The huge advancements in digital technology that have taken place over the last 20 years have completely revolutionized nearly every aspect of human living, from communication to exercise. As such, it should come as little surprise that in recent years there has been a surge in the number of firms and jobseekers that use this technology to form legal contractual agreements without either party ever even needing to meet face-to-face. A federal law known as the Electronic Signatures in Global and National Commerce Act (ESIGN) has made electronic signatures just as valid as those signed in the hand of those agreeing to a contract. Additionally, 47 U.S. states have adopted the Uniform Electronic Transactions Act (UETA), which validate electronic contract signatures on an in-state level.
Before you rush out to purchase the systems necessary to implement electronic signatures and contracts into your business, you should first have a solid understanding of each one. An electronic contract is typed up on a computer just like any other paper contract, but instead of having to meet with a potential employee in person to seal the deal, it is written, sent and signed entirely by electronic means. Both parties must acknowledge a user agreement before the software can be used.
When it comes time for someone to sign a contract electronically, the basic principle is the same as with paper documents. You can ask that people type their initials for various stipulations, type their full names or even copy and paste images of their written signatures.
While these electronic contracts and signatures may all sound wonderfully useful and convenient, the question of the security of people’s private information is likely lingering in the back of your mind. While the aforementioned user agreements are one of the primary layers of protection, cryptography is another method you might choose to add. Such technology allows important electronic information such as signatures to be scrambled upon being sent, which only the receiver can then unscramble. The Public Key Infrastructure is one of the most popular methods of doing this.
Paper Is Still Valid
While ESIGN has legalized and validated the use of electronic means to write, sign and finish contracts, it also provides your potential employees with the right to choose to use the traditional paper method. Therefore, your business is obligated to notify these individuals of whether or not the documents are available in paper form before asking for their consent to use electronic methods. It is important to keep in mind that even if they do grant their consent, they are legally allowed to request a switch later on. Since paper methods are inherently costlier, these prospective employees may be required to pay a fee. People primarily ask for paper due to security concerns, considering that if something like a scanned signature were to be intercepted, it could be used for troublesome purposes.
Be sure that if and when a person gives your business electronic consent, he or she is aware of the scope to which the consent applies as well as the hardware and software requirements for properly completing the documents. There are still certain documents that are legally required to be completed using paper means, including:
•Wills and testamentary trusts
•Family law agreements
•Notifications discussing termination of benefits for life or health insurance
More and More Applications
While these electronic contract and signature methods are great for streamlining the employment process, such methods are also being applied elsewhere. The Government Paperwork Elimination Act, for instance, requires and incentivizes governmental agencies to make the switch away from paper, meaning that your business’s registration, tax forms and more can be filed online. The number of ways in which digital technology is advancing business practices increases daily. Be sure that you keep up with them to maintain that critical competitive edge.
The content on our website is only meant to provide general information and is not legal advice. We make our best efforts to make sure the information is accurate, but we cannot guarantee it. Do not rely on the content as legal advice. For assistance with legal problems or for a legal inquiry please contact you attorney.