Corporate & Securities Law

Signature Automation: A Dispatch from the Front Lines

By Ken Adams

I recently received the following inquiry from longtime reader John “Fitz” Fitzpatrick:

Pardon me if I missed a blog discussion on e-signature (have you had one?), but recently a bunch of companies have requested that we sign our contracts with them using e-signature through a company called EchoSign.

Nice idea in principle, but I have a three issues.

First, I think that it’s poor etiquette for someone to e-sign a contract and process it through Echosign without the other party?s consent. For example, this morning I received an email request that I sign an unspecified document, and when I followed the link to my surprise I found, residing on EchoSign’s server, a contract that I had drafted and regarded as confidential. I was not pleased.

Second, how secure and dependable are services such as EchoSign? Should they be reserved for low-value transactions? Should any contract that contains confidential information be signed with actual signatures only? As an attorney for a publicly traded company in the pharmaceuticals industry, I expect that I?d have to jump through a series of hoops if I wanted to implement a signature-automation service (written statement of purpose, pre-qualification audit, annual review).

And third, if we elect to remain in the Stone Age, how about stating explicitly in a contract that it will be enforceable only if each party signs using a manuscript signature? (I’m on the point of including such a provision in my contracts, as I don’t want to see another of my documents on EchoSign?s servers.)

I’d be interested to know your thoughts.

I have in fact written about EchoSign, in this May 2007 blog post. I mentioned other vendors in this April 2008 post and this May 2010 post. But given the nature of my work, I don’t have occasion to use signature automation, so I’ll let others take a first crack at responding to Fitz.

Full post as published by AdamsDrafting on August 21, 2010 (boomark / email).