http://www.square-9.com/compliance/esign-ueta | With many legal considerations to take into account with electronic documents, the best solution is an easy-to-access online management system. Square 9’s SmartSearch and GlobalForms solutions comply with the regulations, alleviating the stress of compliance.

1. & UETA
ESIGN
C O M P L I A N C E

2. CHANGING
LANDSCAPE
As contract
management
transitions into a
paperless world,
documents must
remain compliant with
government
regulations. Many
companies are seeking
online solutions to
eliminate paper
systems to keep up
with the transition.
This opens questions
pertaining to the
legitimacy and
enforceability of online
contracts. Fortunately,
strong precedents exist
relating to the validity
of online contracts and
specific guidelines
must be followed.

3. ESIGN
& UETA
The passage of
Electronic Signatures
in Global and
National Commerce
Act (ESIGN) and the
adoption of the
Uniform Electronic
Transactions Act
(UETA) solidified the
legal landscape for
use of electronic
records and
electronic signatures.
ESIGN and UETA
establish that
electronic records
and signatures carry
the same weight and
legal effect as paper
documents and
handwritten
signatures.

4. ESIGN
The intent of the federal ESIGN Act
is that a contract or signature may
not be denied legal effect, validity,
or enforceability solely because it is
in electronic rather than paper
form. That means electronic
documents are subject to the same
legal scrutiny of authenticity that
applies to paper documents.
Prior to the ESIGN Act, there were
many state laws requiring certain
contracts be on paper with
handwritten signatures. This
caused confusion as to when
contracts could be handled over the
Internet (or other electronic
means). The ESIGN Act states that
if the parties agree to use electronic
signatures to seal their transaction,
the agreement is valid despite any
state law to the contrary.

5. State-based compliance comes in the
form of UETA. It was developed to
provide a legal framework for the
use of electronic signatures and
records in government or business
transactions, and makes electronic
records and signatures as legal as
paper and manually signed
signatures.
For example, before the adoption of
this Act, states required banks to
retain physical copies of all checks.
Besides the organizational efforts
this took, it had significant storage
space implications. Keeping these
checks in electronic rather than
paper form simplified a bank’s
storage and access concerns. UETA
aimed to rectify this by streamlining
and unifying these laws to allow for
electronic retention.
UETA

6. UETA
Scope
The Act is limited by
the fact that it only
applies to transactions
related to business,
commercial (including
consumer), and
governmental matters.
Transactions with no
relation to business,
commercial, or
governmental
transactions are not
subject to this Act.
Unilaterally generated
electronic records and
signatures which are
not part of a
transaction also are not
covered by this Act.

7. Choosing
Electronic
Signatures
In choosing whether to use
electronic signatures,
companies should:
• Evaluate the risks of
the transaction
• Evaluate the
effectiveness of the
electronic signature
method
• Evaluate the cost of
the available
alternative

8. Document
Management
Solutions
When implementing ESIGN/UETA
compliant document management
solutions, specific guidelines and
requirements must be followed. The
system must be able to:
• Digitally verify who signed a
document
• Prevent and detect tampering and
log data to identify the responsible
party
• Comply with applicable electronic
signature laws and other laws
• Meet applicable legal
requirements
• Provide an audit trail to prove
compliance and provide evidence
in the event of wrongdoing
• Verify that all required data meet
legal and business requirements
• Prevent incomplete, erroneous, or
unauthorized changes from being
processed

9. Noncompliance
Consequences
In determining whether
electronic records or electronic
signatures may be sufficiently
reliable for a particular purpose,
one should consider the state and
federal laws that apply to the
transactions, the relationships
between the parties, the value of
the transaction, the risks, and the
cost of management and
preservation of electronic
records.
Violations of either ESIGN or
UETA can have severe
consequences and a negative
impact on business. Not only
could people be incarcerated but
very large fines can be imposed
for noncompliance.

10. 203.789.0889
www.square-9.com
Square 9 offers ESIGN and UETA compliant document solutions for your business
needs. It’s award-winning SmartSearch solution improves inefficient paper processes to
automate and structure your document management needs. Square 9’s GlobalForms,
allows for quick and easy creation of customized web based forms as well as the ability
to apply electronic signatures. Contact Square 9 today to learn more.