Congress Makes Deal on E-Signatures

June 9, 2000

By Jim Abrams
Associated Press Writer

WASHINGTON ?? Electronic contracts would gain the same legal status as handwritten signatures under legislation that has cleared a key congressional hurdle on its way to becoming law.

House and Senate lawmakers, after months of negotiations among themselves and with the administration on such issues as how to protect consumers from abuses, late Thursday reached a compromise that could speed the measure toward passage.

The legislation would set national standards for electronic signatures and records and give them the same legal validity as written contracts and documents.

"Electronic signatures and records will help grow the digital economy by giving American consumers greater confidence in their online business transactions. This is one of the most important steps Congress can take to help foster the growth of the digital economy," said Rep. Tom Bliley, R-Va., who chairs the House Commerce Committee.

"This legislation will revolutionize the way consumers, industry and government conduct business over the Internet," said Sen. Spencer Abraham, R-Mich., sponsor of the Senate bill.

Both the House and Senate passed e-signature bills with little opposition last November, but resolving differences between the two bills has proved to be difficult. The administration and some Democrats opposed sections they said could weaken consumer protections while business groups lobbied against provisions on consumer consent they said would hinder smooth E-commerce transactions.

Among the last issues to be settled was setting March 1, 2001, as the date when records required by law, such as mortgages and financial securities, can legally be filed electronically. Some businesses had sought a later date.

The negotiators also closed a loophole that would have made it easier for states to pre-empt the federal law. States can still demand paper forms on such matters as public health and safety.

Under the bill, consumers must "opt in" for electronic records, ensuring that those who don't have access to computers or prefer written forms won't be left unaware when a company electronically serves notice on such matters as warranties, changes in interest rates or recalls.

Marc Brailov, spokesman for the American Electronics Association, said his group was pleased with the final product. He called it "a vital prerequisite to the continued growth of E-commerce. It provides legal certainty for online business."

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