Cool Gadgets: Apple iPad, iPhone 4, Droid 2

While Apple’s iPad came out in the spring, the iPad continued the buzz this summer! With Designed for Mobile, you can use electronic signature from DocuSign on Blackberry, iPhone, iPad, Android and Windows Mobile phones.

However, the iPad’s size and utility means that you can create envelopes on the iPad with templates enabled, or send for electronic signature with Freeform signing. Take a look at this blog post if you want to use DocuSign on your iPad!

A Feature Friday blog post also highlighted another way you can use DocuSign if you get an email attachment that needs electronic signatures, with Email to Electronic Signature. Of course, you can also use this feature on your desktop or laptop as well as your iPad!

Ensuring Your Electronic Signature Stands Up in Court

Ken Moyle, DocuSign’s Vice President of Legal and Corporate Affairs and Chief Legal Officer, shared thoughts regarding issues your should consider so that your electronic signature will stand up in court.

When you do business electronically, you should anticipate the need to produce evidence that proves a given person signed a given electronic document on a given date. That means you should look at taking such steps as:

For the rest of Ken’s commentary, take a look at the blog post which also shares authentication and electronic signature process considerations to note when selecting a vendor.

Our real estate team is also excited to make a special offer to new subscribers – between now and Labor Day, get a $20 Visa® gift card when you sign up for a DocuSign prepaid annual plan! Members of NAR should sign up with their NRDS numbers to take advantage of their special pricing.

Enjoy the last days of summer!

Want to use e-Sign on Your iPad?
Doug Rybacki, director of product management for DocuSign, confirmed that DocuSign subscribers can create DocuSign envelopes on the iPad and it works well for templates and sending for eSignature with Freeform signing. Stay tuned for more information about DocuSign’s upcoming DocuSign for iPad app and click the link above to learn how!

Of course, not everyone has an iPad or iPhone – we also offer the ability to use electronic signature on other mobile devices.

Want to use Electronic Signature on Your Mobile Device?
With “Designed for Mobile,” all DocuSign electronic signature service subscribers can access their DocuSign console from their iPad, iPhone, BlackBerry, Windows Mobile, and Google Android devices, which earned us finalist status at the Stevie Awards.

FHA and Lender Acceptance of Electronic Signature
Earlier this spring, the FHA has issued a mortgagee letter, clarifying FHA acceptance of electronic signature. Ken Moyle’s blog post on this topic from 2009 continues to be popular, especially with answers to situations around lender acceptance, such as:

My mortgage broker says the lender won’t accept electronic signatures

A few lenders have some policies in place that restrict electronically signed documents, but not all documents in a mortgage application file are the same. There is a difference between a mortgage closing document (such as an electronic note) and a supporting document (such as a real estate contract, addendum or disclosure). Supporting documents represent contracts between consenting parties that have already been consummated and are not part of the closing process. It is unusual for a lender to interfere with a real estate transaction by asking for it to be re-executed. Ask the broker or lender to clarify their position and to make sure they have all the information they need to make that assertion.

If you are unable to get your lender to accept a DocuSigned contract as part of a mortgage application, please immediately send the lender name and contact info to legal@docusign.com.

Ensuring Your Electronic Signature Stands up in Court
Ken Moyle, DocuSign’s Vice President of Legal and Corporate Affairs and Chief Legal Officer, has also shared his thoughts regarding issues your should consider so that your electronic signature will stand up in court.

When you do business electronically, you should anticipate the need to produce evidence that proves a given person signed a given electronic document on a given date. That means you should look at taking such steps as:

• Including authentication procedures to verify the identity of the signatory
• Maintaining evidence of the particular electronic document that was signed electronically
• Maintaining evidence of the electronic process that was followed in obtaining the electronic signature on the electronic document

For more information on any of these topics, click the links to read the complete posts. You can also sign up for a free electronic signature trial!

Question: While legally binding, electronic signatures are not recognized as sufficient evidence of an arrangement under current software revenue recognition rules. Does DocuSign have any information on any anticipated changes to those rules?

Answer, from Ken Moyle, DocuSign’s Chief Legal Officer:

Please ask your accounting advisers or auditors to produce the accounting rule or bulletin that supports the statement that “current software revenue recognition rules do not recognize electronic signatures as sufficient evidence of an arrangement.” There are some very large software companies that would be very interested to hear that their click-through and click-wrap agreements, while enforceable worldwide, are somehow not adequate to recognize revenue!

