The validity of electronic signatures has been tested in court, with the most notable case being Banc of America Merchant Services (BAMS) vs. IO Moonwalkers. In this case, Moonwalkers denied that they had electronically signed a contract with BAMS, but BAMS submitted DocuSign records that showed the date and time when a person who used the Moonwalker company email saw the contract, signed it and saw the final version, fully executed. The court held that the evidence confirmed that Moonwalkers had ratified the contract, but noted that DocuSign records alone did not determine the validity or binding nature of the contract.
It is important to weigh the convenience of electronic signatures against these potential problems, especially in large transactions that could end in litigation. Professionals should ensure that all requirements of federal and state electronic signature laws are met and that there is extensive evidence to support the company's authentication process. Companies should also consider using an electronic signature company such as DocuSign, since courts have already ruled that a signature with DocuSign is presumably valid. Additionally, companies should consider automatically sending emails to all parties and interested parties once a document has been executed and saving any signed documents to a document management system.
In conclusion, electronic signatures are legally binding and will remain in court as long as they can be authenticated. Companies should take steps to ensure that all requirements of federal and state electronic signature laws are met and that there is extensive evidence to support their authentication process.
