Work Smarter, Not Just Harder

By
Real Estate Agent with Realty Executives

I am surprised at the number of agents and people that have never heard of electronic signatures. While not perfect for every situation, I believe DocuSign is a time and life saver in many situations. With our ZipForm program, it is very easy to send contracts, addendum's or any file to a client for an electronic signature. The document returns clean, legible and secure which surely beats a faxed copy! Better yet, any document can be sent for signatures, it doesn't have to be a "standardized" form. Many people love it because it is clean, easy and provides a great paper trail. Some agents will occasionally ask me if this is "legal" to use. Normally, I will send them a link to DocuSign.com..

I see that several people have written about e-signatures here, just wanted to throw in my two cents.

I am not saying we shouldn't meet face to face with people for contracts, disclosures, inspection notices etc. but there are many situations where electronic signatures come in very handy. I recently had a client (an IT guy) who was able to get a counter offer back to me from the lake! He was on his boat and has a laptop with a wireless card. While he didn't have access to a fax or a scanner, he did have access to his email. He simply opens the email, "signs" the document and returns to me. We were under contract while he was at the lake! :-) Works great for out of state clients, business travelers and many other situations.  Just to be clear, it doesn't work just with IT clients. I recall sending a counter offer to my mother in law when we were negotiating the sale of her home because I was curious to see how "easy" the service is for ANYONE to use. I gave her no warning, just sent the email and explained the situation of the counter offer. She LOVED it! Now, to say she isn't exactly a "computer geek" is an understatement. I am not sure what I would do with out this service now that we have been using it.

I could give dozens of examples but am curious to hear what people think. What do you think of lenders and escrow companies using this technology?

If you are not comfortable using a program like this, why not?

Edit.. Thanks for the questions from several agents!! - The client does not have to print the document. They are given a simple instruction to set up their electronic signature. Once they follow that simple instruction, they are able to click on the page, any place where we put a "sign here" or "dated" tab. Kinda like a sticky note. The document will not close unless all pages are signed and dated where necessary.  From our Zip Forms program or another document type, simply click on the print tab and choose electronic signatures instead of your printer, the document is then added to the program for sending to the client! Sswweettt!!

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Nick Bastian is a Tempe real estate agent specializing in the South East Valley and can be reached at 602-803-6425

Nick also writes a "hyper-local" blog about the communities, events, businesses and homes near light rail in Phoenix, Tempe and in Mesa.
Follow Nick on Twitter and on Google+!

 

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Show All Comments
Rainmaker
249,028
Kent Simpson
Tierra Antigua Realty - Downtown - Tucson, AZ
Real Estate Is About People
Nick, thank you for writing an insightful post!  As more of us adopt electronic aids to simplify our lives, jobs and transactions, the more we can concentrate on what is truly important.
April 06, 2008 11:54 PM #12
Rainmaker
204,238
Nick Bastian
Realty Executives - Tempe, AZ
Real Estate Agent - Tempe
Hi Kent.. Thanks for the comment. Simplicity has a lot of rewards. :-)
April 07, 2008 08:37 AM #13
Rainer
300,056
Vicente A. Martinez
Prudential Douglas Elliman Licensed Real Estate Salesperson - Woodhaven, NY
Realtor, Brooklyn - Long Island - Queens Homes
Hi Nick. Thanks for sharing the great tip! Keep them coming.
April 08, 2008 01:05 AM #14
Rainmaker
204,238
Nick Bastian
Realty Executives - Tempe, AZ
Real Estate Agent - Tempe
Hi Vincent.. Thanks for stopping by. I'm glad people find this useful... Hope to see you around!
April 08, 2008 10:07 AM #15
Rainmaker
137,918
Ricky Beach
Keller Williams Realty Group One Inc. - Reno, NV
Reno Broker/Salesperson/Realtor

Nice post Nick. I think this is where the industry is headed. One day the only face time will be at the showing.

January 23, 2009 10:15 AM #16
Anonymous
Anonymous
Anonymous

I think the weakness of this kind of approach is that the signature doesn't prove anything in a court where these documents must meet the legal standards of the Federal Rules for Civil Procedures (FRCP).  Since December, 2006, the FRCP has been modified to accommodate the growing dominance of the use of electronic documents, but it has created a litigation minefield that makes less than conforming evidence to be disregarded. 