If the statement is based on the likely fact that the revenue recognition rules do not affirmatively deal with electronic signatures, it is incorrect in its assumption that such treatment is required in order for electronic records to be recognized as providing evidence of an arrangement.

Even before passage of the ESIGN Act ten years ago, it has been clear that a signed contract is not necessary to establish evidence of an arrangement. See SAB No. 101, which states in part:

Customary business practices and processes for documenting sales transactions vary among companies and industries. Business practices and processes may also vary within individual companies (e.g., based on the class of customer, nature of product or service, or other distinguishable factors). If a company does not have a standard or customary business practice of relying on written contracts to document a sales arrangement, it usually would be expected to have other forms of written or electronic evidence to document the transaction. For example, a company may not use written contracts but instead may rely on binding purchase orders from third parties or on-line authorizations that include the terms of the sale and that are binding on the customer. In that situation, that documentation could represent persuasive evidence of an arrangement.

But with the passage of ESIGN in 2000 the underlying legal foundation for entering into written contracts electronically has been firmly established. A contract or signature “may not be denied legal effect, validity, or enforceability solely because it is in electronic form”. This simple statement provides that electronic signatures and records are just as good as their paper equivalents, and therefore subject to the same legal scrutiny of authenticity that applies to paper documents. To the extent that evaluating the evidentiary value of a signature on a contract is in the purview of an independent auditor (if it is at all), the weight of an electronic signature should be afforded the same presumptions of authenticity as a handwritten signature. The evidentiary value of an electronically signed contract will, by virtue of its audit trail, often be far higher than anything produced via the typical manual signature process.

In short, there is no accounting rule that precludes electronically signed contracts, and DocuSign would be willing to deliver to your company any necessary assistance in demonstrating the veracity of the process behind the formation of these binding arrangements.

*Ken’s thoughts are shared in accordance with DocuSign’s Blog Disclaimer

From Ken…
When you do business electronically, you should anticipate the need to produce evidence that proves a given person signed a given electronic document on a given date. That means you should look at taking such steps as:

• Including authentication procedures to verify the identity of the signatory
• Maintaining evidence of the particular electronic document that was signed electronically
• Maintaining evidence of the electronic process that was followed in obtaining the electronic signature on the electronic document

In Prudential Insurance Company of America v Dukoff, the US District Court for the Eastern District of New York affirmed the importance of implementing clear electronic transaction procedures. Prudential initiated the action to void a life insurance policy issued on the life of the wife of the defendant and beneficiary on the basis of alleged misrepresentations in the application.

In response to Prudential’s complaint, defendant Dukoff and his wife’s estate filed a counterclaim for the full value of the policy, disputing the charge that it had been procured via fraud. The court was also called upon to consider a host of issues stemming directly from the fact that the application was submitted electronically via what the court called “a standard internet click-through process.”

The defendants argued that a box that was checked at the end of the electronic application process did not constitute a valid electronic signature under New York’s Electronic Signatures and Records Act (ESRA), and thus, Prudential was barred from challenging statements in the application to invalidate the contract.

While the court was unaware of any other court that had addressed the validity of electronic signatures for insurance documents under ESRA, in deference to holdings in advisory opinions by the New York Insurance Department, the court held that Prudential could challenge the statements if Prudential could reasonably identify the person who made them. The court then held that there was a triable issue of fact as to whether the final page of the application, which included personal information inputted by the applicant, sufficiently identified the person who signed the application.

The electronically filed application also raised evidentiary issues with regard to who actually submitted the application and when. According to the court, a computer printout produced by the plaintiff insurer shows the application was submitted on a date suggesting that Mrs. Dukoff did not submit the application. The court concluded, however, that the plaintiff insurer did not offer sufficient evidence to establish that this printout accurately reflects the date of submission.

Considerations When Choosing an Electronic Signature Vendor

Given that you may need to provide evidence that a given person signed a given electronic document on a given day, you should understand your electronic signature provider’s authentication services, the electronic signature capture process and subsequent documentation and the value of selecting a neutral third party provider.

Authentication

DocuSign provides an integrated authentication system that works with the electronic signature process to ensure any level of authentication can be provider and that the authentication provides positive identification of the person signing, NOT the equipment.

DocuSign’s authentication process is designed and architected with no single point of authentication failure. Authentication can be required each time a signer reviews and signs a document, if requested. One authentication session for a document from company “A” does not mean company “B” must rely on that authentication, as is the case with PKI digital certificates.

