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December 01, 2000
Meetings & Conventions: Planner's Portfolio December 2000 Current Issue
December 2000 lawandplan.gifPLANNER'S PORTFOLIO:

The Law & the Planner

By Jonathan T. Howe, Esq.


SIGNING ON THE VIRTUAL LINE

Electronic signatures are now legal and binding, but the process is still a work in progress

Electronic signatures are now as binding as those scribbled in ink. The new Electronic Signatures in Global and National Commerce Act, which took effect on Oct. 1, legalizes the use of digital signatures to finalize documents.

Under this act, a contract or any other signed document may not be denied legal effect, validity or enforceability solely because it is in electronic form or because an electronic signature or record was used in its formation.

In other words, almost any transaction may now be done wholly on the computer. For example, when registering for a meeting online, attendees now can be required to attach signatures when they use a credit card; the same is true for buying items electronically. Contracts with vendors can be signed via e-mail or over the Internet.

Faxes are covered in the legislation as well. A signed document sent by fax is as binding as the original copy. The act also legalizes the notarization of documents electronically.

TWO-STEP PROCESS
To sign online, two elements are necessary: an electronic version of your signature (it can be a scanned version of your penned signature, a symbol, a sound or an image) and a digital ID.

The electronic signature is affixed to the file. That is the easy part. The more complicated element is verifying who signed what. There is no standard yet for this process. In order for your digital signature to be valid, you must first obtain a digital certificate or ID to support your identity. Numerous companies offer such services; one of the best known is Verisign (www.verisign.com). This ID allows you to encrypt messages and documents sent over the Internet so they can be opened only by the intended recipient.

Here's how it would work for meeting planners: A contract, created online, has been agreed to and is ready to be signed by the planner. The supplier signs up with Verisign and is sent a public key and a private key to his identity. He sends the public key out with the contract to the planner. After electronically signing the document, the planner uses the supplier's public key to encrypt the document and sends it back. The supplier, using the private key, is the only person who can open that document. If it is intercepted along the way, it appears as gibberish.

Two other encryption programs are PGP (which stands for Pretty Good Privacy) from Network Associates (www.pgp.com) and Approvelt from Silanis Technology (www.silanis.com).

Because the technology is so young, analysts say it will be at least five to six years before electronic signatures become the way to do business. But, considering the speed at which business models have changed recently, I doubt it will take that long.

OPTING OUT
Just because this act is now in effect does not mean you have to use digital signatures or that you have to deal with a colleague electronically if you don't want to. The legislation's language is very clear that everyone has the right to agree or refuse to accept electronic records, signatures or contracts.

Being a little bit of the old school, I suggest that you still exchange hard copy with ink on the signature page for purposes of settling any kind of contractual issue. In the long run, however, the new law should help expedite the relationships between planners, attendees and vendors.

To learn more about electronic signatures including some situations where they are not valid visit these sites: Webopedia (webopedia.internet.com/TERM/d/ digital_signature.html) and the White House (www.whitehouse.gov/WH/New/html/20000630.html).

Jonathan T. Howe, Esq., is a senior partner in the Chicago and Washington, D.C., law firm of Howe & Hutton, Ltd., which specializes in meetings, travel and hospitality law. Legal questions can be e-mailed to him at askhowe@cahners.com.



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