The signature simulation approach that has been discussed doesn't address the one critical fact upon which most cases hang, and that is who was sitting in front of the computer signing the document.  It could be anyone who has access to the user name and password of the signer.  It could be one's spouse, or someone who intends to cause harm (possibly one in the same).  Anyone can sign the document, and to the degree that one relaxes his own security in his home, it is to that extent that such documents can become inadmissible in court. 

Think for a minute.  Would you allow someone to sign a paper document if you could not see who it is that is signing the paper?  Do you think it would stand up in court?  Then why would you allow someone to sign a document electronically when the signature doesn't even look like the person's actual signature, and when you don't know who is sitting at the keyboard?  It too would have a hard time in court.

This may seem like a petty objection in view of the convenience it brings to the real estate transaction consummation process, but consider that today in the wake of FRCP and subsequent case law, the typical expense for so-called discovery of electronic documents (e-discovery or digital forensics) for a small company or an individual can easily exceed $300,000, and many attorneys now regard $2.5 to $3 million to be an acceptable range of costs for e-discovery for small to medium size firms.  In the 2002 case of Rowe Entertainment v. William Morris Agency, the e-discovery costs were $11 million before either party had their first day in court!

Successfully pursuing litigation upon which hangs the authenticity of a critical document requires that documents are created and preserved in conformity to FRCP and successive interpretations of the law as defined in court decisions.  For this reason, it is wise to insist on physical signatures on documents and to require contemporaneous written attestations of those in attendance at the signing of each document that describe under penalty of perjury the activity that has occurred. 

The other alternative is to use tools like those our company produces that absolutely, positively identify the person sitting in front of the computer.  It works with with products from companies like DocuSign and others to provide a permanent digital eyewitness to the event that is very difficult to ignore in a court.

June 29, 2009 02:36 PM #17
Rainmaker
41,796
An Bui
DocuSign - Seattle, WA

Robert, Interesting perspective. Ken Moyle, DocuSign's Chief Legal Officer, has written several blogs posts regarding the legality of electronic signatures. He discusses establishing the intent to sign, record retentionadmissibility into evidence, and authenticating paper copies of electronic records. The DocuSign system supports various methods of authentication as well as integrates with third party tools - whatever makes the most sense for the customer. For a simple NDA or acknowledgement of reciept for internal policies, email authentication makes sense. For higher stakes transactions, PINs, passwords, etc make sense.

An electronic signature is a real signature, not a signature simulation. Signatures serve an evidentiary function - to authenticate the signer and document intent regarding the contents of the document. DocuSign's electronic signatures do just that, with the aforementioned authenication process as well as the actual DocuSign signing process. The DocuSign process requires signers to adopt a unique signature and acknowledge that the purpose for signature adoption is to sign documents that are legally binding. DocuSign's yellow signature tabs mean that signers must acknowledge each clause, sub-clause, etc before the document can be fully executed. If senders and signers have not come to an agreement, they should modify the document to reflect a mutual agreement before signers sign. 

When signers click the link they've recieved via email to open the DocuSign envelope and begin the process, their activity is recorded and stored in an audit log, which is assigned a unique hash value for look up and comparision purposes in case of challenge down the line. 

DocuSign provides AES Encryption of all Customer Information Assets with all communication over SSL 128 bit encryption. Additionally, all exported documents are digitally sealed.

Furthermore, DocuSign's system infrastructure includes: SAS 70 Type II Data Center with dedicated operations team, fully redundant infrastructure 99.8% service level agreement with 100% uptime over the last 12 months running, and has passed multiple Fortune 500 Information Security Audits. 

"Think for a minute. Would you allow someone to sign a paper document if you could not see who it is that is signing the paper? Do you think it would stand up in court? Then why would you allow someone to sign a document electronically when the signature doesn't even look like the person's actual signature, and when you don't know who is sitting at the keyboard? It too would have a hard time in court."

With wet signatures faxed back and forth or overnighted from city to city, people allow someone to sign a paper document when they can't see the signer all the time. By the time the document becomes as fax-of-a-fax, the signature and content is so degraded... I absolutely agree that there's a better solution. 

That's why I'm an electronic signature and online contract execution evangelist.

- An Bui, DocuSign Social Media

July 01, 2009 12:04 PM #18
Rainmaker
254,608
Jay Thompson
Zillow - Phoenix, AZ

I'm not an attorney, nor someone trying to sell a product that identifies who is sitting in front of a computer.

