We hear a great deal about the increasing acceptance of electronic signature software to indicate approval of contracts between people and businesses of all types.
The advantages have been explored in some detail in other blog posts we have filed, but the extinction of ink-on-paper signatures is still a way down the road.
Keeping real ink relevant, of course, is the fact that by law certain documents may not be signed digitally, largely because of the serious personal nature of the arrangements in question, and the damage that could accrue if fraudulent signatures were applied.
Here is a list of many of the documents that still require an in-person ink-on-paper signature, often in front of a notary public to make sure the person affixing his or her signature is the person responsible:
- Wills, codicils, and testamentary trusts
- Documents involved in adoption, divorce, and other family law matters
- Court orders, notices, and other court documents such as pleadings or motions
- Notices of cancellation or termination of utility services
- Notices of default, repossession, foreclosure, or eviction
- Notices of cancellation or termination of health or life insurance benefits
- Product recall notices affecting health or safety
- Documents required by law to accompany the transportation of hazardous materials.
(List source: Nolo.com.)
Indeed, if you do execute any of these documents on this list digitally, they are invalid and unenforceable (as if they were never signed at all.)
This list is not exhaustive, either. Particular industries may get certain documents exempted from electronic signatures at the state level. For instance, in California (and other states), a handful of disclosure documents involved in a real estate transaction must be signed with ink on paper:
Seller Financing Forms
Seller Financing Addendum and Disclosure (SFA);
Home Equity Contract Forms
Notice of Default Purchase Agreement (NODPA);
Declaration and Proof of Real Estate License (DPL);
Notice of Cancellation of Notice of Default Purchase Agreement (HENC)
Mortgage Loan Disclosure Statement (Borrower) (MS)
Find more details about these documents on this page. Scroll down to find the list, and an explanation about why these particular documents are exempt from electronic signature.
However, for most business-to-business agreements, digital signatures are valid and enforceable, which makes them quite useful in accelerating the “paperwork” part of building a business relationship. That is why they are catching on!