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Do electronic signatures mean an end to the dotted line? For most Web users, signing a contract online is no big deal. But lawyers must consider the security and enforceability of their e-signatures.

Article Excerpt
"Signed, sealed, delivered--on line," you might hum, doing your best Stevie Wonder impression, as you paste a scanned picture of your signature into an e-mail and hit the "send" button. But is your John Hancock safe in cyberspace? Can you really negotiate and sign a contract entirely online with someone in another part of the world, and ensure that the signatures are valid and legally binding?

Electronic signatures are used today in many consumer transactions--from signing an electronic tablet for a FedEx package to buying books and CDs on the Internet, where entering a credit card number into a secure site that stores it in encrypted form stands as the user's agreement to purchase.

Increasingly, major transactions are being conducted electronically. People are using the Internet to buy cars and real estate, and they're signing contracts for home loans and closing costs online. For business-to-business transactions--which often involve negotiations, a lot of money, and complicated contracts--electronic signatures can render the contracts legal, valid, binding, and enforceable. Generally, these signatures use encrypted personal identification numbers (PINs) or digital-signature technology.

The Internet, an open environment that anyone with a computer can access, is changing the business of law. Where once lawyers traveled extensively for face-to-face meetings, relied on a complicated system of courier and overnight-express deliveries, or hovered by the fax machine, now they send e-mails with documents attached, saving both time and money.

The purpose of a signature, it is generally understood, is to bind the signer to a document. According to the Uniform Commercial Code, a document is "signed" if it "includes any symbol executed or adopted by a party with present intention to authenticate a writing." (1)

The American Bar Association (ABA) Science and Technology Section, which has published guidelines on digital signatures, notes that a signature identifies the signer with a document and signifies his or her approval of the document or intent that it have legal effect. The act of signing focuses the signer's attention on the meaning of the signature and finalizes the transaction.

According to the ABA section's Digital Signature Guidelines, a signature should not only indicate who signed the document and be difficult to reproduce, but also should be uniquely associated with what has been signed, making it equally difficult to falsify the document. (2) Digital signatures, it maintains, fill the bill.

But digital signatures are just one type of electronic signature, which may be any...