Wednesday, November 5, 2008

Online Resource: Digital Signatures

Courtesy of the American Bar Association comes this Digital Signature Guidelines - Tutorial. For those thinking about contracts, I suggest reading this section in particular:

A signature is not part of the substance of a transaction, but rather of its representation or form. Signing writings serve the following general purposes:

* Evidence: A signature authenticates a writing by identifying the signer with the signed document. When the signer makes a mark in a distinctive manner, the writing becomes attributable to the signer.
* Ceremony: The act of signing a document calls to the signer's attention the legal significance of the signer's act, and thereby helps prevent "inconsiderate engagements.
* Approval: In certain contexts defined by law or custom, a signature expresses the signer's approval or authorization of the writing, or the signer's intention that it have legal effect.
* Efficiency and logistics: A signature on a written document often imparts a sense of clarity and finality to the transaction and may lessen the subsequent need to inquire beyond the face of a document.Negotiable instruments, for example, rely upon formal requirements, including a signature, for their ability to change hands with ease, rapidity, and minimal interruption.

The formal requirements for legal transactions, including the need for signatures, vary in different legal systems, and also vary with the passage of time. There is also variance in the legal consequences of failure to cast the transaction in a required form. The statute of frauds of the common law tradition, for example, does not render a transaction invalid for lack of a "writing signed by the party to be charged," but rather makes it unenforceable in court,<9> a distinction which has caused the practical application of the statute to be greatly limited in case law.

During this century, most legal systems have reduced formal requirements,<10> or at least have minimized the consequences of failure to satisfy formal requirements. Nevertheless, sound practice still calls for transactions to be formalized in a manner which assures the parties of their validity and enforceability.<11> In current practice, formalization usually involves documenting the transaction on paper and signing or authenticating the paper. Traditional methods, however, are undergoing fundamental change. Documents continue to be written on paper, but sometimes merely to satisfy the need for a legally recognized form. In many instances, the information exchanged to effect a transaction never takes paper form. Computer-based information can also be utilized differently than its paper counterpart. For example, computers can "read" digital information and transform the information or take programmable actions based on the information. Information stored as bits rather than as atoms of ink and paper can travel near the speed of light, may be duplicated without limit and with insignificant cost.