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WHITE PAPER
Detailed Discussion o the Legal IssuesSurrounding E-Signature Deployment
Introduction.....................................................................................................3What is an electronic contract? ..................................................................3Key Factors or Enorceable E-Signatures ......................................................3Intent ..........................................................................................................3Proo o Identity .........................................................................................3Non-repudiation .........................................................................................5“Signed writing” requirements ..................................................................5It is Really a Business Decision! ..................................................................6ESIGN/UETA Legislation Overview ................................................................7What is NOT allowed to be signed with e-contracting? ................................8UCC Exclusions & Transerable Records ....................................................8Considering State legislation ..........................................................................9How do State Laws relate to UETA and ESIGN? .......................................9The Problem with Digital Certifcates .............................................................10Problems with PKI Compared to DocuSign ...............................................11How DocuSign Contracts meet the law .........................................................13Summary .........................................................................................................15DocuSign legal Framework ........................................................................15Appendix One .................................................................................................16American Bar Association Recommendation or e-contracts ....................16Opportunity to Review Terms ....................................................................16Appendix Two .................................................................................................19Validity o Assent in Click-through Agreements ........................................19Appendix Three ..............................................................................................21Comparison o E-Sign and Pure UETA .......................................................24Appendix Four ................................................................................................24Practical Tips and Preliminary Thoughts or Lawyers ................................24
 
WHITE PAPER
Introduction
This document is part o a series provided by DocuSign, Inc. ocusing on the delivery o business-classelectronic signature services. This whitepaper discusses the legal issues that must be addressed inthe deployment o e-signature services. It is not intended to replace a specifc review o legal issuessurrounding contract execution in any particular industry.For additional inormation on other important issues, please reer to the companion whitepapers on:
•TheBusinessCaseforDocuSign•SecurityandTechnologyAdvantagesoftheDocuSignArchitecture•LegalIssuesWhitepaper 
The ollowing sections provide an overview covering 1) the evolution o electronic contracting, 2) the legislationenabling electronic signature usage and 3) the key legal actors or successul deployment o an e-signaturesystem. Subsequent sections then provide detail regarding the specic ways that the DocuSignTM architectureaddresses these critical legal issues.
What is an electronic contract?
It may be helpul to rst make one point perectly clear: under U.S. law (and under the law o most countriesworldwide, although we won’t attempt a detailed international analysis here) it is absolutely possible to orma contract electronically. E-SIGN and UETA have helped cement this conclusion, but really this wasn’t a hardquestion even beore these enactments.Electronic contracting is, undamentally, contracting and contract law undamentals apply. Any contract,electronic or not, requires:
(a) “Oer,”(b) “Acceptance”, and(c) “Consideration” – some promised exchange o value.(d) “No deenses” - A contract, electronic or not, will not be enorced i a successul deense can be raised: or example, i anelement o the contract is “unconscionable” (violates public policy), i one o the contracting parties was too young to createa contract, etc.
For the record, many U.S. courts have enorced electronic contracts, including ‘click-wrap’, and even recordedtelephone agreements. (See Case Law section)All this being said, there are two areas where electronic contracting raises some unique issues: (1) “signedwriting” requirements, and (2) proo – i.e., proving contract ormation, proving what the substantive terms o acontract are, and proving party identity. These are elements o contracting that have nothing to do with thesignature itsel, but deal with the process o signing an agreement.In addition, many states have adopted another body o legislation called UETA (Uniorm Electronic Transactions
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WHITE PAPER
Act), which strives to make interstate commerce smooth on a national level. These ederal initiatives areintended to bring a common understanding to electronic commerce, and have provisions that can pre-emptstate laws which are not consistent with them. In addition, this legislation has pre-empted inconsistent Statelaws that were technology centric around PKI-specic ‘digital signature’ requirements. As o May 2004, everystate has legislation pertaining to electronic signatures. Most have adopted the Federal UETA process, whileothers have adopted similar laws.E-SIGN broadly denes Electronic Signatures as
“an electronic sound, symbol or process attached to or logically associated with a contract or other record and executed or adopted by a person with the intent tosign the record.”
This drating was intentional to allow many types o technology (E-SIGN is technology neutral)and methods or signing electronically, while maintaining legal compliance. By denition then,
an electronic signature can be just about anything produced by electronic means (e.g., a symbol, result, or consequence),which has been created electronically in order to demonstrate a party’s intent to sign an electronic record.
Specic examples o electronic signing include, entering a password or personal inormation number (PIN),typing a name where indicated (or prompted) via computer keypad, responding to telephone keypadagreements (e.g., “press 3 to agree or 5 to hear this menu again”), responding to click agreements, evenresponding to an email thread can constitute a digital signature.It is important to keep in mind that legal digital signatures can take many dierent orms, ranging rom smartcards and complex digital certicates to simple email responses. However, considering the realities and risks o the business world, it is important to implement E-SIGN provisions using a system that can provide auditableproo o the signature process and which can ensure non-repudiation to prevent legal challenges o the digitalsignature.
Key Factors or Enorceable E-Signatures
Intent
Intent is an important aspect o the e-signature process because it provides the legal “context” orenorceability. I the signer could claim to have “not understood” that they were actually signing a document,they might be able to mount a successul legal deense. With electronic signatures, the ability to establishintent can be o particular importance and can pose special challenges because the signing process doesnot take place within a structured physical setting (e.g. in a ace-to-ace meeting). Thereore the e-signatureprocess should always provide a “structured online setting” that takes the signer through a series o steps,which make it clear that they are signing a legal document and conrms intent through overt actions, such ascreating their signature and applying it to specic locations in the document.
Proo o Identity
Establishing the identity o the parties to the contract is a critical aspect o the signature process. In an onlinesetting, this can be especially challenging because the parties do not “see each other” during the signing
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