Who hasn’t at some point in time been asked to agree on line to the terms of service for using an App or to approve the terms of


a contractual agreement for the purchase of something. No hand-written signature is required to create a legal obligation. This is the world of electronic signatures–a world, by the way, that started way back in 1844 with the advent of the telegraph. The problem back then was that the telegraph wasn’t effective for consummating business transactions because it was not possible to readily verify that the signature on the telegram was that of the person’s name appearing at the bottom of the message.

Slowly, but surely, the usage of electronic signatures in commercial transactions has grown, particularly with the enactment of both federal and state statutes and statutes in other countries. Arizona has its own Arizona Electronic Transactions Act, which defines an “electronic signature” as an electronic sound, symbol or process that is attached to or associated with a record containing information that is inscribed on a tangible medium or is stored in electronic medium that is retrievable.

Of course, there are still legal issues and disputes that arise. Many of these issues seem to revolve on whether a party consented to the use of the electronic medium or whether the way a name appears in a document constitutes an electronic signature.

And of course, some banks and other financial institutions seem uncomfortable in dealing with an electronic signature transactions, particularly as to whether the name appearing on the signature line is actually that of the contracting party as they have traditionally dealt with paper signatures.

That leads to the question as to whether all electronic signatures are equal. And the answer is no, as a greater degree of certainty as to the legitimacy of electronic signatures can be achieved by utilizing digital signatures. Digital signatures utilize an encrypted technology that can be likened to providing the certainty of a passport. This offers greater security and confidence in a transaction utilizing electronic systems.

I think the dye is cast, and the use of electronic signatures will increase and enhance commercial transactions not only here in Arizona, but throughout the U.S. and the rest of the world. In some ways, it is surprising that this usage has not occurred at a faster rate in light of the many advantages offered.

Michael Margrave