Wednesday, February 15, 2017

Be Aware Of Possible Legal Issues In Electronically Conducted Business Deals

Technology, indeed, has dramatically facilitated the conduct of business.  It has made possible the conclusions of transactions online, keeping the often stressful as well as tedious person to person interaction minimal.  Software applications have accorded legal acceptability to electronic signatures on documents, doing away with cumbersome ceremonies.

However, when huge resources are involved, such as in cases of real estate deals, stakeholders in electronically executed negotiations must always be circumspect of legal issues that may arise.  The first line of defense, definitely, is being accurately informed of the regulatory measures which define the  rules and the limits of digital documentation.

The federal government approved several laws governing  agreements biased to the technological approach.  One is the Electronic Signatures in Global and National Commerce Act (E-SIGN Act),  which clarifies that an electronically executed transaction is valid only when the signatory has conceded to resort to the electronic method of documentation.  The law succinctly states that either party to a deal has the right to decline the use of electronic method and resort to  paper signature instead.  Further, in case of consenting to the electronic approach, the law requires the proof of easy access, by either party, to the document that is the subject of consent in electronic form.

The Uniform Electronic Transactions Act (UETA), on the other hand,  states that an electronic record or an electronic signature is an acceptable replacement for a requirement of law for a writing or a signature when the parties to the transaction have signified their agreement to the  electronic method.  UETA is one of the several United States Uniform Acts adopted by forty-seven states.

The electronic approach to negotiations and contract signing presents several avenues for concerns, particularly that the dynamic nature of technology has its downside. The prevalence of cybercrimes that render difficult the preservation of documents’ content as confidential, must be seriously addressed by the parties who must exercise with utmost care and respect the privacy of the personal information transmitted during negotiations as well as the conditions of the contract. Likewise, the parties must ensure non-occurrence of fraud by investing in trusted electronic signature authentication services to secure signatures and identification markers in the execution of real estate contracts. 

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