I'm just a real estate broker, but I know once you go electronic signatures, you'll never go back. DocuSign rocks my world, and my clients world.

If An Bui will agree to cover her eyes, I'll even say that the price is ridiculously low.

Of course it's not all about convenience -- signatures have to be legal, binding and defensible. And electronic signatures done right the way DocuSign (and others) do them are just that.

Ever seen a contract that is faxed and re-faxed over and over? The signatures are hardly legible. We've all faxed contracts to a number, had them signed and faxed back. How do we know who is on the other end of the fax machine? The IRS doesn't seem to have a problem with electronic signatures and last I heard, the IRS can be kinda anal about stuff.

I haven't had a client on a boat sign (very cool annecdote though!). But I have had a client on a beach in Hawaii sign. I've had people sign on an airplane at 30,000 feet over the Atlantic. I've had people in foreign countries sign. And I've had the guy down the street sign.

DocuSign works. Clients **love** it. I love it. Ask me how many file cabinets I have in my office, or boxes of old contracts / paperwork. Go ahead, ask me.... The answer is ZERO. I can fit every piece of "paper" that was signed in my office last year on a freaking thumb drive! It's all backed up automatically in real time (bless Carbonite.com too) to a secure off-site location. So, God forbid, if my office burns to the ground every single real estate contract related document ever used in my office is immediately available for retrieval.

Try doing that with paper.

July 01, 2009 02:51 PM #19
Anonymous
Anonymous
Anonymous

An Bui,

Thanks for the response.  I understand the issues you mentioned concerning intent to sign, record retention, admissibility, etc., but at the core of the problem is how to determine exactly who is signing the document.  In the legal world, there is an extraordinary degree of pickiness about the little details that does not exist outside that hot house environment.  President Clinton's famous quote, "That depends on what the definition of 'is' is," comes to mind in particular.  One will recall the endless days of testimony and highly technical testimony in the O.J. Simpson murder trial pertaining to DNA evidence and how that yielded a jury decision that seemed so very opposite of what most expected.  The fate of contracts, agreements, and the like hinge on the details, and if someone cannot prove that it was Joe Smith who actually sat at the computer and signed the agreement online, there is reason to believe the contract could be regarded as being unenforceable if a dishonest person were to try to wriggle out of it. 

The challenge that any party to a business transaction has is making sure that agreements "stick."  That is why we almost always have written agreements in business transactions.  We want to be able to point back to each item that was part of the agreement and if necessary hold the other party's feet to the fire to ensure that the terms that were agreed to at the start remain respected for the duration of the agreement.  Things that jeopardize that certainty are things like signing under duress, signing without understanding the terms of the contract, having been induced to sign by undue influence, or having the contract signed by a person not authorized to do so.

If I were entering into a contract which entailed a digital signature being applied to the document and if I could not directly witness the signing, I would want to have a witnessed and notarized written document delivered to me by certified mail bearing the wet signature of the counterparty swearing under penalty of perjury that he did indeed sign that contract electronically on a specific day and at a specific time.  Without that I would have some doubt that I could later press him to comply with the terms of the contract, especially if he did not strike me as being particularly trustworthy to begin with.  Anyone who has ever been involved in a transaction to purchase real estate where an addition to the house was not permitted by the city or where there was an undisclosed wet basement problem or where there was a rodent infestation not discussed before the sale will understand the importance of being able to enforce a contract.

The intent of my initial response to Nick was to point out the weaknesses with electronic signatures.  When the issue of security was raised, I pointed out that there are numerous opportunities to breach security on most networks used by consumers today.  Nothing is ironclad.  Nothing is perfectly sure or guaranteed.  It there were such a thing, everyone would buy it or use it, and there would be no need to discuss it. 

What I wish to conclude with is that while electronic signatures, both the visual and the non-visual versions, are convenient and the method of delivery reasonably secure from a perspective of web security, and while the data is being preserved in a way that is likely to keep the documents on file in an authentic form for legal purposes, there is still that nagging issue of identifying the person signing the document.  There are simple ways to overcome that difficulty such as using the certified, notarized letter I mentioned above, but some may construe the inconvenience that such additional measures introduce as being tantamount to throwing a wet blanket on the process.  I don't believe that's the case.  I thnk it is simply being candid and taking prudent and appropriate steps to protect one's interests.

