In today’s digital world, many transactions across all industries have migrated online. To keep pace with this shift, electronic signatures have become common and legally recognized. If you are wondering when and how you can use electronic signatures, this blog will guide you through the key points of legal applicability and best practices.
Important Laws for Digital Signatures
The use of electronic signatures is governed by both federal and state laws:
- The Federal E-SIGN Act (Electronic Signatures in Global and National Commerce Act): Passed in 2000, this federal law ensures that electronic signatures are legally binding and enforceable if certain conditions are met. E-SIGN applies to all U.S. states, including Virginia, and covers interstate commerce transactions.
- The Uniform Electronic Transactions Act (UETA): Virginia adopted UETA in 2000 (as the Virginia Uniform Electronic Transactions Act), which provides a framework for electronic records and signatures within the state. UETA allows for the use of e-signatures in transactions as long as both parties agree to conduct business electronically.
In fact, the code provides for legal recognition if:
- A record or signature may not be denied legal effect or enforceability solely because it is in electronic form.
- A contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation.
- If a law requires a record to be in writing, an electronic record satisfies the law.
- If a law requires a signature or provides for certain consequences in the absence of a signature, an electronic signature satisfies the law. (See Va Code § 59.1-485).
When Can You Use Electronic Signatures in Virginia?
An electronic signature is defined as “an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record” (Va. Code § 59.1-480(8). This broad definition gives individuals ample ways to “sign on the dotted line” without breaking out pen and paper. In fact, electronic signatures are widely accepted in Virginia across most industries. Here are some common examples of when you can expect to use e-signatures:
- Business Contracts and Agreements. Almost any contract that requires a signature can be signed electronically. This includes employment contracts, sales agreements, and service agreements.
- Real Estate Transactions. Electronic signatures are valid for most real estate transactions. Buyers, sellers, real estate agents, and brokers can (and often do) use e-signatures for documents like purchase agreements, addendums, lease agreements, and disclosures.
- Consumer Agreements. Buying something online? Consumer agreements such as online terms of service, privacy policies, subscription agreements, and financial contracts are most often signed electronically. Virginia law recognizes e-signatures as valid, provided the consumer agrees to sign electronically.
- Government Forms. While the government is not known for being on the cutting edge of technological adaptation, certain government forms can be signed electronically. For example, filing and signing tax returns can be done entirely electronically, as can setting up a business with the Virginia State Corporation Commission.
- Healthcare and Insurance. Healthcare providers in Virginia can use e-signatures for patient consent forms, medical records, and insurance documents. The healthcare industry is heavily regulated, so providers must ensure compliance with federal laws such as HIPAA (Health Insurance Portability and Accountability Act) alongside state regulations.
Best Practices for Using E-Signatures in Virginia
If you are planning to use electronic signatures in Virginia, here are some best practices to follow:
- Ensure Consent: Both parties must consent to the use of e-signatures in the transaction. This can be done by simply including a clause in the contract stating that the parties agree to use electronic signatures.
- Choose a Reliable E-Signature Platform: Using a trusted electronic signature service helps ensure that your signatures are secure, time-stamped, and verifiable. E-signature platforms can typically provide document history that tracks when and by whom a document was signed, which can be valuable in the event a dispute occurs.
- Keep a Record: Store electronic records of any signed documents like you would with any physical, paper documents.
- Comply with Industry Regulations: Especially if you’re in a regulated industry such as healthcare or finance, ensure that your use of e-signatures complies with all relevant laws and regulations, including any data privacy laws.
Electronic signatures are widely accepted in Virginia for many types of transactions and agreements, offering both convenience and efficiency in the digital age. If you have questions about when and how to use electronic signatures, the attorneys at Way Law can help! We’ll make sure you have the appropriate understanding of applicable laws and developing best practices to confidently use e-signatures in your day-to-day business operations!