Clinton signs e-signature bill into law

June 30, 2000
Web posted at: 11:49 a.m. EDT (1549 GMT)

PHILADELPHIA (CNN) -- President Clinton took the unusual step Friday of ushering in a revolution in the formalization of Internet commerce by signing the long-awaited e-signatures bill into law -- symbolically using new digital signature technology to do so.

The bill accords online "electronic" signatures intended to complete legal agreements or commercial transactions the same legal status as a formal signature scrawled out on a paper document.

"The Electronic Signatures Act shows what we in Washington can accomplish when we put progress ahead of partisanship," Clinton said Friday. "Soon, vast warehouses of paper will be replaced by servers the size of VCRs."

But Clinton's gesture was more symbol than sea-change -- he first signed the bill in the same manner in which laws have been enacted for well over 200 years, with an ink pen.

"The bill deals with commercial contracts. It doesn't make an effort to change the way in which laws can be signed," was White House spokesman Jake Siewert's explanation of why the president wrote out his "William J. Clinton" the old-fashioned way.

Clinton signed the bill into law late on Friday morning at Philadelphia's Congress Hall.

With Clinton first signing the bill the way John Hancock autographed the historic document that established the United States as a nation with a pen, he quickly shifted gears to demonstrate the digital signing technology that will let consumers who shop online for a new car or home mortgage seal their deals with a few taps on their computer keyboards.

Both the House and the Senate passed e-signature bills last year, but it took months of negotiation between Congress and the Clinton administration to work out a compromise that protected consumers from abuses without overly burdening businesses with new regulations.

The final version of the bill, which passed 87-0 in the Senate and 426-4 in the House, requires a consumer to agree to electronically signed contracts and consent to receiving records over the Internet. Companies must verify that customers have an operating e-mail address and other technical means to receive information.

"This legislation will eliminate the single most significant vulnerability of electronic commerce, which is the fear that everything it revolves around ... could be rendered invalid solely by virtue of their being in electronic form," said Sen. Spencer Abraham, a Michigan Republican who is a key supporter of the measure.

"Electronic signatures and records will help grow the digital economy by giving American consumers greater confidence in their online business transactions," House Commerce Committee Chairman Thomas Bliley, a Virginia Republican, said in a statement.

The legislation takes effect Oct. 1. As of March 1, 2001, companies could begin the electronic retention of legal records such as mortgages and financial securities.

"This is an opportunity for the president to showcase this new technology and the possibilities it offers to business and consumers," Siewert said. "The government can do e-signatures when it comes to commercial transactions, and this law anticipates that."

For the record, Clinton has signed his name electronically before: In September 1998 in Dublin, Ireland, he and Irish Prime Minister Bertie Ahern sat at matching laptop computers and used "smart cards," personalized codes and digital readers to electronically affix their signatures to an electronic commerce agreement.

The Associated Press contributed to this report.