Valid E-Signing in California
Section 1633 of the California Civil Code provides that an electronic signature or "E-signature," is as valid as a "wet signature" on a document.
Section 1633 has three dry, legal requirements for what constitutes a valid signature.
- that the signer intends to sign the electronic record,
- that the parties agree to transact via electronic means, and
- that the electronic signature is authenticated correctly. But what does this mean, and more importantly, how can a business be sure this has been done?
Intent to Sign An Electronic Record
A 2014 case, Ruiz v. Moss Bros. Auto Group, Inc. 232 Cal App. 4th 836, held that a party must be able to show that the signature was placed electronically on the date and time by the alleged signer with the intention of signing that document. A date and time stamp are insufficient. Unlike an ink signature, an e-signature can be placed with a click, and so there must be other indicia of intent.
Agreement to Transact Via Electronic Means
Paradoxically, parties must agree via a document that they both agree to sign electronically with a document that may be signed electronically. The usual way this is done is by inserting a clause into the contract or document to be signed, acknowledging that the parties jointly and severally agree that an electronic signature is acceptable to all parties; the signatures then act as the agreement.
How to Authenticate?
A recent Connecticut case, Designs for Health, Inc. v. Miller, 201 A. 3d 1125 (2018) underscored the need for a reliable audit trail showing that all parties have signed the document using the same method or application. California has not fully committed to DocuSign as the final arbiter of reliability for electronic signatures. Fabian v. Renovate America, Inc., 42 Cal. App. 5th 1062 (2019). This case shows that merely using an app like DocuSign is not sufficient. The audit trail showing how the document was relayed between the parties is essential to show all parties signed before the document can be said to be fully "signed." These three elements intertwine in a way that may seem impenetrable to the layperson.
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