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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.
WHAT IS SPeRS 2.0?
The
updated Version 2.0 focuses on certain select legal, regulatory and
business development since 1.0 was issued. While there has been no need
to alter the standards provided by the original text, the new version
does reflect a number of developments since the original text was
prepared, and such developments have been incorporated into the guidance.
MORE INFORMATION
ABOUT SPeRS
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