There’s been a lot of advancement lately in the field of electronic contracts and electronic signatures. You’ve probably seen one yourself – many businesses are switching over to digital means of capturing signatures for, say, credit card transactions. You know those little squares that coffeeshops and smaller restaurants have sticking out of their iPads? If you’ve used one of those, you’ve done an electronic signature.
But there’s been some talk these days about if Michigan can actually consider those, or other forms of e-signed documents, valid.
The Michigan Uniform Electronic Transactions Act (also referred to as UETA) was passed in 2000 and validated many types of electronically signed documents, such as tax forms and insurance papers. There are the usual rejoinders to prove context and circumstance of the document’s creation and validation, but nothing unusual.
The law’s stated intent was to put e-commerce and physical transactions on “equal footing” (check out the Michael J. Hamblin blog for more specifics) by making electronic signatures and agreements enforceable and legally binding when appropriate. However, just as with any emerging technology, there were a few hiccups along the way.
In 2012, Zulkiewski v. American General Life Insurance Co. began – a court case wherein the family of a man who had committed believe the changes he had made online to his life insurance policy were done fraudulently to benefit his new spouse.
Sad stuff, but a pretty common sight in estate law these days. The previous beneficiaries of the policy contested the payout, as there was no proof the deceased had actually made the changes himself. An electronic ‘paper trail’ was sniffed out, showing that the proper steps and security measures had been taken to verify the policyholder’s identity and intent to change the policy as best as can be done online versus in-person.
The court found that the insurance company made reasonable effort to include security steps taken to validate a customer’s identity, the policyholder had a history of being “computer literate” to the point where he can properly operate similar transactions, and that the new spouse had been made sole beneficiary on a number of other documents around the same time.
So what does this mean for your business? Simple: if you’ve got electronic transactions, pardon my French but cover your ass. Make sure your identify verification steps are still deep without being labrynthine, and make sure it would continue being difficult for anyone to fake an e-signature for any reason. Got all that? You’ll be fine.