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 disclosures;
• 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 electronic world.

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 another.
• 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 retain.

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 technologies through:

• 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 be accomplished.
• 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 age.

• 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 economy.

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 commerce.

• 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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