DocuSign’s Authentication Systems

1. Email Authentication: validates a person’s email address and access to that email address.
2. Access Code Authentication: validates a person’s ability to provide a shared secret or passphrase.
3. ID Check: validates a person’s knowledge based on a knowledge-based authentication process provided by RSA.
4. OFAC Checking: validates whether a person’s name is on the Specially Designated Nationals List administered by the Office of Foreign Assets Control.
5. Age Verification: validates a person’s age is correct as entered.
6. Federated Authentication: accepts and records authentication by another system when integrated with DocuSign. This can be any form.
7. Two Factor Biometric Authentication: validates a person’s phone number and access to that phone number. This authentication process also records a voiceprint of the signer.

Additionally, DocuSign’s authentication system supports a workflow of authentication for integrated customers, enabling decision-making during the authentication process. DocuSign also collects the IP addresses of all users and time stamps all activity into the encrypted, tamper-proof audit trail along with all the authentication results.

The DocuSign Electronic Signing Process

Visible Elements of a DocuSign Electronic Signature:

1. Script Signature Name: The script-written name generated in the DocuSign system by the document signer has legal significance, as the signer is required to agree that the script signature will have the same legal effect as his or her handwritten signature.
2. “DocuSigned By:” Box: Every electronic signature is bordered by a signature block that contains a portion of the signer’s Globally Unique Identifier (GUID) A GUID is a 128-bit number in hexadecimal form, such as { 3F2504E0-4F89-11D3-9A0C-0305E82C3301}, which is created for the signer by DocuSign. This partially visible GUID conceals the full ID.

Invisible Elements of a DocuSign electronic signature:

1. GUID: Each person in the DocuSign system has a unique GUID, a pseudo-random number used in software applications. Each GUID is “mathematically guaranteed” to be unique, based on the principle that the total number of unique keys is so large that the possibility of the same number being generated twice is virtually zero. The full GUID is associated with a user upon authentication and electronic signature creation. The signer – electronic signature association is managed by DocuSign, encrypted and hashed to ensure that it cannot be modified. The hashing process entails the application of an algorithm to the GUID to create a digital representation of the GUID, resulting in a “hash value.” Any change in the underlying document would produce a different hash value, which would be evidence of tampering.
2. Hash of Signature: The entire signature element is stored in the DocuSign system in secure (hashed) format.
3. Signer Certificate: The data structure of the DocuSign system links a signer’s attributes, GUID and signature stamp to ensure that only that particular person ever has access to use that particular electronic signature.

The visible and invisible elements work together to link the person, document and electronic signature in an auditable system. Copying or duplicating only the visible elements of the electronic signature does not compromise the signer’s identity because only the invisible elements are solely under the electronic signature owner’s control.

Due to DocuSign’s strict adherence to the authentication and electronic signature process, which includes the signer’s involvement in creating and placing his or her electronic signature in specified locations on documents, DocuSign enables the most familiar and enforceable process for signers. For more information, take a look at the Electronic Signature Vendor Checklist.

FHA and Electronic Signature

In April 2010, Ken Moyle shared his thoughts immediately after the FHA clarified its acceptance of electronic signature, clarified in the Mortgagee Letter 2010-14. The last time Federal Housing Administration released any formal guidance on electronic signatures was way back in 1996. Since 2008, DocuSign’s real estate and mortgage origination customers have made it clear that FHA urgently needed to update and clarify its position on electronic signatures. And we heard you.

E-signed third-party documents, including real estate contracts, are now being accepted by the Federal Housing Administration (FHA).

Utah Supreme Court Provides Narrow Interpretation to Government Agency’s Right to Reject Electronically Signed Documents

After the FHA affirmed its acceptance of electronic signature, the Utah Supreme Court, issued a 15-page, unanimous ruling [Anderson v. Bell, No. 20100237 (Utah June 22, 2010)], as voters went to the polls for primary elections. Justices stated:

A signature under (Utah law) does not require a signor to physically handle a piece of paper and sign her name with a pen. An electronic signature is sufficient to satisfy the election code.

Ken provided perspective regarding the way the court eloquently and brutally exposed the weakness of the common argument about fraud and electronic signature use, noting that it reads well into the interpretation of UETA in 46 other states:

The Lt. Governor … contends that electronic signatures attached to a certificate of nomination lack ‘apparent authority’ as genuine signatures. This position is based on a theory that a holographic signature is self-authenticating because the reviewing party may merely look at the signature and see that someone put pen to paper to sign their name. In contrast, an electronic signature lacks apparent authority, because it appears as a typed list of names…. We are unpersuaded that an electronic signature presents special concerns regarding candidate fraud; a candidate could as easily handwrite or type fraudulent names onto a certificate of nomination.

