Tuesday, May 8, 2012

I'm a big fan of eContracts, but look at what passes for a "signature"

[Published May 10, 2012, in the Denver Post]

A few months ago, I wrote about the greatly increased use of electronic contracts and electronic signatures. I myself have adopted “eContracts” as my primary software for creating real estate contracts.

Let’s say, for example, that I need to amend a date on a contract to buy and sell real estate. Using CTM eContracts, the official contract software of the Colorado Association of Realtors, I can create that amendment in about one minute and, in another minute email it to my client and to the agent for the other party. If the other agent forwards it immediately to his/her client, and clients on both sides of the transaction are at their computers, I can (and often do) have that document legally executed by all parties in less than five minutes. 

It’s a very eco-friendly technology, because none of the parties involved ever needs to print out the document. Except for the fact that most of us end up printing all these documents for our files, such technology has brought us quite close to the elusive “paperless transaction.”

I have just one gripe about it, and that is the recent introduction of using “fonts” to create one’s signature. To demonstrate what I’m talking about, I created a simulated document which my wife, Rita, and I have signed electronically.  I signed it by using my mouse, and she signed it by selecting a font (or typeface) and then clicking “Save.”

Here’s what my mouse signature looks like:

(Reminds me of what my signatures look like at King Soopers and Safeway! Those, too, are electronic signatures.)

And here is what Rita’s font signature looks like:

Like Rita, it's much prettier... but Rita didn't "sign" it. I signed it for her by selecting a type font.  I didn’t even have to type her name. I just clicked on the font option, and the full name appeared in the signature box. Anyone could have done that, and it would have looked exactly the same. Knowing this, it would be hard to defend such a signature in court.

The Colorado statute governing electronic signatures says that the signature must be “unique” and capable of “verification,” and that it is under the “sole control” of the signer.  It is hard to believe that using fonts for signatures meets any of those requirements.

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