Executing Contracts in the Midst of COVID-19
In the wake of the coronavirus (COVID-19) outbreak, businesses have been forced to transition away from in-person meetings and gatherings. As a result, the ability to use electronic signatures, or e-signatures, as well as electronic or remote notarization in ongoing transactions is important to understand. As such, below please find a brief summary of the current laws and regulations regarding e-signatures, electronic notarization and remote notarization:
Current Law:
- If federal law applies to your transaction, e-signatures are governed by the Electronic Signatures in Global and National Commerce Act (ESIGN Act). The ESIGN Act provides that electronic signatures are treated the same as original signatures, in certain transactions, when the contract parties agree to their use.
- If state law applies to your transaction, some form of the Uniform Electronic Transaction Act (UETA) will control. Similar to the ESIGN Act, UETA provides that electronic signatures are legally binding when the contract parties agree to their use. Currently, UETA has been implemented in every U.S. state, except New York, Illinois and Washington.
- Prior to the COVID-19 outbreak, 22 states have passed legislation permitting remote notarization using Skype, FaceTime, Zoom or other similar real-time audio-video conferencing systems. In the following 12 states, remote notarizations are currently authorized: Idaho, Kentucky, Minnesota, Montana, Nevada, North Dakota, Ohio, Oklahoma, South Dakota, Tennessee, Texas and Virginia.
Steps Being Taken:
- Through recently signed executive orders, states such as New York, Georgia and Connecticut have permitted the use of remote notarizations. Similarly, Florida – by action through the Florida Supreme Court – has authorized the use of remote notarizations during these unprecedented times.
- On a federal level, Congress is currently considering the Securing and Enabling Commerce Using Remote and Electronic (SECURE) Notarization Act of 2020. If implemented, the SECURE Act will permit electronic and remote notarizations, while also establishing minimum standards for transactions affecting cross-border commerce. The legislation, as introduced, would authorize every notary public in the U.S. to perform notarizations remotely.
Due to the fact that the laws and regulations regarding e-signatures, as well as electronic and remote notarizations, are currently fluid and tend to vary on a state-by-state basis, individuals and businesses should consult with an experienced contract attorney prior to implementing the electronic procedures discussed above.
Our firm stands ready to serve our clients and friends in these difficult and unprecedented times. While following all federal, state and local government directives and public health and safety protocols, our offices are fully operational, and we remain ready and able to provide service. If you have any questions about the legal issues set forth above or other implications of COVID-19, please do not hesitate to contact us for help.