E-Signature, An Overview of Legal Validity And Case Law: Exploring the adoption, use, and verification of digital and electronic signatures in a statutory and case law framework.

1. CLE Webinar | eSignature: An Overview of
Legal Validity and Case Law
Winter 2017
Damon Mino, Director, Legal Industry
Rachel Stoermer, Senior Corporate Counsel

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DocuSign is the fastest most secure
way to make every agreement and
approval digital, so you can keep life
and business moving forward.

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Your Hosts
Rachel Stoermer
Senior Corporate Counsel, DocuSign
• Responsible for technology transactions
and electronic signature legality and
adoption
• JD, University of Washington
• Masters Degree, Public Affairs
• Microsoft, aQuantive, Inc., DocuSign
Damon Miño
DocuSign Director Legal Industry Vertical
• Responsible for DocuSign’s Solution for
Law Firms
• JD, Northwestern University School of Law
• Formerly In-House IP Licensing Attorney
• Ariba, 3-PAR, LinkedIn, DocuSign

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Contents
• What is an eSignature
• eSignature Law Overview
• US Statutory Analysis
• International Landscape
• Practical Considerations
• What do Courts Say?
• DocuSign as an Example
• Case Law & Concepts
• Conclusion
• Resources
DOCUSIGN INTERNAL

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Electronic Signatures are Everywhere and Come in Many Forms
An electronic signature is
an “electronic sound,
symbol or process,
attached to or logically
associated with a contract
or other record and
executed or adopted by a
person with the intent to
sign the record.”
-15 USC 7006 (ESIGN Act)
Electronic signatures do not need to look like a handwritten signature!

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Legal Foundation for Electronic Contracts and Signatures
Common Law: contract formation based on
offer, acceptance, consideration.
Legislation
• United States (state and federal)
‒ UETA
‒ ESIGN
• International
‒ eIDAS (EU Regulation No 910/2014)
‒ Electronic Transactions Act (UK)
‒ Uniform Electronic Commerce Act (Canada)
‒ 1996 UNCITRAL Model Law on Electronic
Commerce
‒ 60+ countries have laws enabling electronic
signatures

7. US Framework

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US Framework
• UETA: Uniform Electronic Transactions Act
‒ Drafted by Uniform Law Commission in 1999
‒ Response to states passing inconsistent laws
‒ Amends state laws that require “writing” or “signature”
‒ Quick, yet inconsistent adoption
‒ Now adopted in 47 states + DC, Puerto Rico, Virgin Islands
‒ NY, WA, and IL also have laws permitting electronic signature
that aren’t based on UETA
• ESIGN: Electronic Signatures in Global
and National Commerce Act
‒ Passed by Congress in 2000
‒ Federal version of UETA
‒ Introduced consumer protection
‒ Preempted nonconforming state laws

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General Rules of Validity in US
Central concepts of UETA, ESIGN, and other
state laws:
A signature, contract, or other record related
to any transaction may not be denied legal
effect, validity, or enforceability solely
because it is in electronic form.
1. No specific technology must be used
2. Permissive rather than proscriptive
3. National application and preemption

10. International Landscape

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Brief History of the Electronic Signature: International Stage
Late 1990s
International push
towards electronic
signature legislation
Today
eIDAS
1998 - Late 2000s
Development of a number of country laws to
recognize and adopt e-signatures including:
• UNCITRAL MLEC, 1996 (U.N.)
• European Directive 1999/93/EC (EU)
• Electronic Transactions Act 1999 (AUS)
• Electronic Communications Act 2000 (UK)
• UNCITRAL MLES, 2001 (U.N.)
• Law of the People’s Republic of China on
Electronic Signatures, 2005 (CHN)

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International Landscape: Common Law Countries
Common law jurisdictions follow a
“minimalist” model where
electronic signatures hold the
same legal weight as handwritten
signatures
Examples of common law countries
include:
• US
• Canada
• UK
• Australia

