Documents You Can’t Electronically Sign: Key Exceptions to Understand

What is an Electronic Signature?

What is an electronic signature?
Electronic signatures (or simply, e-signatures) are similar to handwritten signatures but are created and stored electronically. They can be as simple as a scanned handwritten signature or inputted digital signature, or consist of a written name generated by the signer. They may range from a handwritten signature written on a tablet, to typed in initials, to a click of a mouse or touchpad, to a scanned signature uploaded in PDF documents. Any sound, symbol or process attached to or logically associated with a contract or record and executed or adopted by a party with the intent to sign the record qualifies as an e-signature. Most importantly, e-signatures carry the same legal weight as handwritten signatures for validly executed contracts and other legal documents . While the particulars vary state by state, most states have since followed the federal government’s lead to allow the use and enforceability of e-signatures by enacting the Uniform Electronic Transactions Act (UETA), and have established regulations outlining what is and what is not permitted for e-signatures. Under UETA, unless excluded from adoption, a "contract may not be denied legal effect, validity, or enforceability solely because an electronic record was used in its formation." UETA presumes the enforceability of electronic signatures unless the contract explicitly excludes e-signature use in its formation. Even where the use of e-signatures is explicitly prohibited by contract, parties can later amend the contract to permit their use if they so agree.

General Exceptions on Electronic Signatures

There are certain documents that, under federal and state law, are excluded from the ability to sign electronically. A general rule of thumb is that records that must be filed with a court or a government agency are not eligible to be signed electronically. The following is a short list of examples of documents that are typically excluded under federal law and state law from being signed electronically:
wills, trusts, codicils, living wills, and powers of attorney that are required to be notarized under state law (however, some states such as Virginia and Alaska provide an explicit statutory exception for electronic wills, notaries or both); records relating to adoption; certain records in connection with a proceeding or filing under Title 11 of the United States Code (bankruptcy); notices of final determinations concerning a worker’s compensation claim under 5 U.S.C. Sec. 8128; notices of final determination under 38 u.s.c. sec. 4973 (relating to certain veterans benefits); notices of final determination on certain services or benefits under 38 38 u.s.c. § 8111(c) (relating to eligibility for certain veterans benefits); signature of a surety on a bond procured under the contract guarantee (or performance bond) provisions of the Small Business act (15 u.s.c. 634(b)(6)); a written acknowledgment of a garnishee’s receipt of any notice or order under the garnishment laws or any other notice or order to an employer in response to a garnishment (i.e., under 15 u.s.c. 1674); documents and notices issued under Section 313 of the Railroad Revitalization & Regulatory Reform Act (see 45 u.s.c. 825), which encompasses claims and defenses secured by railroad freight equipment utilized for interstate transportation; prerequisite performance test results for fluoroscopic x-ray at the point of use, which are used to demonstrate compliance with the provision of 21 C.F.R. 1020.32; declarative rulings from the S.E.C. (17 C.F.R. Part 202); a notice of final determination appealing to the Patent Trial and Appeal Board under 35 U.S.C. 135); claims and defenses secured by railroad freight expense utilized for interstate transportation (see 45 u.s.c. 825); written "notice" of a consumer’s right to cancel a telemarketing order under the Telemarketing Sales Rule, 16 C.f.r. 310.4(a)(5), which requires that such notice generally be hand or legibly typed; an acknowledgement that the consumer has received the written telemarketing material, which is required to be sent to the consumer under the Telemarketing Sales Rule, 16 C.F.R. 310.4(a)(5); and certain notices under Title 38 (see 38 U.S.C. 7350 note).
In addition, certain states also exclude additional documents from being signed electronically such as a mortgage or deed of trust under Virginia law, in addition to the documents listed above on the federal level.

Real Property Agreements

The same holds true for mortgages, rents and leases of real property. In these instances, some states mandate that the creation of a valid interest in real property requires a deed signed the grantor and an agreement expressly stating that the deed is intended as a mortgage. For example, in Delaware, a mortgage must be in writing, signed by the mortgagor and duly attested. Similarly, under Illinois law, a mortgage is not enforceable unless it is signed by the mortgagor. And in Michigan, a deed of conveyance of real property must be signed and sealed by the grantor.
With respect to leases, many state laws require the lease or sublease to be signed in writing. For example, Pennsylvania provides that a lease of real estate for a term longer than three years is void except in certain cases such as a lease under seal in writing. A lease for a term of less than three years must be in writing and signed by the landlord and tenant.

