Electronic Signatures: Changing The Game For Notaries
Many Notary entrepreneurs are interested in offering general mobile Notary services as well as working as Signing Agents — but they are not the same. This guide will help you compare and understand the roles of Mobile Notaries and Notary Signing Agents.
For thousands of years, the only way to sign a document was putting ink to paper. The pens may have evolved, but the method remained largely the same — until the age of computers. The speed and convenience brought by digital technology created a whole new concept of signing and executing transactions.
From the click of the “submit order” button on an online retail website to signing mortgage documents to executing multibillion-dollar business deals, just about any transaction can be signed, sealed and delivered electronically.
In many jurisdictions, notarizations can be performed electronically, using a digital seal and digital signature. With the growing acceptance of e-commerce and eNotarization, it’s helpful to remember that the digital signatures you notarize can be just about anything. This means you will have to accept e-signatures in any form. But you will be on sound legal footing.
The Legal Basis For E-Signatures
The legal foundation for e-signatures has been created by two pieces of legislation: the federal E-SIGN act, and the state-level Uniform Electronic Transactions Act (UETA). The effect of these laws means that e-signatures have the same legal validity and effect of a traditional paper and ink signature.
E-SIGN And UETA
In 2000, Congress passed the Electronic Signatures in Global and National Commerce Act (E-SIGN), which authorized the use of e-signatures and eNotarization for transactions between two or more parties. In 1999, the Uniform Law Commission (ULC) drafted the Uniform Electronic Transactions Act (UETA), which has similar language to E-SIGN. The UETA has been adopted by the District of Columbia and every state except Illinois, New York and Washington.
Both acts define an e-signature as “an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.” That means e-signatures can be created with many processes and appear in many forms, including digital signatures, smartcards, typed names, box clicks, email names, PINs, voice, electronic sounds, biometrics and biodynamic versions.
In practice, e-signatures have three functions:
• They provide a legally binding means for a user to adopt or accept the contents of a document with the required intent to sign.
• They can be used as a method to enable authorized individuals to electronically sign on and obtain access to secure networks.
• They can attribute the authorship or origin of a message so that the recipient can better trust the integrity and identity of the sender.
However, an e-signature needs to include several elements, including the following:
• The signer must demonstrate the intent to sign. This can be accomplished by clicking an “accept” button on an application; typing a name; or using the mouse to create a signature or symbol.
• Most e-signature laws also include a requirement that the signer consent to do business electronically. Most e-commerce applications include some type of simple consent action, such as a “click to accept” clause.
Depending on the system or application used, a signer often is asked to “create” their digital signature, which could be a handwritten signature on a signature pad or a typed name using any number of fonts or a symbol that represents their signature. This would hold true for any eNotarization, whether the signer is in your physical presence or is half a world away and the notarization is being completed online.
In fact, an individual can have more than one e-signature. It is conceivable that the same individual could go to a Notary on different occasions with different digital documents containing different, valid e-signatures.
In addition, if you are in a state that authorizes online notarizations, your signer’s identity will be verified by knowledge-based authentication (KBA) or, in Montana, personal knowledge or credible identifying witness. So you won’t be able to compare signatures.
Once the legal basis for electronic signatures was established, states began addressing the need to notarize electronic documents. Today eNotarization is legally authorized in all states by E-SIGN and UETA. However, many states have yet to put into place the rules that would enable it to be reliably implemented.
In the states that have rules, some require the Notary to use a particular type of electronic signature or signing process to render a notarized document tamper-evident. Be sure to check with the NNA or your local commissioning official to learn about applicable requirements in your state.
e-Signature Questions And Limitations
Despite having a legal basis for e-signatures in place, many questions of trust, reliability, acceptability and practice remain.
Technology for e-signatures and e-commerce has come a long way in the past several decades. Depending on the process used, e-signatures can be more capable than traditional signatures of providing strong evidence of a signer’s intent and identity; the integrity of the document; and time it was signed.
But e-signatures have limitations. E-SIGN and UETA, for example, do not authorize their use for:
• Court pleadings
• Family documents
• Testamentary trusts
• Powers of attorney
• Certain other documents
However, many states have passed separate laws authorizing e-signatures for these types of documents, so anyone working with them will need to check the local statues and regulations.
For Notaries, there is a growing likelihood of coming across e-signed, digital documents that need a notarization. But that does not mean you are required to be able to perform an eNotarization. Current laws neither require a Notary to be capable of performing an eNotarization nor perform one with a noncompliant electronic signing system.
Another limitation is that, absent encryption, e-signatures do not prevent a digital document from being altered without the signer’s knowledge. The e-signature laws do not expressly mandate that e-signature technology must prevent tampering or forgery. Currently, use of an encrypted digital signature is the prevailing process for detecting unauthorized changes to e-documents.
However, if we have learned anything about technology it’s that any limitation or shortcoming can be fixed. So it’s likely that in the future e-signatures will be more secure, more robust and more difficult to fake or forge.
Technology also is accelerating the integration of e-signatures into the Notary world. That is most evident with the growing acceptance of online notarization, sometimes called remote or webcam notarization. To date, nine states have authorized the practice, and more are likely to follow suit in the coming years. This means that e-signatures in all forms will become much more commonplace. Ultimately, they may become the norm and paper and ink signatures the exception.
Michael Closen is Professor Emeritus at the John Marshall Law School in Chicago, Illinois. A respected consultant on model Notary statutes and legislation, Closen served on the drafting committees for The Notary Public Code of Professional Responsibility and various editions of the Model Notary Act, and recently authored the book, Professor Closen’s Notary Best Practices: Expert’s Guide to Notarization of Documents.
Timothy Reiniger is a licensed attorney in California and Washington, D.C. He leads the Timothy Reiniger LLC advisory practice from Cape Elizabeth, Maine. He is an author of the Virginia online notarization law as well as the Virginia Digital Identity Management Law. As a nationally recognized expert on the Notary office and identity policy, he has testified before the U.S. House Judiciary Committee and The Hague Conference on Private International Law, and was appointed as an ABA Advisor to the Uniform Law Commission Committee for the Revised Uniform Law on Notarial Acts.