Digital Signatures in E-Commerce

¶ … electronic signatures as is used for the purposes of e-commerce. The writer explores their use, their problems and some of the legislature for their use. The primary focus is on the differences and similarities in three states regarding electronic signatures. There were three sources used to complete this paper.

With the advent of the internet came the ability to sign for things electronically. Electronic signatures have become a topic of debate as people are able to purchase things online, sign contracts online and perform banking functions online. The problem stems from two main areas. The first problem is the fact that electronic signatures are easily "forged" while the second problem revolves around the fact that different states mandate different laws when it comes to the care, use and legality of using electronic signatures.

There has been talk of mandating electronic signatures from a federal level but thus far it is still a joint responsibility (Thibodeau, 1999).

The Electronic Signature in Global and National Commerce Act, or E- Sign bill, sponsored by House Commerce Committee Chairman Tom Bliley (R-Va.), would set a national standard for electronic signatures and put them on legal par with written signatures. Businesses say they need a consistent national standard to conduct transactions across state lines. But the E-Sign bill has raised concerns of consumer groups and some legal experts, who urged the House last week to defeat it. They said the bill would authorize businesses to replace paper records, such as warranties, with electronic records, regardless of whether the consumer has a computer (Thibodeau, 1999)."

Currently the federal government and the state governments are sharing the responsibility for regulating electronic signatures.

Responsibility for the regulation of commerce in the United States is split between the federal government and the states. The U.S. Constitution gives to the United States Congress the power to legislate the regulation of commerce with foreign nations, among the several states, and with the Indian tribes. However, the right to regulate all other commerce remains with the individual states.

An electronic signature is defined as being:

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 to sign the record (United States - Electronic Signatures (http://www.ladas.com/BULLETINS/2002/0202Bulletin/USElectronicSignature.html)."

Different states have different mandates when it comes to electronic signatures.

California mandates that the electronic signature must be give through the use of technology currently accepted by the state of California. p

For a digital signature to be valid for use by a public entity, it must be created by a technology that is accepted for use by the State of California.

Further California requirements include:

It must be unique to the person using it

It is capable of verification;

It is under the sole control of the person using it;

It is linked to data in such a manner that if the data are changed, the digital signature is invalidated (California Digital Signature Regulations (http://www.ss.ca.gov/digsig/regulations.htm)."

Nebraska has a less stringent set of authorization rules however it covers much of the same ground with what it does have.

In the state of Nebraska an electronic signature is valid and binding if it identifies the certification authority issuing it;

names or identifies its subscriber; (iii) contains the subscriber's public key;

is digitally signed by the certification authority issuing or amending it, conforms to widely-used standards (Nebraska Electronic Signatures (http://www.bmck.com/ecommerce/nebraska-t.htm#lb924)."

Some of the things that are allowed to be filed through the use of electronic signatures in Nebraska include warrants, financial transactions, and legally binding contracts as long as all other state contract laws also apply.