Moreover, electronic signatures may be a better deterrent to candidate fraud because an electronic signature incorporates readily verifiable personal, but non-public, information. For instance, the signors of Mr. Anderson’s petition apparently had to enter a security code that corresponds to the last four digits of their drivers license number before their signature would be counted.

Congress Passes Resolution Declaring June 30th National ESIGN Day
U.S. House and Senate Acknowledge the Importance of eSignatures in Today’s Dynamic Business World on the 10th Anniversary of Electronic Signatures in Global and National Commerce Act (ESIGN)

In support of the measure, McDermott stated,

ESIGN has greatly improved the ability of companies in my district to be more effective and competitive in the global marketplace. I would especially like to acknowledge Seattle-based electronic signature platform provider, DocuSign, for being a leader in the electronic signatures and records industry, and for helping spearhead the coalition to recognize June 30 as National ESIGN Day. DocuSign recognizes that the benefits of e-commerce extend beyond the dollar values that are placed on business activity; with over 30,000 current customers, and having served over 4.5 million people to date, DocuSign provides its customers with confidence in the integrity and credibility of emerging electronic capabilities. They have been a leader in removing obstacles and barriers to business transactions online, allowing their customers to work faster, more reliably, and more securely.

In honor of the 10th Anniversary of ESIGN, we hosted the 2010 ESIGN Summit in San Francisco on June 30, 2010, with a live keynote address by President Bill Clinton (via satellite) and presentations from industry visionaries from salesforce.com, the National Association of REALTORS® (NAR), Box.net and DocuSign.

Interesting Facts About DocuSign and Electronic Signature

• Surpassed 4 million electronic signature users and exceeded 78 million eSignature events to date.
• Supports more than 30,000 customers from large enterprise organizations to individual professionals by consistently delivering 99.993% uptime.
• Recognizes and serves specialized customer needs with exclusive tailored editions—DocuSign REALTOR® Edition and DocuSign for Salesforce, DocuSign for Salesforce Real-Time Quotes and DocuSign for Salesforce Chatter Enabled.
• Dominates the SaaS-based eSignature market with an estimated 70 percent market share.
• 66% of U.S. adults wish they could complete and e-sign certain forms and business agreements online

To commemorate the 10th Anniversary of the ESIGN Act and National ESIGN Day, we’ve set a goal of collecting 1,000,000 electronic signatures – we need your help to reach this goal.

Click to eSign the “ESIGN Support Pledge.” You’ll be able to download the document after signing to share via scribd or slideshare – be a part of this historical event and ESIGN today!

As of today, the United States Senate and the United States House of Representatives both passed resolutions at the request of DocuSign® and industry leaders designating June 30 – the date of the historic 10th anniversary of the Electronic Signatures in Global and National Commerce Act (ESIGN) – as “National ESIGN Day.” The resolutions were the result of an effort spearheaded by us, as the leading provider of the most trusted cloud computing electronic signature platform, as a means to acknowledge the vital role of e-signatures in the development and continued growth of interstate and foreign commerce, and commemorate the ESIGN Act, which was signed by President Bill Clinton on June 30, 2000.

Led by U.S. Senator Patty Murray (D-WA) with support from U.S. Senator Maria Cantwell (D-WA) in the Senate and by U.S. Congressman Jim McDermott (D-WA) in the House, the resolutions recognize the previous contribution made by the Congress to the adoption of modern solutions that keep our nation on the leading technological edge, and reaffirms the Congress’s commitment to facilitating interstate and foreign commerce in an increasingly digital world and encouraging more efficient and environmentally-conscious business practices.

In support of the measure, McDermott stated,

ESIGN has greatly improved the ability of companies in my district to be more effective and competitive in the global marketplace. I would especially like to acknowledge Seattle-based electronic signature platform provider, DocuSign, for being a leader in the electronic signatures and records industry, and for helping spearhead the coalition to recognize June 30 as National ESIGN Day. DocuSign recognizes that the benefits of e-commerce extend beyond the dollar values that are placed on business activity; with over 30,000 current customers, and having served over 4.5 million people to date, DocuSign provides its customers with confidence in the integrity and credibility of emerging electronic capabilities. They have been a leader in removing obstacles and barriers to business transactions online, allowing their customers to work faster, more reliably, and more securely.

