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COMPUTING

From...
Computerworld

Signed, sealed, delivered... online

October 11, 1999
Web posted at: 2:26 p.m. EDT (1826 GMT)

by Rick Overton

(IDG) -- Trading stocks online is nothing new. But until recently you couldn't open an online brokerage account without signing and mailing sheafs of paper. You could file your taxes online, but you still had to sign and deliver a paper copy afterward. New laws are giving electronic documents the same legality as their paper counterparts.

Legal gray area

Of course, electronic contracts have been in use for years -- think of the 'I Agree' buttons you click when registering software. But those agreements have been happening in a gray area of the law. "Everything you're seeing now in the courts and the legislatures is aimed at making the Internet a legally viable medium," according to Harry Rubin, head of the Internet law group at Shaw Pittman in Washington, D.C.
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The key to putting e-contracts on the same legal footing as paper contracts is an array of digital signature technologies -- including public and private key encryption and authentication certificates -- that enable you to prove you're you without being physically present. Starting with Utah in 1995, 45 states have passed laws legitimating digital signatures. For example:

  • A California law that was passed in August allows online brokers to accept electronically submitted brokerage agreements.

  • Pilot programs underway in Utah allow citizens to file court documents and review records online. In the near future, they'll also be able to renew their driver's licenses and pay fees and fines online.

  • Though you can currently file your federal income taxes online, you must still mail in a paper copy of your return. Starting in 2001, however, a pilot program will allow 5000 IRS employees to file their federal returns without sending a hard-copy follow-up.

Valid signatures

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Several bills pending in Congress would extend the validity of electronic signatures. The most promising may be H.R. 1714, from House Commerce Committee chair Tom Bliley (R-Virginia). The law would give states five years to legalize digital signatures and standardize their laws around the Uniform Electronic Transactions Act. H.R. 1714 would let you e-mail a contract from any state to any other state, or "sign" it on a Web site; the resulting contract would be legally valid.

Laws regulating digital contracts still have a ways to go, however. For now, the legal status of an electronic contract created by parties in different states is unclear. "That issue is going to remain an open question for some time to come," says attorney Tom Lebens of San Diego, who characterizes the potential conflict-of-laws ramifications as "a quagmire." Furthermore, mortgage law and the rules that govern wills and estates have been explicitly excluded from coverage under most new state laws, so don't plan on using www.willandtestament.com anytime soon to settle your estate.

The simple verdict: Don't write off that pen just yet.



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September 27, 1999
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August 17, 1999
U.S. Census OKs Web filing test
February 23, 1999
Online tax filing on the rise
April 23, 1999

RELATED IDG.net STORIES:
Calif. adopts digital-signature law
(Computerworld)
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Washington tackles Internet law
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Year 2000 World
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