Symbolically penning his John Hancock with the swipe of a smart card, US President Bill Clinton passed the electronic signatures act on Friday making contracts signed on computers equal to those sealed in pen and ink.
"Online contracts will now have the same legal force as equivalent paper contracts," Clinton said in the signing ceremony near the place where America's two bedrock state papers -- The Declaration of Independence and the Constitution -- were signed with the ink-on-paper names of the United State's founders.
The president symbolically linked the quill pens used to sign those charter documents with the wallet-size, chip embedded plastic card he used to place the name "Bill Clinton" on a computer screen under the text of the "Electronics Signatures in Global and National Commerce Act."
Because the new law applies to commerce, not bills approved by Congress, Clinton first signed the paper version of the legislation the old-fashioned way, with an ink-filled pen.
Clinton said he believes that electronic signatures and Internet commerce are important new tools of the global and national economies.
"With the swipe of a smart card and the click of a mouse, [customers] will be able to finalize mortgages, sign insurance contracts, or open brokerage accounts," he said.
"Firms across America are moving their supply and sales channels online, improving customer service and reducing costs," the president said. But contracts remained bound to pen-and-ink signatures to be legally enforceable.
By making electronic signatures fully valid, he said, "companies will have the legal certainty they need to invest and expand in electronic commerce."
"Eventually, vast warehouses of paper will be replaced by servers about the size of VCRs," he said, speaking from the floor of the old House chamber in Congress Hall, where Congress met for a decade before moving to Washington in 1800.
He inserted a card encoded with his signature into a computer and entered the code name "Buddy" -- which happens to be the name of his dog.
Clinton first signed the bill on paper, then did his own card-swiping and mouse-clicking, expressing apparent relief when it all worked.
The presidential signature appeared on the screen. The president grinned.
"Well it worked," he told his audience which included about 100 business and computer science students from Philadelphia Community College, the University of Pennsylvania and Eastern College.
"And it will work for you," he said. "And all of you young people will someday look back on this day ... and marvel that it was considered a big deal."
The measure takes effect Oct. 1. As of March 1, 2001, companies can begin the electronic retention of legal records such as mortgages and financial securities.
The new law provides that no contract, signature or record shall be denied legally binding status just because it is in electronic form. The contract must still be in a form capable of bring retained and accurately reproduced.
The White House said that all existing consumer protection laws including those prohibiting fraud and deception will continue to apply -- (Various Sources)
© 2000 Al Bawaba (www.albawaba.com)