Using E-sign in Your Business, Double Check You Have the Proper Consent

TMHA was made aware of a concern that some of the necessities required as a prerequisite to using electronic signatures (e-sign) are not understood.  Make sure you know what you need so your e-signed contracts are enforceable.

The Electronic Signatures in Global and National Commerce Act (E-Sign Act), has been the law now for nearly a quarter-century.  And the law is relatively simple and has significantly changed the contracting landscape for the past 24 - years. The E-Sign Act allows the use of electronic records to satisfy any statute, regulation, or rule of law requiring that such information be provided in writing. 

But there is one major precondition to having the convenience option to use e-sign - the consumer must first affirmatively consent to such use (and then does not withdrawn their consent).

In order to get valid consumer consent, a notice must be provided that clearly informs the consumer:

• of any right or option to have the record provided or made available on paper or in a non-electronic form, and the right to withdraw consent, including any conditions, consequences, and fees in the event of such withdrawal;
• whether the consent applies only to the particular transaction that triggered the disclosure or to identified categories of records that may be provided during the course of the parties’ relationship;
• describing the procedures the consumer must use to withdraw consent and to update information needed to contact the consumer electronically; and
• informing the consumer how the consumer may nonetheless request a paper copy of a record and whether any fee will be charged for that copy.

Your typical “off the shelf” providers and vendors that provide the software needed to use e-signatures will have the necessary notice and consent disclosure.  But it is important to know that the consumer notice and consent is not optional, but rather mandatory if you want valid e-signed documents.

Texas also has state law on e-signatures in the Texas’ Uniform Electronic Transactions Act, Chapter 322, Business and Commerce Code.

TMHA developed a Consumer Consent and Information Notice form for our members to use.  And again, most vendors provide this critical step, so the basic rule of thumb to anyone using e-sign – “don’t skip the notice step.”