July 01, 2009 04:28 PM #20
Rainmaker
254,608
Jay Thompson
Zillow - Phoenix, AZ

Robert -

I hear what you are saying. What I don't understand is how what you are saying only applies to electronic signing and not the wet signature signing we do every day?

You wrote:

If I were entering into a contract which entailed a digital signature being applied to the document and if I could not directly witness the signing, I would want to have a witnessed and notarized written document delivered to me by certified mail bearing the wet signature of the counterparty swearing under penalty of perjury that he did indeed sign that contract electronically on a specific day and at a specific time.

Would you make this same requirement if you received a hand-signed contract where you didn't directly witness the signing?

Collectively as an industry, we fax or fed-ex blank documents to be hand signed on a daily basis. You don't know who is hand-signing the document in this situation any more than you know who is electronically signing a document.

 

 

July 01, 2009 04:47 PM #21
Anonymous
Anonymous
Anonymous

Jay & Francy,

I don't think I would want the same kind of corroboration with paper contracts bearing a wet signature because the courts have taken a different stance with regard to paper documents.  They have come to agree that handwriting analysis by an expert witness can be used to establish the authenticity of a wet signature.  They also accept chemical anaylysis of the ink used as being evidentiary.  So, in court one could call witnesses in these two areas to establish who the signer of the document was. 

With electronic documents, all bets are off.  For instance, the courts regard printed copies of e-mail messages as not meeting the requirement to produce e-mail messages in a discovery process.  The reason is that e-mail is electronic data.  It includes additional information not seen on the screen that would tell someone how it passed from one person's computer to his ISP server and then to yet another server until finally it arrived at the recipient's mailbox.  It would include the dates and times of each stop along the way.  This establishes an audit trail that cannot be provided by a printed copy of the message body.  Moreover, the whole nature of our adversarial legal system contains a certain degree of distrust of the evidence offered by any witness.  We permit cross examination of witnesses because it is assumed that there needs to be a mechanism to wring out the falsehood from testimony and to expose it to the light of day since including such in one's testimony says something about the witness offering it.

Since courts handle these differing forms of evidence (paper and electronic) differently, the measures we have to take to anticipate such treatment if we ended up in a court (God forbid!) must be stringent enough to allow us to introduce evidence that we believe will assist our case.  In light of this need, it has always amazed me that the real estate business has relied on faxed documents containing scratchy images of signatures that likely could never be verified in court.  At some point there needs to be an original document bearing an original signature that can be verified.

I understand that urgency of getting documents signed promptly.  My father at age 87 is still an active producer in the real estate sales business, and his tales of getting signatures on documents still make me cringe when I hear them, but I understand the urgency.  Mr. X won't sign until he sees the document signed by Mr. Y., or rather Mr.X won't sign until his agent sees the document signed by Mr. Y sent by Mr. Y's agent.  In such cases, the web of trust is really what is at work.  No one would take a fax to court and say that it was a contract; the judge would want to see the original.  Agents want to see some sign that the process is moving forward, so believing other agents to be bound by the same professional ethics as himself, he will encourage his own client to sign a document on the strength of a fax of a signed document.  From a legal perspective, that can be perilous sand pretending to be the foundation of a good deal.

July 01, 2009 05:16 PM #22
Rainmaker
254,608
Jay Thompson
Zillow - Phoenix, AZ

"At some point there needs to be an original document bearing an original signature that can be verified."

I don't recall ever seeing a contract with original signatures of both parties. Perhaps the fact that original and notarized signatures are required on closing documents, deeds and title transfers is sufficient. I don't know, I'm not an attorney.

I do know that attorneys for the Arizona Dept of Real Estate have made it perfectly clear that electronic signatures are legal. Mileage may vary in other states.

July 01, 2009 06:32 PM #23
Rainmaker
254,608
Jay Thompson
Zillow - Phoenix, AZ

"They also accept chemical anaylysis of the ink used as being evidentiary."

Really?

So if I sign a contract with a 25 cent Bic pen chemical analysis of the ink can trace that pen to me?

That's really hard to believe.

July 01, 2009 06:41 PM #24
Rainmaker
204,238
Nick Bastian
Realty Executives - Tempe, AZ
Real Estate Agent - Tempe

At some point there needs to be an original document bearing an original signature that can be verified."

