Companies have recognized the significant advantage that the Internet offers in terms of reaching customers, managing their supply chains, and implementing just-in-time inventory management systems. However, the issue of electronic contracts has been difficult from the beginning of electronic commerce. There are many types of electronic contracts that exist on the Internet, including credit card agreements, leasing agreements, and traditional contracts entered into between one company and another. Verifying signaturesùthat is, ensuring that the signature attached to a contract is validùhas always been a key part of conducting business; when the parties are located around the world and without physical contact, however, it becomes even more challenging. This research considers the Electronic Signatures in Global and National Commerce Act, also known as the Federal Electronic Signature Act or E-Sign, and its effect on electronic commerce.
There are many challenges associated with online contracts. The most obvious is ensuring that the person signing the contract is, in fact, the person whose name appears on the contract. When contracts are executed in person, all parties to a contract can request identification from the other parties to ensure that the individuals are who they say they are. Notaries are often used to verify signatures in order to reduce the likelihood of fraud in these types of transaction, for example. The fax machine introduced difficulties into the contract process since it became difficult to ascertain who was signing the contract that was being faxed, and many companies simply refused to accept facsimiles for contract purposes. Original signatures were required.
The proliferation of the Internet and the significant increase in globalization led almost inevitably to a need to verify signatures for electronic contracts. Obviously, original signatures could be cumbersome to send back and forth around ...