THE WHITE HOUSE
Office of the Press Secretary
| For Immediate Release
|| June 30, 2000
ELIMINATING BARRIERS TO ELECTRONIC COMMERCE
WHILE PROTECTING CONSUMERS:
THE ELECTRONIC SIGNATURES IN GLOBAL AND
NATIONAL COMMERCE ACT
June 30, 2000
President Clinton today will sign S. 761, the "Electronic Signatures
in Global and National Commerce Act." After the signing the bill in the
traditional manner, the President will make brief public remarks and
demonstrate the kind of new electronic signature technology that Americans will
be able to use to sign legally binding contracts on-line. The Act will:
- Eliminate legal barriers to using electronic technology to form and
sign contracts, collect and store documents, and send and receive notices and
- Require that consumers affirmatively consent to doing business
on-line and benefit on-line from consumer protections equivalent to those in
the paper world; and
- Ensure that government agencies have authority to enforce the
laws, protect the public interest, and carry out their missions in the
ELIMINATING LEGAL BARRIERS TO ELECTRONIC COMMERCE
Today, companies may be deterred from doing business on-line because
of uncertainty about whether their on-line contracts will be legally
enforceable. Laws on the books sometimes require that contracts documents be
written on paper and signed with pen-and-ink signatures. Too often, firms have
to memorialize their transactions on paper and send hard copies back and forth
for signature, slowing down the pace of business. But the new law will overcome
these barriers by:
- Preempting Paper Requirements: The Act provides that no
contract, signature, or record shall be denied legal effect solely because it
is in electronic form.
- Establishing Technology Neutrality: The Act precludes, in
most cases, requirements that one type of technology be used instead of
- Ensuring Accuracy of Electronic Records: The Act provides
that most electronic contracts and records are only legally enforceable if they
are in a form that is capable of being retained and accurately reproduced for
later reference by relevant parties.
PROVIDING CONSUMER CHOICE AND EQUIVALENT CONSUMER PROTECTION
If we are to achieve the full potential of electronic commerce,
American consumers need to have confidence that they have the same protections
on-line that they have in the paper world.
- Preserves Consumer Protections: The Act makes clear it does
not effect existing requirements, other than those requiring paper. Thus,
existing consumer protection laws, including those establishing the content and
timing of notices and disclosures and prohibiting fraud and deception, will
continue to apply.
- Requires Consumer Choice: The Act makes clear that it does
not require any consumer or other person to agree to use or accept electronic
records, signatures, or contracts.
- Protects Consumers from Confusion or Deception: The Act
requires that consumers affirmatively consent to use of electronic notices,
records, and contracts. Prior to consenting, the consumers must be given notice
of their rights and the firm must verify that the consumer will be able to
access electronically the information they will be provided. Too many Americans
have received emails with attachments that cannot be opened. This provision
will protect consumers from predators who might confuse or coerce them into
agreeing to receive electronic notices they have no capacity to access or
PROTECTING TAXPAYERS AND ENFORCING THE LAWS
Today, government requirements mandate that companies sometimes keep
or generate voluminous paper records, documenting their transactions. Record
retention requirements serve an important public purpose - allowing agencies to
monitor for program compliance, protect taxpayers from waste, fraud, and abuse,
and enforce the law. In many cases, these same goals can be met using digital
- Electronic Record Retention: The Act requires that agencies
allow most records to be retained electronically, but government may establish
appropriate performance standards for the accuracy, integrity, and
accessibility of records retained electronically, to ensure that compliance
with laws can be determined, taxpayers can be protected, and agency mission can
- Electronic Filing: The Act also allows government to
establish standards and formats for government filings.
THE BENEFITS OF E-COMMERCE FOR AMERICAN BUSINESS, AMERICAN
CONSUMERS, AND THE AMERICAN ECONOMY
Our Nation has benefited dramatically from the onset of the digital
- The Commerce Department reports that information technology
industries (IT) have contributed 30 percent of U.S. economic growth since 1995.
- Economists have consistently found that IT accounts for half or
more of the recent acceleration in U.S. productivity growth: from 1.4 percent
per year from 1973 through 1995 to 2.8 percent per year since 1995.
- IT accounts for two thirds of the growth in overall business
investment in recent years.
- The potential benefits of the IT revolution reach beyond the IT
industry itself to improve the productivity of all segments of our
But still there are barriers - especially legal uncertainty - to the
use of technology for business-to-business and business-to-consumer commerce.
This legislation will help us to achieve the full benefits of electronic
- Companies will be able to contract online to buy and sell products
worth millions of dollars.
- Businesses will able to collect and store transaction records that
once filled up vast warehouses on servers the size of a laptop.
- Consumers will have the option of buying insurance, getting a
mortgage, or opening a brokerage account on-line, without waiting days for the
paperwork to be mailed back and forth.
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