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International Landscape: Civil Law Countries
Civil law countries follow a multi-tiered
approach modeled on the 1996
UNCITRAL Model Law on Electronic
Commerce:
1. “Simple” electronic signature:
admissible as evidence, sufficient for
commercial transactions
2. “Qualified Electronic Signature”
(QES): Evidentiary presumption and
required for certain purposes
Examples of civil law countries:
• Most of Europe
• Most of Latin America
• Most of Asia

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More on Electronic Signature vs. Digital Signature
An electronic signature is any
electronic means of signing.
Digital signatures are uncommon in
the United States, but are the
industry standard in some civil law
jurisdictions and regulated
businesses.
A digital signature is a specific
type of electronic signature
that requires a certain
encryption scheme; a public
and private key pair.
Traditionally this has required
smartcards or other personal hardware
technology, but recent legislation like
eIDAS now recognizes cloud-based
solutions.
Digital
Signature
Electronic Signature

15. eIDAS paves the way for a
unified EU eSignature
market
Legitimizes Cloud-based
signatures by removing
smartcard requirements
Enforces Pan-EU Interoperability
(July 1st, 2016)
Mandatory Adoption by all
Member States

16. Practical Considerations

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Practical Issues using Electronic Signature
Legal Sufficiency vs. Enforceability
• UETA and ESIGN answer the question “is it a signature?”
• They do not answer the question “is it your signature?”
‒ Attribution will be a matter of fact, just as it is with a
wet signature
Evidence
• Admissible under FRE, but subject to the same rules
‒ Lorraine v. Markel American Insurance Company, 241 FRD 534
(D. Md. 2007)
• Electronic process often provides more evidence than a
paper process
‒ Time and Date stamp, IP address, email access, etc.

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Considerations in Implementing Electronic Signature
Are my documents excluded from
ESIGN and UETA?
• Can they be electronically
signed/recorded under some other rule
or statute?
‒ Probate law (electronic wills permitted
in Ohio, little case law elsewhere)
‒ Court rules
‒ Portions of the UCC
How will our process address:
• ESIGN Requirements
‒ Consumer Consent (when it applies)
‒ Notice and Delivery
‒ Recipient’s right to retain copies

19. What are Courts Saying?
DocuSign as an Example

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DocuSign As an Example
100M+
Users
900K
Documents
Signed Per Day
Valid in Common Law
and Civil Law jurisdiction
188 Countries
43 Languages
Over 12+ Years
11 Court Cases

21. “Because the documents were signed
electronically through a company called
DocuSign, plaintiffs were able to show the
precise moments that these documents were
created, electronically delivered and signed.”
Sollner v. Linton (2014 Cal. Super. Ct. July 2014)

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The Keys to Enforceability
Identity
Doc Security

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Identity
2. Audit Trail1. Signer Identity
ID Check
Electronic
Notary
Access
Code
SMS
Phone
Digital
Cert
Primary Multifactor add-ons
Email
Address
Federated/S
SO
DocuSign
Account
KBA or
In-Person

24. What are Courts Saying?
Case Law & Concepts

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Sufficiency of Electronic Signatures and Records
Barwick v. GEICO (2011 Ark. 128)
Arkansas Supreme Court rejected argument that
electronic waiver of medical benefits was not a “signed
writing”, citing the plain language of the Arkansas UETA.
Electronic Signatures meet Statute of Frauds writing
requirements
• Shattuck v. Klotzbach, 14 Mass. L. Rep. 360 (Super.
Ct., Mass., December 11, 2001);
• Rosenfeld v. Zerneck, 4 Misc. 3d 193, 776 N.Y.S.2d
458 (Sup. Ct., Kings Co. 2004) (but see Vista
Developers Corp. v. VFP Realty LLC, 17 Misc. 3d 914,
847 N.Y.S.2d 416 (Sup. Ct., Queens Co. 2007) –
Signed emails could be used to prove the existence
of a real estate contract.

