Until 1677 and the creation of the Statute of Frauds in England, all contracts could be either written or oral and yet be equally binding on the parties. After 1677, the law required certain types of contracts (such as contracts to buy or sell land) to be both made in writing and executed with the physical signatures of all of the parties involved. At any time thereafter, either party could challenge authenticity of the physical signature of his/her own handwriting or the handwriting of the other party. Recently, with the increase of eCommerce, electronic signature (non-physical) has become as equally binding as the physical signature with severe limitation allowed in challenging the authenticity. Has this developed out of necessity, or have we simply moved too far with the law accommodating the digital age?
Law and the Digital Age
With the globalization of the modern world, electronic commerce is rapidly becoming an essential and normal part of our daily lives. Today most people prefer to shop, conduct their businesses and manage finances over the internet. However, Cheeseman (2013) argues that although electronic commerce is gaining huge popularity due to its convenience and ease of doing business, it faces several challenges, one of them being the fact that it provides very little information about the person with which one could be interacting or transacting online. According to Krohm (2002), business to business transactions and retail transactions that are legally sensitive usually depend on the use of secure identifications of documents and people. Based on this understanding, there is an urgent and legitimate need for modern electronic commerce transactions to be undertaken in a secure manner and for the parties involved to verify exactly who is entering into a given contract. However, the increased use of electronic commerce has led to the growing use of non-physical signatures such as electronic signatures, which have become equally binding like the traditional physical signature. These occurrences pose the question of whether these developments have occurred out of necessity, or is it a case of the law advancing too far to accommodate the digital age?
The rapid growth of electronic commerce has meant that the existing legal infrastructure is not well developed to deal with the changing eCommerce environment and also regulate the resulting transactions. According to the Uniform Computer Information Transactions Act, popularly known as the UCITA, there should be uniform legal rules that advocate for the formulation and the enforcement of any electronic contract or license (Dhooge, 2013). However, although the UCITA has not been widely accepted, the legislation provides the foundation for many states within the united states that have come up with their laws concerning electronic commerce.
The common understanding is that since the existing legislation is unable to regulate electronic commerce transactions effectively, then the binding established through the mutual agreement between the transacting parties holds merit (Dhooge, 2013). Although they are not physical signatures, electronic signatures do have the same authority as a pen inscribed signature, which makes them equally binding. Any contract entered through an electronic signature requires the transacting parties to provide their proof of identity (Dhooge, 2013). By undertaking these steps, such an arrangement would ensure that transacting individuals are actually who they claim they are. It also ensures that these individuals consent to undertake legal accountability, especially if such a contract is violated (Dhooge, 2013). These requirements that come with an electronic signature are very crucial because they verify the real identity of the individuals entering any contract, while also signifying the existence of a mutual agreement and confirming the genuineness of their consent.
In conclusion, increased use of electronic commerce has led to the growing use of non-physical signatures such as electronic signatures, which have become equally binding like the traditional physical signature. However, their severe limitations have been allowed in challenging their authenticity. This development can be argued to have occurred out of necessity because the existing legislation is unable to regulate electronic commerce transactions effectively. Until when uniform regulations on electronic commerce transactions are undertaken, the use of electronic signatures will remain critical to the enforcement and security of future electronic contracts.
References
Cheeseman, H. (2013). Business Law (8th ed.). New York, NY: Pearson.
Dhooge, L. J. (2013). undefined. American Business Law Journal, 50(1), 43-62. doi:10.1111/ablj.12004
Krohm, G. C. (2000). Electronic Signatures: A Lynchpin for E-Commerce?. CPCU Journal, 53(3), 187.
