Dec 2, 2015
In the olden days of commerce, one had to go through significant bureaucracy to perform interstate commerce. Today, this is something we take for granted and much of that has to do with the Electronic Signatures in Global and National Commerce Act.
The Internet completely changed much of the business that people do day to day. On the consumer side, this transition looked quite simple. First we began swiping a debit card, then we had Internet access to track our purchases, and finally we are to the point where we need little more than a phone screen to send money to someone else.
Every state in the Union has laws that govern how it handles electronic signatures, which are now a requirement for many transactions we will perform throughout our lives. This includes transmitting data electronically, which is becoming an increasing part of our lives. The ESIGN is the federal law that acts as a guideline to those state regulations.
What the ESIGN does is validate contracts transmitted (wholly or partially) through electronic means. The act specifically prevents someone from challenging the effect, validity, or enforceability of a contract based on how it was transmitted in the first place.
By making electronic documents as valid as their paper equivalents, commerce can continue online without causing any serious legal problems. Congress also took a forward-thinking approach to this document, allowing for the same provisions to apply to global transactions and documentation as well.
About the Author: Samuel Phineas Upham is an investor at a family office/ hedgefund, where he focuses on special situation illiquid investing. Before this position, Phin Upham was working at Morgan Stanley in the Media and Telecom group. You may contact Phin on his Samuel Phineas Upham website or Twitter.