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eCommerce: Clickwrap and Browsewrap Agreements
Fteja v. Facebook
Online terms held to be enforceable where:
• Terms presented in hyperlink immediately below “Sign Up” button
• Sign Up process involved multiple steps
The fact that Facebook did not force Fteja to review the terms was
considered irrelevant
Jerez v. JD Closeouts
Online terms held to be unenforceable where:
• Terms of Sale were not directly referenced in the order process
• Terms were presented only on the “about us” page
The court determined that the contract terms weren’t “reasonably
communicated”
As a general rule,
clickwrap, where the user
takes some affirmative
action, and has reasonable
notice of the contract
terms, has been enforced.
Clickwrap
Browsewrap, where the
terms are available, but
no action is required to
accept or acknowledge
them, are much less likely
to be enforced.
Browsewrap

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Record Integrity
Adams v. Quicksilver. The vendor’s system did
not protect the signed record against post-
execution alteration, and the post-execution
audit trail maintained by the vendor showed
that two Quicksilver employees had accessed
the record after it was first saved and submitted
for storage.
Attribution
Zulkiewski v. General American Life. Under
UETA (Michigan), an electronic signature may
be attributed to a person by “any reasonable
means”. Here, General American used a
combination of email and personal information.
Idle conjecture about impersonation is not
enough to overcome reasonable facts
supporting attribution.

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Proof of Process vs. Physical Document
Person v. Google, Inc.
The court relied on proof of process as opposed to proof by the document itself
to support defense.
Bar-Ayal v. Time Warner Cable Inc.
Clearly presented agreements will be enforced unless unconscionable. Court
accepted a re-enactment of the agreement formation process (where the
plaintiff had to click on the Accept button eight times) in order to refute the
plaintiff’s claim that he never saw the agreement.
Hook v. Intelius
Evidence of process alone is sufficient to support a finding that the process used
is standard in the industry and produces an accurate result.

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Recent Cases
Ruiz v. Moss Bros
(CA Court of Appeal, December 23, 2014)
• The Court refused to enforce an employer’s arbitration agreement, finding that
the employer did not present sufficient evidence that the electronic signature
on the arbitration agreement was “the act” of the employee
• The decision reflected that authentication must be proven (just as it must with a
paper signature) but states that the burden to do so is “not great”
J.B.B. Investment Partners v. Fair
(CA Court of Appeal, December 30, 2014)
• The Court held that the defendant’s typed name in an email did not constitute
an electronic signature under UETA, because there was no demonstration that
he intended to enter an agreement electronically
• The Court acknowledged that consent to do business electronically needn’t be
explicit, but it must be proved nonetheless
The key lesson from these two cases is that the formalities matter.
Failure to keep adequate records or obtain proper consent can impact enforceability

30. Conclusion

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Benefits of Electronic Signature
• Documents can be signed remotely
• Counterparts can be sent simultaneously, but tracked in a single work stream
• Electronic documents can include required fields, ensuring that key
information is filled in prior to completion
• Real time information on status of documents
• Reduced cost and hassle by eliminating paper, mail, couriers, etc.
‒ Improved client experience
‒ Less non-billable administrative time

32. Resources

33. eSignatureLegalityGuide
www.docusign.com/legalityguide

34. Questions?

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FAQ (these are the ones we hear most often from lawyers)
What about notarization?
• E-notary is permitted in the majority of states, but there has been very little adoption
• Only a few states allows remote notary – all other states still require physical presence
• Notarization is often used when not legally required. Electronic alternatives exist that may serve
the same function if notary is used for policy rather than legal reasons
Can agreements be backdated? Or signed in advance?
• Most eSignature solutions record the actual time a signature event occurs. Free form fields may
be used to enter another date, but the audit trail will reflect the real time of signature
• Solutions like “signature page escrow” can be used to collect signatures in advance
How can we ensure the signer actually read the document?
• How do you do it now? No one can be forced to read a document, but you can increase the odds
(or create better evidence) with practices like requiring initials next to key terms
• Make sure it is at least possible to read them – for example, if documents are attached to an
email, make sure the recipient has the right software to open them.