Compliance with the e-signature laws is a very basic step in defining an electronic transaction system. Like paper documents, electronically signed documents can become the subject of a dispute. The facts surrounding the signature process must provide enough proof to uphold the transaction in the event of repudiation of an electronically executed contract. Compliance with ESIGN is necessary, but not sufficient. As the one of the functions of electronic signatures is evidentiary, how can one ensure that electronically executed documents are admissible into evidence?
Admissibility into Evidence
The Federal Rules of Evidence and the Uniform Rules of Evidence generally allow for electronic records and their reproductions to be admissible into evidence. Under the Federal Rules, a “writing” or “recording” includes computerized records.

The “Best Evidence Rule” provides that in order to prove the content of a writing, the original writing is required. An “original” is defined as the writing itself or any counterpart intended to have the same effect by a person executing or issuing it. If data are stored in a computer or similar device, any printout or other output readable by sight, shown to reflect the data accurately, is an original.

The Federal Rules require that all documentary evidence be presented in admissible form, including that the evidence must be properly identified and authenticated. The party seeking to introduce an electronic record into evidence must present declarations or other evidence showing that the document is what it is purported to be. Authentication may require evidence proving the genuineness of signatures or a declaration from the document’s custodian laying a foundation for admissibility. Genuineness is provable based on the character of the signature, and the elements of character will be established by the facts surrounding the signature event.

In the case of an electronic signature, then, it is important to demonstrate to the satisfaction of the finder of fact that (a) the appropriate level and amount of information surrounding the signing process was retained, and (b) the system used to retain the information is itself reliable.

Additional requirements arise in a situation where two substantively different documents purport to genuine. The finders of fact will seek to determine the identity of the true “original” document. In the paper/ink world, this would be accomplished in part by expert testimony about the handwriting, paper and/or ink when comparing the two documents. Where the documents are electronic, the proof will lie in the logs, timestamps, encryption/hashing, etc. associated with the creation and storage of the document and signature(s).

Further, chain of custody will be critical for persuasive argument that the document introduced is the true original, or a true copy thereof. If the current custodian is also a party to the litigation, there will be higher burden on that party to demonstrate that the document has not been altered. Any proof offered must relate specifically to the record whose veracity is at issue. However, where a secure, third-party electronic signature system is used to create and store the electronic record, the burden on the defending party is reduced substantially, often allowing the party to merely demonstrate that the system can reliably produce a verifiable copy of the original signed document.

The factors to consider include, at a minimum: fulfillment of the original writing requirement, presentation in admissible form, retention of appropriate information regarding the signing process, and reliability of the system used to retain the information. Of course, specific relationships with third party providers and/or vendors, if applicable, will change the burden on the challenging party.

DocuSign’s electronic signature and electronic contract execution solution is one of the few that addresses all of the above. Before signing the document which fulfills the original writing requirement, DocuSign includes an authentication process that satisfies the presentation in admissible form requirement. DocuSign also retains logs regarding the signing process and custody of documents throughout the electronic contract execution process, reducing the burden on the defending party.

 

 

 

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