In honor of the 10th Anniversary of ESIGN, DocuSign hosted the 2010 ESIGN Summit in San Francisco on June 30, 2010, with a live keynote address by President Bill Clinton (via satellite) and presentations from industry visionaries from salesforce.com, the National Association of REALTORS® (NAR), Box.net and DocuSign.

Ken Moyle, chief legal officer at DocuSign, commented:

Electronic signatures have created boundless opportunities to transact business in more efficient and environmentally friendly ways, and we appreciate that the United States Senate has renewed its support for the advancement of e-commerce. DocuSign supported this resolution to celebrate the advancements that have been made in the past 10 years, and more importantly, to encourage even more rapid adoption of electronic signatures in order to eliminate the time, expense and environmental impact of printing and signing paper documents.

Video of Representative McDermott’s Remarks

Today, the United States Senate passed a resolution (S. Res. 576) at our request, designating June 30, 2010 – the date of the historic 10th anniversary of the Electronic Signatures in Global and National Commerce Act (ESIGN) – as “National ESIGN Day 2010.” The resolution was the result of an effort spearheaded by DocuSign, leading provider of the most trusted cloud computing electronic signature platform, as a means to acknowledge the vital role of e-signatures in the development and continued growth of interstate and foreign commerce, and commemorate the ESIGN Act, which was signed by President Bill Clinton on June 30, 2000. The United States House of Representatives is anticipated to vote on similar legislation, which is being led by U.S. Congressman Jim McDermott (D-WA), this week.

Introduced during the 111th Congress by U.S. Senator Patty Murray (D-WA) with support from U.S. Senator Maria Cantwell (D-WA), the resolution recognizes the previous contribution made by the Congress to the adoption of modern solutions that keep our nation on the leading technological edge, and reaffirms the Congress’s commitment to facilitating interstate and foreign commerce in an increasingly digital world and encouraging more efficient and environmentally-conscious business practices.

In honor of the 10th anniversary of the ESIGN Act on June 30, 2010, DocuSign hosted the 2010 ESIGN Summit in San Francisco on June 30, 2010, with a live keynote address by President Bill Clinton (via satellite) and presentations from industry visionaries from salesforce.com, the National Association of REALTORS® (NAR), Box.net and DocuSign.

Ken Moyle, chief legal officer at DocuSign, provides his perspective on electronic signatures and e-commerce:

Electronic signatures have created boundless opportunities to transact business in more efficient and environmentally friendly ways, and we appreciate that the United States Senate has renewed its support for the advancement of e-commerce. DocuSign supported this resolution to celebrate the advancements that have been made in the past 10 years, and more importantly, to encourage even more rapid adoption of electronic signatures in order to eliminate the time, expense and environmental impact of printing and signing paper documents.

The full text of the resolution follows:

Whereas the Electronic Signatures in Global and National Commerce Act (ESIGN) was enacted on June 30, 2000, to ensure that a signature, contract, or other record relating to a transaction may not be denied legal effect, validity, or enforceability solely because it is in electronic form;

Whereas Congress directed the Secretary of Commerce to take all actions necessary to eliminate or reduce, to the maximum extent possible, the impediments to commerce in electronic signatures, for the purpose of facilitating the development of interstate and foreign commerce; and

Whereas June 30, 2010, marks the 10th anniversary of the enactment of ESIGN and would be an appropriate date to designate as ‘‘National ESIGN Day’’: Now, therefore, be it

Resolved by the House of Representatives (the Senate concurring), That Congress—(1) supports the designation of a ‘‘National ESIGN Day’’; (2) recognizes the
previous contribution made by Congress to the adoption of modern solutions that keep the United States on the leading technological edge; and (3) reaffirms its
commitment to facilitating interstate and foreign commerce in an increasingly digital world.

A signature under (Utah law) does not require a signor to physically handle a piece of paper and sign her name with a pen. An electronic signature is sufficient to satisfy the election code.

Ken Moyle, DocuSign’s Chief Legal Officer and Public Policy Chair for the Electronic Signature and Records Association, commented:

This case is a home run for removing government barriers to electronic signatures. In particular, the court has narrowly interpreted a government agency’s right to reject electronically signed documents. There are many federal, state and local agencies today that have told consumers to wait for a rulemaking to “allow” something that is already allowed under the law. The impact on DMVs, county recorders and secretaries of state could be enormous.

