Most states have adopted some form of the Uniform Electronic Transactions Act (UETA) or other electronic signature laws. Electronic signatures are now largely considered by courts and governmental entities to be just as binding as signatures made with a pen on paper.
The main rules of the UETA, which applies in most states, validate electronic signatures in the following ways:
If UETA does not apply to an agreement, the Electronic Signatures in Global and National Commerce Act (ESIGN) or other law may. ESIGN is a federal law that validates e-signatures, but generally allows state laws like UETA to control.
While ESIGN and UETA generally make documents with e-signatures acceptable, whether a specific document is enforceable depends on the general contract law of your state.
The UETA does not require a specific kind of technology for an electronic signature to be valid. This means ministries can use sophisticated e-signature technology or more inexpensive methods without losing the e-signature’s legal effectiveness. Some examples of ways to create an e-signature are:
Regardless of how your ministry signs a document with an e-signature or has someone else electronically sign something prepared by the ministry, an e-signature still needs to meet the same two requirements imposed for a printed signature. They must:
In electronic transactions, it can be difficult to identify who is signing the agreement because the parties are not face-to-face while the document is being signed. This increases the risk that someone other than the intended signer could sign the document. To reduce this risk it is important for your ministry’s e-signature process to include ways that attribute each e-signature to the intended signer. Generally, people can be identified through the exchange of email since email addresses are exclusive and email accounts usually require a password that only the user knows.
Regardless of the process your ministry chooses, you should have it reviewed by a local attorney to ensure that all agreements will be enforceable.
Whatever e-signature process your ministry uses, provide clear steps that inform the signer that they are signing a legal document. Steps that require the signer to act intentionally, such as clicking an online button or selecting a checkbox, can help show that the signer intended to sign a document or enter an agreement electronically.
If your ministry is thinking about creating an agreement through electronic records and e-signatures, there are a few other requirements to keep in mind:
While ESIGN and UETA generally make documents with e-signatures acceptable, whether a specific document is enforceable depends on the general contract law of your state. Have a local attorney review any document that your ministry may intend to sign electronically.
*Important information: Brotherhood Mutual is pleased to provide Legal Assist as a complimentary resource. The services we offer through Legal Assist are intended to provide general legal information to our current and prospective policyholders.
The information we provide is intended to be helpful, but it does not constitute legal advice and is not a substitute for the advice from a licensed attorney in your area. Accordingly, no attorney/client relationship is created through this process, and no legal advice will be provided. We strongly encourage you to regularly consult with a local attorney as part of your risk management program.
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