World is going digital, and there is no doubt about that. Digital contracts and digital signatures are no exception. Electronic contracts for all purposes in business and like have seen a lot of popularity in recent years. A normal contract has to be signed with pen and paper. Not with an electronic contract though.

Electronic signatures are required to sign an electronic contract, and the popularity behind this is due to a lot of countries focusing on removing the traditional way of pen and paper out of the way. So when it comes to more serious matters, of course, rules and acts will start to become reality. For electronic signatures in electronic contracts, the Electronic Signature Information Technology Act came out. 

The Electronic Signature Information Technology Act covers a lot of rules and obligations under which one person, agency, or business must attain to. The Electronic Signature Information Technology Act covers the next rules for electronic signatures:

  • Information Technology for Certifying Authorities Rules 2000
  • Information Technology for Use of Electronic Records and Digital Signature Rules 2004
  • Digital Signature for End Entity Rules 2015

E-KYC in Electronic Signature Information Technology Act

The Electronic Signature Information Technology Act covers a lot of security for the person signing the electronic signature, so we can note the act has covered the validity of verification for the customer under law. The Electronic Signature Information Technology Act covers the validity of the electronic signature through the e-KYC verification procedures (Electronic Know Your Customers). Here are some of the verification procedures under the Electronic Signature Information Technology Act:

  • The Aadhaar e-KYC
  • Extra e-KYC verification procedures

Valid Electronic Signatures in Electronic Signature Information Technology Act

Although there is an e-KYC to protect the electronic signature from the electronic contract, the Electronic Signature Information Technology act also covers the validity of the electronic signature:

Electronic Signature Information Technology Act

  • The electronic signature has to be distinctive to the owner of the signature
  • Alterations of the electronic signature or the document must be detectable at the time of the signature signing
  • The person doing the electronic signature must have full control of the data used to sign the electronic signature
  • The business processing the electronic signature must have a valid Certificate recognized under certain authorities
  • A set of rules must be taken when signing the electronic signature

With the general basis of the Electronic Signature Information Technology Act, next up are the Electronic Signature Act of 1996, Digital Signature and Electronic Signature under IT Act 2000, E-Sign Act Exceptions, and E Sign Act Two Main Functions.

Electronic Signature Information Technology Act – Electronic Signature Act of 1996

The Electronic Signature Act of 1996 is under the United States law, in which Utah was the first to pass the electronic signature statute which was amended in 1996. After Utah signed the Electronic Signature Act of 1996, a lot of states soon followed, such as California, Washington, Florida, etc.

The Electronic Signature Act of 1996 was meant to put the electronic signature under US law to enforce the protection of the business proposing the electronic contract and the person signing the electronic signature.

The Electronic Signature Act of 1996 followed to solve the problems of giving the required validity on a document which only exists within an electronic form. The required validity is the importance of a legal document under the traditional pen and paper. With this in mind, the legislation under the Electronic Signature Act of 1996 looked forward to providing a secure and legally-sanctioned way of electronic signatures for electronic contracts. This Electronic Signature Act of 1996 in turn would make falsification and fraud of electronic signatures harder and encourage e-commerce.

The solutions for the Electronic Signature Act of 1996 were to solve these problems in a way where the electronic signature and electronic contract would be protected by the law. This in turn made legislation under which the traditional pen and paper contracts were on the same legal level as the electronic contracts. Legislations covering the security and protection of the electronic signature soon followed.

With the Electronic Signature Act of 1996 under US law, following the Electronic Signature Information Technology Act, soon followed a lot of acts for putting the force of law on electronic signatures, such as the Digital Signature and Electronic Signature under IT Act 2000.

Electronic Signature Information Technology Act – Digital Signature and Electronic Signature under IT Act 2000

The Digital Signature and Electronic Signature under IT Act 2000 is a crucial act in the world of electronic contracts and electronic signatures as it covers a lot of key important parts and defines the electronic signature more accurately, like the Electronic Signature Information Technology Act. 

The Digital Signature and Electronic Signature under IT Act 2000 define the electronic signature as authentication of any electronic record by a subscriber by means of an electronic method or procedure in accordance with the provisions of Section 3. Digital Signature and Electronic Signature under IT Act 2000 further deals with electronic signatures under Section 2, Section 3, and Section 15.

The definition for an electronic signature mentions the provisions of Section 3 of Digital Signature and Electronic Signature under IT Act 2000. These provisions are as follow:

  • The subscriber with the signing of his electronic signature has the rule to authenticate the electronic record in which the electronic signature resides
  • The subscriber of the electronic signature has a functioning key pair that corresponds to a public key and a private key
  • If someone is in possession of the public key of the electronic signature has the right to check and verify the electronic record
  • Asymmetric cryptosystem and hash function transform the initial electronic record into another record which affects the authentication of the record

Digital Signature and Electronic Signature under IT Act 2000We can see the Digital Signature and Electronic Signature under IT Act 2000 has come a long way in the modern world too defining crypto systems and hash functions. The Digital Signature and Electronic Signature under IT Act 2000 also covers the security of the electronic signature under Section 15. Section 15 considers an electronic signature secure if both parties agree on a security procedure, under which the electronic signature can be verified. Then the electronic signature will be considered for the contract if

  • The electronic signature is unique of the subscriber signing the electronic signature
  • The electronic signature is identifiable of the subscriber
  • The electronic signature is signed under the executive control of the person making the signature and can be linked back to an electronic record

Covering the Electronic Signature Information Technology Act, and other such acts protecting the electronic signature and electronic contract, we have not yet seen the E-Sign Act Exceptions.

Electronic Signature Information Technology Act – E-Sign Act Exceptions

While the Electronic Signature Information Technology Act covers legal law for the electronic signature and electronic contract, some acts present exceptions to electronic signatures on certain legal documents. That is where the E-Sign Act Exceptions come up. The E-Sign Act doesn’t cover all types of records and documents which present the E-Sign Act Exceptions. There are a lot of E-Sign Act Exceptions, and they are:

  • Documentation accompanying the transportation of hazardous materials
  • The cancellation of insurance benefits
  • Notices of the termination of utility services
  • Court orders and notices
  • Divorce decrees
  • Wills, codicils, and trusts
  • Adoption paperwork
  • Certain areas of the Uniform Commercial Code
  • Official court documents, including briefs and pleadings
  • Notices of default, foreclosure, repossession, or eviction
  • Product recalls or notices of material failures

All these E-Sign Act Exceptions are put in mostly for security reasons as to not damage the meaning behind the signature and the contract. In fact, all these acts, such as the Electronic Signature Information Technology Act and the E-Sign Act, are put in with the main reason of protecting the signature and the contract of damages. With the E-Sign Act Exceptions out of the way, we are left to see the E Sign Act Two main functions.

Electronic Signature Information Technology Act – E Sign Act Two Main Functions

The E Sign Act Two main functions cover a lot about electronic signatures and electronic contracts. The E Sign Act Two main functions cover making the electronic signature real, genuine, and legit. The E Sign Act Two main functions also want to remove the troubles that come with the traditional way of signing contracts with pen and paper. 

E Sign Act Two main functions are established to make it easier and more convenient for people to be able to do business contracts, apply for loans, and much more. 

The Electronic Signature Information Technology Act covers a lot of legislations and such, but the E Sign Act Two main functions prove to be more easily understandable for its validity.

 

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