I wonder how this would change Line 330 of our residential resale real estate purchase contract which states:

"Copies and Counterparts: A fully executed facsimile or electronic copy of the Contract shall be treated as an original Contract."

 For me, I also wonder if it is safer to assume it would be easier (or more likely) to trace an ip address than trying to analyze a bic pen or a document that has been faxed from one agent to another to an escrow officer to a lender to .... Just sayin'

 

July 01, 2009 07:45 PM #25
Anonymous
Anonymous
Anonymous

Nick,

The wording of the residential resale real estate purchase contract sounds correct to me.  It says, "A fully executed facsimile...of the Contract shall be treated as an original Contract."  It does not say, "A facsimile of a fully executed Contract shall be treated as an original Contract."  There is a big difference in meaning. 

Also, the section that defines Copies and Counterparts is there so that it is clear what the various parties to the transaction should expect to receive.  It does not mean that there is no original Contract; in fact there MUST be an original contract if there are copies of it.

Insofar as the ink of the pen, clearly the pen's ink doesn't trace the signature to anyone, but if it is established in court that the ink in the signature came from a BIC pen and the purported signer of the contract owned a BIC pen, then in the context of all the evidence it simply adds one more nail to the coffin.

Indeed, the deal is not done until it closes, and then I am sure that all the fine points of legality of the documents are met.  All the other papers that one signs leading up to the actual closing are usually obviated by the blizzard of loan documents that one must sign and have notarized at closing. 

So, in short, while the industry has been quite comfortable for a period of time using faxes and less than certain methods of proving who signed what, the fact remains that if one goes to court in today's legal environment, they will be in for a very, very rude awakening.  They can expect litigation holds that can stop a business in its tracks, e-discovery costs that could bankrupt them, and standards of document authenticity that they may not be able to meet even with their faxes and e-mail print outs in hand.  If you don't believe me, spend a few bucks and talk to an attorney about it.  It's worth the money to get the big picture especially if it could affect your business.

July 02, 2009 12:39 AM #26
Anonymous
Anonymous
TGonser

Interesting thread on what I will call the 'ability to enforce' a signed writing.  DocuSign has focused its efforts on this over the years.  In fact, a Federal Act called ESIGN (Electronic Signatures in Global and National Commerce).  This Act gives a PROPERLY EXECUTED electronic document the same legal effect as a paper contract.  In fact, it goes so far as to say that an electronic contract cannot be denied legal effect solely on the basis it is electronic. In other words, you can't say "I won't accept your electronic agreement because it is electronic".  Now, to address some of the comments/ideas in the above thread.

1. First - the concept of 'Relative Risk'.  Of course nothing is perfect. However, DocuSign creates a lower 'relative risk' than fax signed contracts, or even paper signed contracts.  I think this because we tested it twice in 'Mock Trials' with actual sitting judges, attorneys, etc.  In both cases, the court found that the overwhelming evidence generated by DocuSign transaction provides a much lower 'relative risk' when compared to a paper contract, or a fax contract.  DocuSign provides an encrypted audit log of all events that happened - from your email address, IP address, time-stamps, and authentication measures.  This coupled with the fact that it is literally *impossible* to change a contract signed in DocuSign makes it a very strong medium for signing contracts - again comparing this to paper/fax. The DocuSign audit trail and encrypted documents create a very strong picture of what happened.

Lets compare this to paper. My signature is different every time. Nobody knows what it is SUPPOSED to look like so, what value is it to them?  Someone asks me to 'sign this and fax it back' - no way to tell if I changed something, if that is my signature, etc. Best thing you have is a fax number on the document, from my office or Kinkos.. lots of good that does you..  Literally ZERO evidence, and a pain to handle. Couple this with the fact that my only fax is at work or Kinkos, and you have a very real risk that I have ID theft options.  (88% of all ID theft comes from paper according to Javelin)  In court, a handwriting analyst will provide a very SUBJECTIVE guess as to who's signature is represented.

KEY THING TO UNDERSTAND: The fact RE uses fax documents for transactions says that they are 'willing to take the risk' that something will go wrong in exchange for going faster, just as merchants moved online to take credit cards 10 years ago, even tho it has higher cost and risk. It is a business decision. DocuSign just allows the transaction to go FASTER, but lower the risk profile.