Also very enlightening is the way the court eloquently and brutally exposed the weakness of the common argument about fraud:

The Lt. Governor … contends that electronic signatures attached to a certificate of nomination lack ‘apparent authority’ as genuine signatures. This position is based on a theory that a holographic signature is self-authenticating because the reviewing party may merely look at the signature and see that someone put pen to paper to sign their name. In contrast, an electronic signature lacks apparent authority, because it appears as a typed list of names…. We are unpersuaded that an electronic signature presents special concerns regarding candidate fraud; a candidate could as easily handwrite or type fraudulent names onto a certificate of nomination.

Moreover, electronic signatures may be a better deterrent to candidate fraud because an electronic signature incorporates readily verifiable personal, but non-public, information. For instance, the signors of Mr. Anderson’s petition apparently had to enter a security code that corresponds to the last four digits of their drivers license number before their signature would be counted.

This is a Utah decision, so it is not binding precedent for the rest of the country. But it reads well onto the interpretation of UETA in 46 other states.

Ken Moyle, chief legal officer of DocuSign, responds:

Under the above scenario, there is only one party electing to affix his signature electronically, and his consent is implicit in his act. The other party does not have to consent, because he is not electronically signing. Contract law still applies, and with the help of UETA, the writing requirement is still met as to the e-signing party’s participation in the formation of the contract.

If I send you an offer electronically, under contract law I have made you a bona fide offer and under ESIGN/UETA I cannot duck out of that solely because it was in electronic form. So if you accept it by printing out my offer and signing it with pen and paper, we’ve got a contract. Similarly, if you counter on paper and I accept your counter electronically by using my DocuSign signature, we have a contract.

DocuSign provides functionality that enables signers to sign on paper instead of eSign. Our Fax Back Support allows signers to print documents, wet sign and fax back or upload the signed documents into the DocuSign envelope. This process also enables you to include documents you need to have notarized in your DocuSign envelope.

DocuSign enables you to have the security of the market-leading electronic signature and online signing process with the flexibility to fit your needs – for more information, take a look at DocuSign’s electronic signature features and functionality.

Today’s blog post comes from Ken Moyle, DocuSign’s chief legal officer. If you’ve used electronic signature on an electronic record, you may be wondering about an “authoritative copy.” Ken addresses the question, “What is a single authoritative copy?” below:

The concept of “Authoritative Copy” comes from UCC Art. 9-105. This revision to Article 9 was intended to address the problem of electronic chattel paper. Anticipating that there may someday be a technological means for identifying or controlling an electronic “original,” the drafters of 9-105 came up with the parameters, including these requirements:

(1) a single authoritative copy of the transferable record exists which is unique, identifiable, and, except as otherwise provided in paragraphs (4), (5), and (6), unalterable;
(2) the authoritative copy identifies the person asserting control as—
(A) the person to which the transferable record was issued; or
(B) if the authoritative copy indicates that the transferable record has been transferred, the person to which the transferable record was most recently transferred;
(3) the authoritative copy is communicated to and maintained by the person asserting control or its designated custodian;
(4) copies or revisions that add or change an identified assignee of the authoritative copy can be made only with the consent of the person asserting control;
(5) each copy of the authoritative copy and any copy of a copy is readily identifiable as a copy that is not the authoritative copy; and
(6) any revision of the authoritative copy is readily identifiable as authorized or unauthorized

ESIGN (Title II) and UETA (Section 16) create a parallel structure for the electronic equivalent of a paper promissory note, known as a “transferable record.” Since the UCC Article 3 provisions for promissory notes were not designed for use with electronic records, both laws set forth special rules for the management and retention of Transferable Records, stating that an electronic record can be treated as the equivalent of a negotiable promissory note in certain respects if:

• The electronic record contains only the same terms and conditions that are permitted
• in a promissory note governed by Article 3 of the UCC
• The electronic record is signed;
• The issuer of the record has agreed that it should be treated as a transferable record under the UETA; and
• The method used to record, register, or evidence a transfer of interests in the transferable record reliably establishes the identity of the person entitled to “control” (meaning control the transfer of) the electronic record.

The “safe harbor” for establishing control of the Transferrable Record is taken directly from UCC 9-105 above.

DocuSign has taken this concept and created a process by which a document that is brought into our system can be identified and treated as an authoritative copy in compliance with the statutory provision, thereby enabling our customers to execute and transfer negotiable instruments.