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on practical challenges of a signing or closing process,
many transactional attorneys do not take the time to learn
about the enforceability of eSignatures. When left with
ambiguities around enforceability, attorneys often err
on the side of traditional signatures rather than risk an
agreement being invalidated. So even for use cases where
eSignatures are clearly enforceable, attorneys may still
eschew eSignatures out of an abundance of caution.
International enforceability
The question of eSignature
enforceability in cross-border
transactions can be complicated. In
some jurisdictions—particularly,
common law countries like
the U.S.—eSignatures laws are
permissive, allowing broad
enforceability of many types
of electronic signatures. In
other jurisdictions—such as the
European Union—eSignatures
will be enforced only if they
meet stricter digital signature
standards, including encryption
requirements to detect any
subsequent modifications. While
these additional requirements
sound cumbersome, many
eSignature providers support encryption and accreditation
requirements out of the box. And there are resources to
help attorneys confirm the enforceability of eSignatures
in various jurisdiction. Still, the potential for multiple
jurisdiction-specific eSignature requirements makes the
use of eSignatures on cross-border transactions more
challenging.
eSignature exceptions
Even in permissive jurisdictions where eSignature
enforceability is interpreted broadly, eSignatures are
not enforceable for every type of legal instrument. For
example, "the execution of wills, codicils, or testamentary
trusts" and contracts or other records "governing adoption,
divorce, or other matters of family law" are explicitly
carved out from the Uniform Electronic Transactions Act
due to the sensitive nature of those instruments and the
additional evidentiary requirements necessary to enforce
them.
Industry tradition
In addition, certain industries may
choose to implement additional
signing requirements, such as
collecting multiple copies of
original signatures, requiring
original signatures in blue ink
and mandating notarization. Even
where those formalities are not
legally required, institutions may
still require them as a matter of
policy. For example, promissory
notes can be enforced with
eSignatures, but because these
documents have requirements that
there be a "single authoritative
copy," attorneys and financial institutions often choose to
have notes physically signed.
Alignment with attorney workflows
Finally, certain eSignature tools are often incompatible
with the workflows attorneys use to sign and close
complex transactions. Attorneys will care little about the
enforceability of eSignatures if they cannot effectively
F E A T U R E S
"Many
transactional
attorneys do not
take the time to
learn about the
enforceability of
eSignatures."