2. DocuSign Additional Authentication - DocuSign allows the sender to define the level of authentication they wish their signers to pass in order to sign.  This is really an unlimited list of tools, but out of the box we offer 3 - email auth, access code (a one-time password), and ID Check - a service provided by RSA that nearly every large bank uses to ID remote users for financial transactions.  There are others, but they require integration.  These 3 may be used one-off or all together. There is actually nothing preventing users from going even farther and using the in-person mode of signing to actually notarize if they wish.   Going along with 'relative risk' because 99% of real estate transactions happen on paper or fax, these additional levels of authentication are not needed, but they are available if the sender wishes to increase the authentication level on a document.  

3. Counterparts - Because we are all signing the SAME DIGITAL MASTER, DocuSign eliminates the messy need to sign in counterparts.  DocuSign enables all parties to sign the same document no matter where they are. Once signed, a single master record exists, and all signers are given a copy.  DocuSign is even able to handle Chattel - 'enotes' and 'eleases' - which need to be managed even TIGHTER than standard contracts like RE agreements.

4. DocuSign and ESIGN.  We do all the work behind the scenes to ensure your contracts will be ESIGN compliant - from use of the Consumer Consent, adoption of the signature, exact placement, audit trail, encryption, hashing, and managing records in secure environments.  All of this work is done ON EVERY TRANSACTION so that if anything ever does go to court, generating all the 'evidence' of signing can be done in a tiny fraction of the time it would take with a paper or fax contract.

So, the net-net on DocuSign -

 

  1. Faster than paper/fax certainly, and much more convenient for the customer
  2. Lower 'relative risk' than paper/fax, lower risk of ID theft due to paper flying around kinkos or the office
  3. Integrated Authentication tools allow sender to determine what level of auth is needed, if needed
  4. Eliminates the need to deal with counterparts all together
  5. Warrants that contracts executed through the system are compliant with Federal ESIGN Act
  6. Used by Fortune 100 companies for millions of transactions per year
Finally, DocuSign has ALWAYS supported people retaining their own counsel to evaluate and compare DocuSign to paper, fax, and other methods.  It always results in a very positive finding that says DocuSign provides a lower 'relative risk' -  no matter if you are working in RE law in California, or worldwide contracts through a Fortune 100 company.

TG - DocuSign

 

July 02, 2009 10:30 AM #27
Rainmaker
254,608
Jay Thompson
Zillow - Phoenix, AZ

"Insofar as the ink of the pen, clearly the pen's ink doesn't trace the signature to anyone, but if it is established in court that the ink in the signature came from a BIC pen and the purported signer of the contract owned a BIC pen, then in the context of all the evidence it simply adds one more nail to the coffin."

That would be one flimsy nail.

According to various sources across the internet, more than 100,000,000,000 (that's one hundred BILLION) BIC pens have been sold.

Attorney: Mr. Thompson, according to chemical analysis of the ink in the signature on this contract, it was signed with a BIC pen. Have you ever purchased or owned a BIC pen?

Mr. Thompson: Yes, I have purchased a BIC pen. There are another 99,999,999,999 out there. What's your point?

July 02, 2009 11:12 AM #28
Rainmaker
204,238
Nick Bastian
Realty Executives - Tempe, AZ
Real Estate Agent - Tempe

So, a fully executed contract does not mean that all signatures have been obtained? It means that all parties have signed, in front of a credible witness?

Maybe we should read the following few lines, as well.

"This Contract and any other documents required by this Contract may be executed by facsimile or other electronic means and in any number of counterparts, which shall be effective upon delivery as provided herein"

I have taken many contract classes concerning our residential resale purchase contract and have had discussions with some of the people that wrote the language. It is my belief that they thought through the process and that the intent is clearly to acknowledge these electronic signatures. Proving anything in a court of law ( maybe our mediation process would be more clear as they would *probably* be familiar with the *intent* of the situation) can be difficult and any number of things can be argued effectively. I might even argue that a complete and legible file is far more effective than an incomplete or non-legible file.

While this post was written in April of 08, in June of 08 I read another very informative post mentioning the Electronic Signatures in Global and National Commerce Act and the Arizona Electronic Transactions Act which helped to further my confidence in the use of electronic signatures in my business. I have researched the company I use for electronic signatures and feel that I am, in no way, jeopardizing my career or the best interest of my clients.

