UETA Explained: Electronic Signatures and the Uniform Electronic Transactions Act

Recently, I had one of the most frustrating experiences this year (so far): I had to sign a few documents. Now, I don't sign documents often, but I do know a thing or two about the widespread use of electronic signatures.

In addition to that, I work from home and Better Proposals is a global team, so you could say I'm pretty used to online interactions. Knowing all this, you can imagine my surprise when I found out that what I needed to sign were none other than paper documents.

Electronic signature legislation has been around for more than 20 years. There are so many digital signature software options available today. And still, I had to waste time going across town and back just to put my name onto a piece of paper in pen.

Luckily, you can spare your clients from the same frustrating experience by simply giving them the option of using an eSignature. And if you're worried about your electronically signed documents holding up in court, here's everything you need to know.

What is the UETA Act?

Introduced in 1999, the Uniform Electronic Transactions Act (UETA) is a legal framework that ensures the validity, enforceability, and legal recognition of electronic signatures in the United States. In other words, it gives electronic signatures the same legal effect as traditional, handwritten signatures. That said, the validity of your electronic documents depends on whether or not the electronic signature satisfies the following conditions. 

What are UETA electronic signature requirements?

Thanks to the UETA, electronic records and electronic signatures can't be denied legal effect solely because they're in electronic form. However, the law requires electronic signatures to clearly demonstrate:

• Intent to sign. An electronic signature is valid only if both parties intend to sign.
• Consent to conduct business electronically. Both parties must agree to do business electronically.
• Association of an electronic signature and electronic record. An electronic signature must leave a mark on the document and the system used to record the transaction must keep an associated record.
• Record retention. All parties must be able to access the signed document.

What is the difference between UETA and ESIGN?

Both the UETA and the ESIGN Act regulate electronic signatures. So why is there a need for two electronic signature laws in the United States?

The UETA Act is a model law, which means every US state can modify and adopt it according to their own legal requirements. For this reason, its interpretation and implementation can vary from state to state.

On the other hand, the ESIGN Act is a federal law, which makes it applicable nationwide. Its goal is to ensure the same standards for electronic transactions across all states.

In simple terms, this means that each US state can either accept or reject guidelines set by the UETA. However, each state is still obligated to have some sort of law that regulates the validity of electronic signatures. As this opens up room for disputes between different state laws, the ESIGN Act serves as means to resolve them.

Better Proposals keeps your business compliant

Better Proposals makes it easy to collect legally binding electronic signatures. We're compliant with both US and EU legislation, so you can safely create, store, and sign all your electronic documents.

Besides simply collecting electronic signatures, we take extra precautions to make sure you're covered if any disputes arise. This includes recording:

• Signature time and date
• Signer's email address
• IP address from which the signature was given

Final thoughts

We live in a world of remote work, online shopping, and same day deliveries. We also live in a world where we have better options than printing a piece of paper, signing it, and scanning it to send it back. So, to save yourself and your clients from the hassle of paper documents, use an electronic signature platform. Besides making signature collection faster and easier for everyone involved, eSignatures are just as valid as handwritten ones.