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Should You Use Electronic Signatures?

August 21, 2019

By: David E. Peterson

Electronic signatures have been acceptable for years in the business world. Software such as DocuSign and Adobe Sign offer an audit trail that can be used to show the circumstances surrounding the execution of the documents and to authenticate the signatures.

Parties to a contract often need to have the documents admitted in court, but it is not always easy. A witness must identify and testify that the parties did in fact execute the contract. That is okay if the parties were together in a room and watched each other sign, but if the only evidence is that the witness received an email, it may be more difficult. DocuSign and Adobe Sign keep a record of when the contract was emailed to the parties, when they signed the contract with their electronic signatures, and when the signed contract was returned to the sender. They also offer security features intended to confirm the identity of the signer.

Some courts have accepted the procedures required by e-signature software to confirm signatures, but the software can also be a hindrance if the parties have not been diligent in following the procedures. For example, the software inserts a code on each page of the document to ensure that the signed document is the same document provided to the party for signature and was not changed. In business, however, it is not unusual for parties to sign signature pages in advance of closing and attach them to a completed final version of the agreement at closing. In the final document, the code may appear only on the signature page, which might make it difficult to authenticate the document in court.

The expanding use of e-signature software will no doubt give rise to disputes to be resolved in court. Parties who use such software should recognize that the software is demanding in its procedures. If the parties are not able to comply with those procedures, then it might be better to use a more traditional, non-electronic method of executing and delivering the documents.


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David

Dave Peterson has a broad background in bankruptcy and creditors’ rights, as well as commercial litigation, in general.


Dave represents lenders, creditors and lessors in sophisticated Chapter 11 reorganizations and Chapter 7 liquidations. He has represented creditors in negotiating Chapter 11 bankruptcy plans, as well as litigation concerning confirmation of bankruptcy plans. He has handled preference litigation, fraudulent conveyance claims, exemption litigation, and a wide range of other kinds of litigation arising out of bankruptcies, including appeals.

Further, Dave has experience accumulated over a period of approximately 26 years, handling real estate mortgage foreclosures, including foreclosures of hotels, apartment complexes, office buildings, retail property, and other types of commercial property, and in handling litigation arising out of the enforcement of security interests in personal property under the UCC.

He also has significant experience representing receivers in receivership cases, handling and litigating assignments for the benefit of creditors, and in defending lender liability claims. In addition, Dave has spent a number of years working on transactional matters related to his expertise in the area of finance. For example, Dave has experience handling the workout of problem loans and debt restructuring.

Dave has also spent approximately 8 years structuring, negotiating, documenting, and closing sophisticated financial transactions, such as mortgage warehouse facilities, repurchase agreement transactions, real estate loans involving special purpose entities, and revolving credit facilities secured by all kinds of personal property, as well as uniform commercial code transactions of all kinds. Many of these transactions have involved hundreds of millions of dollars.

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