What does the ESIGN Act require?

What is the general rule of validity?

The core rule sits in section 101(a) of the Act (15 U.S.C. § 7001(a)) and has two parts. A signature, contract or record cannot be denied legal effect just because it is electronic. And a contract cannot be denied legal effect just because an electronic signature or record was used to form it. The Act is deliberately neutral about technology. It does not name an approved signing method, require particular software, or rank one type of electronic signature above another.

What must businesses do before a consumer signs electronically?

Some laws say a consumer must be given information in writing. The ESIGN Act allows that information to be sent electronically instead, but only if the consumer agrees first.

Before the consumer agrees, the business must give them a clear statement of their rights. The consumer must be told they can have the documents on paper instead. They must be told they can withdraw their consent later, and what that would cost or change. The statement must say whether the consent covers only this transaction or future ones too. It must explain how to withdraw consent and how to update contact details. It must also explain how to ask for a paper copy, and whether there is a charge.

The business must then tell the consumer what hardware and software they need to open and keep the records. Finally, the consumer must agree electronically, in a way that proves they can open the documents in the format being used. For example, if a business emails its contracts as PDFs, the consent process has to show the customer can receive and open a PDF.

This last requirement has been challenged. A bill called the E-SIGN Modernization Act would remove it, so that consent alone would be enough. It has been introduced in Congress several times since 2020 and has never become law, so the requirement still applies.

What are the record-keeping requirements?

Where a law requires a contract or record to be kept, an electronic copy only counts if it accurately reflects the original and stays accessible to everyone entitled to see it, in a form that can be reproduced later. The Act also allows a contract to be refused legally, if the electronic record of it cannot be kept and accurately reproduced. So, an electronic signature with no reliable stored record behind it can fail in court, even though electronic signing itself is perfectly legal.

What does the ESIGN Act not do?

It does not force anyone, business or consumer, to use or accept electronic signatures. It does not change what other laws require a disclosure to say or when it must be given. It only allows electronic delivery. And it does not cover every document. Section 103 excludes wills, family law documents such as adoption and divorce papers, court orders and notices, and certain critical notices, including eviction, foreclosure, utility cut-off, insurance cancellation and product recalls.

For the full list, see What documents cannot be signed electronically?

One thing it does allow, perhaps surprisingly, is a notary’s signature.

How does the ESIGN Act relate to UETA?

UETA, the Uniform Electronic Transactions Act, is a model law from 1999 that states can adopt. It establishes the same core principle at state level. The ESIGN Act allows a state that adopts UETA to apply its own version in place of the federal rules. So in everyday transactions, the rules that apply are usually the state’s UETA, with the ESIGN Act sitting behind it as the federal baseline, most visibly on consumer consent and the excluded documents.

UETA has been adopted by 49 states, the District of Columbia, Puerto Rico and the US Virgin Islands. Adoption took a long time in some places. Washington adopted it in 2020 and Illinois in 2021, each replacing an older state law.

New York is the only state that has not adopted UETA. It uses its own law instead, the Electronic Signatures and Records Act (ESRA), at section 301 of the New York State Technology Law. ESRA reaches the same basic result, in that electronic signatures are valid, but it is structured differently and New York state agencies apply extra requirements to government transactions. Anyone working on a New York transaction should check against ESRA rather than assume UETA applies.