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ELECTRONIC RECORDS
AND SIGNATURES -- CHALLENGE AND OPPORTUNITY
New eCommerce
laws make possible the widespread replacement of paper documents with
electronic records. They also enable the broad use of electronic
signatures. Many businesses have begun converting their operations to
avail themselves of the enormous advantages offered by electronic records
systems.
While the new eCommerce
laws permit the use of electronic records and signatures, they also
require that electronic systems and processes meet specific standards
for:
- Obtaining consent to use electronic records
and signatures,
- Presentation of information,
- Execution of signatures and creation of
agreements,
- Record retention,
- Printing, and
- Delivery.
Failure to meet those standards may
impair the enforceability of electronic records. As a result, companies
are being forced to invest significant time, effort and manpower in
answering questions about how to handle the practical, routine aspects of
electronic transactions. Much of this time and effort could be avoided if
industry-wide standards for these elements of electronic transactions
could be established.
To address this problem,
industry leaders have undertaken a cross-industry initiative to establish
commonly understood "rules of the road" available to all
parties seeking to take advantage of the powers conferred by ESIGN and
UETA. The product of this initiative is the Standards and Procedures for
Electronic Records and Signatures ("SPeRS").
WHAT IS SPeRS?
SPeRS is:
- A set of guidelines, procedures,
checklists and strategies for developing systems to create, deliver,
sign, manage and transfer legally enforceable electronic records and
signatures in commercial and consumer transactions. Intended to help
companies develop cross-discipline system design teams for
implementing electronic commerce.
- Focused on the behavioral aspects of the
interaction between participants in the transaction. SPeRS is technology neutral.
SPeRS will:
- Permit businesses to establish a common
understanding with internal team members and vendors concerning the
methodology for designing eCommerce
systems,
- Assist in establishing industry standards
for commercially reasonable, enforceable structures and processes,
and
- Help provide the customer with a
"common experience" across various online transactions.
WHAT KINDS OF ISSUES DOES SPeRS ADDRESS?
SPeRS' 30 Standards, and the supporting checklists,
address dozens of issues related to the use of electronic records and
signatures. Examples include:
- Describing the risks and liabilities
associated with using a PIN or password.
- Obtaining a consumer's consent to use
electronic records and signatures.
- Selecting a signature process that is
appropriate for the transaction.
- Establishing the intent to sign an
electronic record.
- Effectively delivering information in an electronic
environment.
- Using hyperlinks and other devices used in
referencing, displaying, and drawing attention to information and
disclosures.
- Strategies for effective record retention.
See the attached Table of Contents for more information.
WHAT IS SPeRS 2.0?
The updated Version
2.0 focuses on certain select legal, regulatory and business development
since 1.0 was issued. While there has been no need to alter the standards
provided by the original text, the new version does reflect a number of
developments since the original text was prepared, and such developments
have been incorporated into the guidance.
MORE INFORMATION ABOUT SPeRS
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