Court Filings and Documents

Certain court documents and legal filings continue to require handwritten signatures for a number of reasons. While electronic signature technology can ensure the signatures are original, the technology does not yet meet the required "witnessing" requirements for each document. This will likely change as electronic and digital signature technologies advance into the future; however, today, US law (at both the federal and state level) requires that witnesses be present to witness these sorts of documents.
Affidavits, depositions, acknowledgments, and other key legal documents all require face-to-face witnessing, whereas eSignature technology is still lagging behind, despite its many advantages. Until the technology can sufficiently replicate the witnessing process, which includes authenticating the identity of the signee, these documents must be signed by each party by hand, in person, with witnesses present.
The fact remains that, as of today, affidavits require actual witnesses to confirm the document itself. The most common affidavit is the attested affidavit, which is a sworn statement made voluntarily by the signer. In order to ensure the signer is aware of the affidavit’s consequences and that he or she is signing voluntarily, certain parties must witness the signing, much like in any formal legal proceeding, including:
In each case, a document must confirm that the affidavit was made voluntarily (and in some cases, involuntarily), that witnesses were present to observe the signature, and the party administering the oath. These documents must be prepared to include all this information, not just the signature, when being filed with courts.
In some cases, courses of action also require written statements (voluntary or involuntary) accompanied by affidavits that contain a case number and state the witness’ relationship to the signer.

Documents Related to Family Law Matters

Family law, or domestic, documents are another category in which the ability to sign electronically is limited. Documents concerning divorce, adoption, custody of children or property division may require the parties to be present in person and sign physically.
Divorce Papers – Divorce papers, including applications or petitions for divorce, marital settlement agreements, and agreed judgments, fall very much in the category of documents that are not appropriate for electronic signature. Parties may be required by a court in their jurisdiction to appear personally, in front of a judge or clerk, to sign the documents relating to their divorce. The rationale for this is as follows: If parties are going to have a quick divorce and will travel to the courthouse to sign the divorce papers, they may be required to sign in person in front of the presiding judge or clerk in the courthouse. Doing so ensures that the parties are of sound mind and understand the nature of their actions. Failure to appear in person to sign divorce papers may result in the court denying a request for divorce , or voiding a divorce previously granted without the personal appearance of the parties. In addition, a party who must appear and sign divorce papers in person is generally required to bring a valid government-issued photo ID. Many marriage licenses are issued by government units that do not have the ability to process documents electronically, so the couple is required to appear and sign papers at the courthouse. Adoption Papers – All parties present are usually required to sign adoption papers in person. Adoption proceedings must comply with the requirements of the Uniform Adoption Act. This act includes a requirement that the adoptive parent, the adoptee, the birth parent(s), and other adults appear in person to sign, and must execute all adoption papers, including relinquishments, consents, agreements, receipts, agreements and notices, before the adoption decree is entered. Adopting parents who fail to appear in person and execute adoption papers may find their adoption voided.

International Documents

Certain countries and territories may have laws or regulations that prohibit the use of electronic signatures on specific international documents. For instance, passports, visas, immigration papers and tax-related documents may need to be signed in ink, even in countries that generally accept electronic signatures. In addition, there are many international treaties that limit the use of electronic signatures for particular documents. One of the best-known agreements is the Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents. Specific provisions within this 1961 treaty require that signatory countries honour the authentication of documents by states other than their own. However, it also states that treaties cannot be construed as requiring future signatories to accept documents authenticated via electronic means. As a result, passports signed using an e-signature may not be accepted when travelling from a country that has not signed the Hague Convention to one that has.

Conclusion and Looking Ahead

The continued development and increase in use of electronic signatures and the types of documents for which they may be valid continues to move quickly. As evidenced by the above list, given that legislative authorities seem very interested in increasing their use, it is plausible that the existing limitations may be relaxed significantly to meet pressures for expedited transactions. Since the beginning of the 2000s such transaction pressures have increased with the advent of globalization and in parallel so has the proliferation of information technology solutions accelerating the speed of business on a global scale. Although not as immediately pressing, there is similar economic pressure in the real estate world as well. Lenders and other vendors interested in closing loans with speed and efficiency allow banks and consumers to apply online , but documents must be executed in the physical world. Likewise, with the trend towards paperless transactions in the real estate sector, mortgages and liens still must have wet signatures in most jurisdictions.
Although the existing limitations on the use of electronic signature exist to preserve the integrity of the documents involved, it is fair to expect that some of these will loosen. Certainly in the United States, there appears to be continuing regulatory movement towards expanding the range of acceptable documents. At the state level, legislatures are continuously working to remove barriers and expand the possibilities around e-signatures. The coming decade could bring new breakthroughs in other areas that may impact the use and acceptance of electronic signatures in the limitations mentioned above. It seems reasonable to expect several large changes in the coming years.