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ELECTRONIC RECORDS AND SIGNATURES -- CHALLENGE AND OPPORTUNITY
New eCommerce laws make possible the
widespread replacement of paper documents with
electronic records. They also enable the broad
use of electronic signatures. Many businesses
have begun converting their operations to avail
themselves of the enormous advantages offered
by electronic records systems.
While the new eCommerce laws permit the use
of electronic records and signatures, they also
require that electronic systems and processes
meet specific standards for:
- Obtaining consent to use electronic records and signatures,
- Presentation of information,
- Execution of signatures and creation of agreements,
- Record retention,
- Printing, and
- Delivery.
Failure to meet those standards may impair the
enforceability of electronic records. As a result,
companies are being forced to invest significant
time, effort and manpower in answering
questions about how to handle the practical,
routine aspects of electronic transactions. Much
of this time and effort could be avoided if
industry-wide standards for these elements of
electronic transactions could be established.
To address this problem, industry leaders have
undertaken a cross-industry initiative to
establish commonly understood "rules of the
road" available to all parties seeking to take
advantage of the powers conferred by ESIGN
and UETA. The product of this initiative is the
Standards and Procedures for Electronic
Records and Signatures ("SPeRS").
WHAT IS SPeRS?
SPeRS is:
- A set of guidelines, procedures, checklists
and strategies for developing systems to
create, deliver, sign, manage and transfer
legally enforceable electronic records and
signatures in commercial and consumer
transactions. Intended to help companies
develop cross-discipline system design teams
for implementing electronic commerce.
- Focused on the behavioral aspects of the
interaction between participants in the
transaction. SPeRS is technology neutral.
SPeRS will:
- Permit businesses to establish a common
understanding with internal team members
and vendors concerning the methodology for
designing eCommerce systems,
- Assist in establishing industry standards for
commercially reasonable, enforceable
structures and processes, and
- Help provide the customer with a “common
experience” across various online
transactions.
WHAT KINDS OF ISSUES DOES SPeRS ADDRESS?
SPeRS’ 30 Standards, and the supporting
checklists, address dozens of issues related to the
use of electronic records and signatures.
Examples include:
- Describing the risks and liabilities
associated with using a PIN or password.
- Obtaining a consumer’s consent to use
electronic records and signatures.
- Selecting a signature process that is
appropriate for the transaction.
- Establishing the intent to sign an
electronic record.
- Effectively delivering information in an
electronic environment.
- Using hyperlinks and other devices used
in referencing, displaying, and drawing
attention to information and disclosures.
- Strategies for effective record retention.
See the attached Table of Contents for more
information.
MORE INFORMATION ABOUT SPeRS
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