Dec 20

Wet Ink Agreement

Note: This article was written prior to the global release of COVID-19, along with the widespread implementation of business continuity contingency plans for commercial banks, which allow employees and customers to work remotely and often involve the introduction of electronic signature processes. [1] It is more relevant than ever as the commercial risks that commercial banks must take into account when using electronic signatures when executing commercial credit contracts are more concentrated than ever. [2] Some jurisdictions, such as the United States, Canada and England, have largely permissive laws that recognize the applicability of electronic signature without specifying technical requirements, creating a predictable framework for electronic signature for the parties to the transaction. As a general rule, in the United States, a combination of federal and national law (Electronic Signatures in Global and National Commerce Act 2000 [ESIGN]), uniformity Electronic Transactions Act [UETA] [recommended for states in 1999]] considers that electronic signature is generally recognized as having the same legal effect as Nasstinte`s signature, as long as the acting parties have accepted its use and all legal requirements of a contract are met. [4] Laws are technologically neutral. The common practice is to introduce an explicit provision of consent into the body of an e-signed agreement, although it is not expressly necessary. However, lenders should also be aware of exceptions to the general rule by decoupling specific types of documents from the framework generally permitted by law or practice. For example, wet ink signatures should be required for sola changes and notarized documents. [5] In addition, wet ink signatures should also be required for accompanying documents such as mortgages, trust files and other agreements that are perfected by submission to government records. Although under the law between the contracting parties, the accompanying e-signed documents are generally applicable to the same extent as the agreements signed on wet ink, many national registers have not followed the law and do not accept the accompanying documents e-signed for registration. If a security contract requiring submission for perfection purposes is not filed by a register, the agreement would be applicable only between the contracting parties, but would not apply to third parties, which represents a risk to the party insured against the challenge by a third-party creditor or liquidator. Similarly, the federal and provincial law of Canada (Bank Act [Canada] [BA], z.B. Electronic Commerce Act, 2000 [Ontario][6] and the corresponding legislation in other Common Law Canadian provinces) are generally permissive with respect to the use of electronic signatures as long as the electronic signature technology used is reliable and fulfills the essential characteristics of an enforceable electronic signature (i.e.

(1) the electronic signature is reliable for identifying the person; from electronic signatures to relevant signatures the electronic document is reliable). Laws are technologically neutral and market practice is to include explicit consent provisions in e-signature contracts (as has already been mentioned), although these provisions are not expressly necessary. However, lenders should also be aware of exceptions to the general rule. Wet signatures should be required for certain documents, including debt securities, personal guarantees, notarized mortgage documents and guarantees registered with the Bank of Canada. [7] The first real change from a nearly 100 percent reliance on wet signatures began with the use of the telegraph at the time of the Civil War.