The Principles of Electronic Agreement Legal Admissibility

ProofSpace White Paper
The Principles of Electronic
Agreement Legal Admissibility
Jacques Francoeur, B.A.Sc., M.A.Sc., MBA (408)-406-6539, jacques@proofspace.com
Notice: This is not legal adviceProofSpace White Paper
Table of Contents
Introduction 3Components of an Electronic Signature 3Electronic Signature Legislation - A Non Discrimination Act 4The Principles of Electronic Agreement Admissibility 6Principle 1: Electronic Signature Reliability 7Criteria 1: Electronic Signature to Electronic Document Binding 7Criteria 2: Identity Authentication 8Criteria 3: Electronic Signature Integrity 8Criteria 4: Electronic Document Integrity 8Principle 2: Sole Control over Act of Signing 9Criteria 5: Privacy of Unique Identifier 9Criteria 6: Sole Control Over Unique Identifier 9Criteria 7: Revocation of Unique Identifier 9Principle 3: A State of Informed Consent in the Act of Signing 10Criteria 8: Awareness of Engaging in a Process of Agreement Formation 11Criteria 9: Awareness of Intent and Implications of Act of Signing 11Criteria 10: Notice of Rights 11Principle 4: The Digital Chain of Admissibility 11Criteria 11: Audit Trail of How, Who, What and When 12Criteria 12: Retention 12Principle 5: Electronic Agreement Trustworthiness 13Criteria 13: Level of Electronic Signature Reliability 13Criteria 14: Degree of Control over the Act of Signing 14Criteria 15: Extent of a State of Informed Consent 14Criteria 16: Trustworthiness of the Digital Chain of Admissibility 14Conclusion: A Trusted Electronic Agreement Process 15Evaluation Matrix: Criteria for Legal Admissibility ProofSpace of Electronic Agreements 16900 Clancy Ave NEGrand Rapids, MI 49503(312) 933.8823www.proofspace.com The Principles of Electronic Agreement Legal Admissibility - Revised March 2003 ProofSpace White Paper
IntroductionIn its most basic sense, an agreement is a commitment between two or more parties to perform obligations in exchange for consideration. The agreement cannot be subject to imperfect memory, competing claims or repudiation. There must be a state of awareness that an agreement was being entered into and that a state of informed consent existed during the act of signing. There must be sufficient proof to establish the identities involved, the specifics of the agreement and the time the agreement was entered into; all of which must be retained for a prescribed period. The transformation from a paper-based agreement process to an electronic equivalent makes no difference to the ongoing need to adhere to legal standards, meet legislative requirements and comply with regulatory requirements. However, the electronic paradigm will create many new legal and technical challenges and present risks that will radically change the methods of meeting the standards and requirements and demonstrating their adherence and compliance. This paper will discuss a set of five principles that are essential to the legal admissibility of an electronic agreement. These principles are prerequisites to enforceable electronic agreements as required by existing legal standards and electronic signature legislation. Admissibility can be understood to mean meeting the prerequisite requirements necessary to hold an individual accountable, to obtain a successful dispute resolution judgment or to obtain a favorable court adjudication. This paper will also specify sixteen measurement criteria that can be used as metrics to assess whether the architecture of an electronic transaction will meet the requirements of admissibility. But first, let us define the essential components of an electronic signature and discuss the legal significance of electronic signature legislation - the elimination of a key barrier to executing end-to-end electronic agreements.
Components of an Electronic Signature In order to understand the impact of electronic signature legislation and to identity the minimum requirements necessary to adhere to the act, one must first understand the legal definition of an electronic signature and identify its essential components. The most effective way to do this is to understand the fundamentals of electronic signature laws, as articulated by the United Nations Commission on International 1Trade Law (UNCITRAL) Model Law on Electronic Signatures ("UN Model Law"). Then to understand the intent of a multinational standard such as the European Union 2Electronic Si... [download for more]