Surprisingly, we are still talking about the authorization of electronic signatures. Most of us live in a highly digital world (especially lately) and in many cases, we rarely touch a piece of paper, except regular mail, for months at a time. However, despite hearing about the complete elimination of paper records for decades, these records persist through M&A advisory.
Laws Governing Electronic Signatures and Records
The legality of electronic records and signatures is based in the United States and Canada on four model federal statutes. The United States applies the following laws:
- ESIGN: Electronic signatures under the Global and National Commerce Act
- UETA: The Uniform Electronic Transactions Act
Canada applies laws like those of the United States:
- PIPEDA: The Personal Information Protection and Electronic Documents Act
- LUCE: The Uniform Electronic Commerce Act
Most other countries have adopted similar, if not identical, model laws. All states in the United States and all provinces in Canada, including the territories, comply with these model laws by adopting them in whole or in part or by adopting similar legislation. All these model laws are technology-neutral, that is, they do not impose specific technologies for making or keeping electronic documents. The laws recognize that technologies evolve; it is therefore practically impossible to predict future developments.
Exemptions from the law
Each of these federal statutes has exemptions for authorizing electronic signatures and documents, including wills and codicils, as well as numerous family law documents. In addition to these documents are safety records, such as product recall notices, facility closure notices, etc. However, the important thing to remember about these model federal laws is that they provide a great deal of latitude to states, provinces, and territories by allowing them to create and establish their exemptions to licensing regulations. The list grows considerably longer for some states and provinces. California, for example, has added many exemptions to federal law.
Many exemptions applied at the state, provincial and territorial levels are specific to certain sectors. Please, therefore, pay attention to this by referring to all the exemptions included in the laws and regulations of your sector. Depending on your industry, there may be a large number or a negligible number of additional exceptions, or no exceptions. As a rule, the more a sector is regulated, the more exemptions it has.
How to identify exemptions
However, it should always be assumed that most records can be stored and signed electronically. For guidelines, please contact the authorities in your state, province, or territory responsible for laws and regulations regarding electronic records and signatures. These authorities will provide you with general guidelines on all applicable exemptions, whether the authority in question has adopted the federal model laws in whole or in part or established its regulations. This will give you a good head start on identifying exceptions with the help of an M&A advisor.
But keep in mind that, again, depending on your industry, there may be additional exemptions buried in various laws and regulations regarding the authorization of electronic records and signatures. Therefore, always ensure that you are prepared to engage in legal research like a detective.