All of us at DocuSign are very pleased to celebrate National ESIGN Day, June 30. The Next Web posted an article titled “Happy Brithday, Electronic Signature” that talks about the origins of the ESIGN Act (Electronic Signatures in Global and National Commerce Act), which was signed by Bill Clinton in 2000, but the legal backstory is equally interesting, and highlights the importance of ESIGN as it stands today to support the legality of electronic signature.

As the Internet age was dawning, states were scrambling to come up with legislation that would support electronic transactions—that is, signatures and records created, stored and managed electronically.

Utah was the first state to come up with a law about electronic transactions. It was technology-specific and based firmly on PKI (public key infrastructure, which was all the rage at the time). The law implicitly excluded all other technical means of contracting electronically, which created a panic among lawmakers in other states, who foresaw a tremendously complex and inefficient network of inconsistent state laws that would stifle electronic commerce.

In response, the Uniform Law Commission (formerly NCCUSL) crafted the Uniform Electronic Transactions Act (UETA) – a simple and very broad set of principles accommodating any technology imaginable (current or future), and clarifying that any “writing” or a “signature” requirements of existing laws or regulations would be met with electronic signatures and records. Rather than imposing rigid rules, UETA went the other way, offering permission and accommodation. It was widely praised and it was rapidly enacted in almost every state, even those states who had already adopted legislation in their own state.

Alas, inconsistencies emerged in the enactment of UETA in various states, most notably California. Even as the philosophy of accommodation was being spread throughout the states, there was still a problem with uneven application of state laws to electronic signatures, creating a possible chilling effect on interstate commerce.

That’s when ESIGN was born. The idea was to use the federal government’s broad preemption power under the Commerce Clause of the Constitution to impose an instant 50-state baseline for the applicability and enforceability of electronic signatures and records. ESIGN is essentially a carbon copy of the most significant provisions of UETA, with the addition of some consumer protection provisions. When Clinton signed ESIGN in 2000, electronic signatures and records were solidly supported under the law across the entire country. Inconsistent state laws are preempted by ESIGN for all matters affecting interstate commerce.

In 2010, DocuSign led a coalition of technology vendors and users in lobbying Congress to name June 30 National ESIGN Day. We’re proud to celebrate a day that’s highlights the value of finishing business faster across this country… not to mention 187 others.

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