When it comes to utilizing electronic signatures in business contracts, it`s important to ensure that the language used is clear, concise, and legally binding. The following are some sample contract language for electronic signature that you can incorporate into your agreements to ensure compliance with relevant laws and regulations.
1. Definition of Electronic Signature
The contract should start by defining what constitutes an electronic signature. This definition should be drafted in general terms to ensure that it covers all forms of electronic signatures that might be used.
Example: For purposes of this agreement, “electronic signature” shall mean any 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 to sign the record.
2. Intention to Sign
It is important to ensure that both parties unequivocally agree to electronically sign the document. The language used should clarify that both parties understand the implications of using electronic signatures and that they intend to use them for the purpose of signing the contract.
Example: By electronically signing this agreement, the parties acknowledge that they understand the legal significance of using electronic signatures and that they intend to be bound by this agreement.
3. Consent to Electronic Signature
The contract should also contain language that requires both parties to consent to the use of electronic signatures. This consent should be explicit and be made before the parties commence signing the contract.
Example: By clicking the “I Agree” button or affixing an electronic signature to this agreement, the parties explicitly consent to the use of electronic signatures and acknowledge that the use of electronic signatures satisfies any legal requirements for a signature.
4. Validity of Electronic Signature
There should be an explicit statement that an electronic signature is legally binding and has the same force and effect as a handwritten signature. This statement should also clarify that the electronic signature cannot be challenged on the grounds that it is not a valid signature.
Example: Any electronic signature affixed to this agreement shall have the same force and effect as a handwritten signature and shall not be challenged on the grounds that it is not a valid signature.
5. Retention of Electronic Signature
The contract should include language outlining the parties` responsibility to retain a copy of the signed agreement electronically. This clause should also specify the format in which the electronic signature must be stored and the length of time that it must be retained.
Example: The parties agree to retain an electronic version of the signed agreement for a period of five (5) years from the date of signing. The electronic signature shall be stored in a format that is accessible, can be reproduced in a readable form, and is capable of being accurately reproduced.
Utilizing electronic signatures is an efficient and convenient way to sign contracts quickly and securely. With the above sample contract language for electronic signature, you can be confident that your electronic signatures are legally binding and meet all necessary requirements.