Last Friday saw the dawning of a new era in internet commerce when President Bill Clinton approved a law conferring on electronic signatures the same status as those written in ink.
The Electronic Signatures in Global and National Commerce Act, approved in June by both houses of the US Congress, allows consumers and businesses to sign cheques, and complete applications for loans or services without need for a paper signature. It also removes the legal barriers to signing electronic contracts, collecting and storing documents and sending notices and disclosures. The move is regarded as crucial for the expansion of internet-based commerce.
Americans will soon be able to use digital signatures "for everything from hiring a lawyer to closing a mortgage," declared the president, adding that "under this landmark legislation online contracts will now have the same legal force as equivalent paper contracts." He signed the bill electronically using an encrypted smart card, then appended his signature in the time-honored way. He underscored the event’s importance by approving the bill in Philadelphia, where the Declaration of Independence was signed over two hundred years ago.
E-commerce specialists predict that the new law will have far-reaching long term effects, eliminating paperwork and saving billions of dollars on transactions ranging from stock purchases to mortgages. However, they also warn that several years could elapse before companies convert their paperwork into compatible electronic formats.
News source: Financial Times