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Electronic Signatures in Global National Commerce Act (ESIGN)

Definition - What does Electronic Signatures in Global National Commerce Act (ESIGN) mean?

The Electronic Signatures in Global National Commerce Act (ESIGN) is a U.S. federal law law that gives equal value to electronic signatures and handwritten signatures in contracts. ESIGN is the result of the increasing use of electronic records.

This law mandates that contracts can be electronically signed and executed, which legally binds the signee to the same responsibilities of a hand-signed contract. By hitting the “I Accept” button, individuals also acknowledge that they understand they are signing a legal contract and commit to all requirements outlined therein. ESIGN also outlines the validity of electronic signatures.

ESIGN is also known as the Electronic Records and Signatures in Commerce Act.

Techopedia explains Electronic Signatures in Global National Commerce Act (ESIGN)

With a digital signature and a pen-and-ink signature, President Bill Clinton signed the Electronics Signatures Act into law in 2000. Since then, safeguards have been put into place throughout the U.S. marketplace, including personal identifiers, which are used in with electronic signatures to guard against fraudulent signatures.

ESIGN does not require that individuals electronically sign legal contracts. Individuals may print contracts and handwrite their signatures. Through cryptography, digital signatures are tied to an electronic contract by unique electronic identifiers that correlate with an individual’s electronic signature. While written signatures can easily be duplicated, digital signatures require much more sophistication and cunning, due to electronic tie-ins. However, one of ESIGN's weaknesses is that the term "electronic signature" is not clearly defined.

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