your company relieve a lot of headaches in the remote world we live in today.
Many jurisdictions now permit notarizations to be done electronically by the use of digital seal and signature. Thanks to the evolution of computers and the internet, the idea of transactions and approvals have completely changed the game. Now, just about anything can be signed, sealed, and delivered through electronic means because of legislation pushed by the Legal Foundation for E-Signatures.
The federal E-SIGN Act, passed by Congress in 2000, declares that e-signatures and eNotarization for transactions between two or more parties have the same legal validity and effect as pen-to-paper signatures. In New York State, the Electronic Signatures and Records Act (ESRA) guarantees this action state-wide. E-signatures can be used in a variety of ways, but not limited to digital signatures, typed names, box clicks, email names, PINs, voice, electronic sounds, and biometrics.
Just as a regular paper and ink signature would require, signers must demonstrate their intent to sign. This can be done in ways such as clicking an “accept” button, typing a name, or using the mouse to create a signature. Also, most e-signature laws require the signer to consent to do business electronically. It could be as easy as including a “click to accept” clause that pushes forth the action of consent.
However, it is important to note that not all documents are allowed for e-signing. The E-SIGN Act, and in some states the Uniform Electronic Transaction Act (UETA), DO NOT authorize e-signature use for court pleadings, family documents, testamentary trusts, powers of attorney, and certain other documents. Not all states have the same rules and regulations, so it is important to check with local statues.
According to New York State’s Office of Information Technology Services, documents excluded include wills, trusts, decisions consenting to orders not to resuscitate, and powers of attorney and health care proxies, with the exception of contractual beneficiary designations.
Although e-signatures have opened the door to a much easier way of receiving document approval, there are still limitations out there that should be considered. As of now, e-signatures do not prevent a digital document from being altered without the signer’s knowledge. It also does not explicitly require e-signature technology to prevent tampering or forgery.
Nevertheless, as technology continues to improve every day, these shortcomings can be fixed to make e-signing more robust. COVID-19 has made signatures and notaries almost impossible to obtain due to mass closures to prevent the spread of the virus. So for the time being, and even in future endeavors, e-signatures could provide immense help for businesses and individuals to continue work as usual, as best as possible.
Tom Weyer, CPA, MS
Tom is a member of Cerini & Associates’ audit staff where he works with the firm’s nonprofit and school district clients. Tom has experience in claims and internal auditing, as well as internal controls testing and analysis. Tom’s knowledge and expertise allows him to assist in the evaluation of internal processes and risk assessment.