I appreciate the fact that many people have differences of opinion. It makes for some great discussion. :-)

July 02, 2009 12:07 PM #29
Anonymous
Anonymous
Anonymous

TG,

I have no doubt whatsoever that DocuSign's relative risk is far, far less than faxed documents which I personally regard as nearly worthless.  Signatures are often not even legible in faxed copies and a court would regard such as specious if that is all one had to hang his hat on.  E-SIGN compliance is also not in question in my mind since there is nothing different from what DocuSign does from what Thawte does really.  Both are signing authorities that either certify or warrant that a party has produced acceptable information and that either an unique digital certificate or a block of unique digital data has been assigned to that party and that party alone.

What I am simply saying that in the way it is used and the way it has been discussed in this forum as having been used, it does not identify the person sitting at the computer.  How many times have people read or heard of persons in a trial claim innocence based on the theory that someone had stolen their identity or that someone adopted a guise designed to impersonate them?  The same claim can be made with respect to digital signatures.  If a particularly diligent and aggressive attorney for a claimant were to pursue the chain of custody of documents using the toolbox of attorney tools under today's post-2006 Federal Rules for Civil Procedures, it is entirely possible that he could establish satisfactorily to a court that a signature is not valid no matter how much the data after the event of signing is preserved and guarded.  If the wrong person signed the document, that's pretty much all there is to say about it.  With the three out-of-the-box methods of additional identity authentication offered (email authentication, a one-time password, or an ID Check), none of them still prove that it is John Smith sitting at the computer.  If John Smith's machine is left on and someone else opens his e-mail client, the e-mail authentication would be easily bypassed.  If the one time password has been written on a piece of paper and the interloper finds it, the security is subverted.  If John Smith's computer is left on and he left his wallet on the desk, the ID check can be subverted. 

The real test of identity today when it comes down to life and death issues is a DNA test.  Even then such evidence is always expressed as a percentage of probability of a match.  E-mail, passwords, and ID don't come close to the level of positive identification that DNA tests provide, and a legitimate question to ask is if such should be required for ordinary commerce.  Most like Jay & Francy who have responded above, provide responses that imply that this is all much ado about nothing.  Others would say, "Hmmm...maybe this needs some looking at."

The fact is that an attorney in a courtroom, who is motivated by the large fees he will collect for his billable hours, will make sure there are plenty of billable hours to show.  The way he does this is to subpoena records, both paper and electronic.  He then traces down every conceivable break in the chain of custody and presses for the court to disallow admission of evidence that could be unfavorable for his client's case.  That is a fact. 

It is the behavior of officers of the court (attorneys) that should be a primary consideration in testing the adequacy of any business process because that is where those processes legality and protection will be tested if the parties disagree, and surely if there is an area of commercial activity where there is more than an occasional disagreement, it is the area of real estate.

Unfortunately, I will have to bow out of this discussion now since I actually have a business to run.  If some wish to continue the discussion offline with me they can look up my profile and communicate with me directly.

July 02, 2009 02:12 PM #30
Rainmaker
254,608
Jay Thompson
Zillow - Phoenix, AZ

"Most like Jay & Francy who have responded above, provide responses that imply that this is all much ado about nothing"

For the record, it's Jay making these comments. Francy has nothing to do with it.

I'm not sure where I implied this was much ado about nothing.

I'm simply stating that the State of Arizona (the only state I really care about) has said that electronic signatures on real estate contracts are perfectly legal. I've also said the concern Robert is speaking about -- chiefly that you don't know who is sitting at the keyboard -- is also true of the way the vast majority of real estate contracts are completed today.

Perhaps I'm putting too much trust in the flock of attorneys that write and review our contracts and procedures. Perhaps I'm putting too much faith in humankind. But personally, I don't lose sleep over my use of electronic procedures, nor do I dwell on the potential problems that could occur in court from them. Real estate is rife with oportunity for people to sue. Of course that is a concern. I happen to feel the validity of electronic signatures is way down the list of potential pitfalls. Of course someone who sells electronic verifcation systems will feel differently.

I actually have a business to run too. Discussing things such as this are part of running that business. Given that your business is selling electronic verification systems Robert, I'd think you'd welcome these discussions as well.

July 02, 2009 04:23 PM #31
Anonymous
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Rainmaker
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Nick Bastian

Real Estate Agent - Tempe
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