Exceptions to the Rule in Electronic Signature Law
As businesses continue to digitize their operations, understanding the legal landscape surrounding electronic records and signatures is essential. In both the U.S. and Canada, federal model laws provide the foundation for recognizing electronic documents as legally valid. However, the specifics can vary widely depending on your location and industry. To stay compliant and avoid costly missteps, it’s important to understand the key regulations, how to identify exceptions, and know where to look for jurisdictional and industry-specific requirements.
The legality of electronic records and signatures in the U.S. and Canada is based on four federal model laws. In the U.S. we have:
Canada mirrors the U.S. with:
These laws serve as foundational frameworks, enabling electronic records and signatures to be recognized and enforced under law.
Most countries have adopted comparable legislation, often modeled closely after the U.S. and Canadian examples. In both nations, individual states, provinces, and territories may comply with these federal models by:
All four laws are technologically neutral, meaning that they do not mandate specific tools or platforms for creating or managing electronic records. This neutrality is intentional, allowing the legal framework to remain relevant as technology evolves.
Each of these federal acts outline specific exceptions where electronic records and signatures are not permitted. Common exceptions include:
Importantly, states, provinces, and territories can (and often do) add their own exceptions. California, for example, goes beyond the federal statute by adding numerous additional exceptions. The state has its own electronic signature law that outlines the technical standards digital signatures must meet to be considered valid. The state also imposes unique requirements for court filings and documents signed under penalty of perjury.
Depending on your specific industry, the number of additional exceptions can range from very few to quite extensive. As a rule, the more heavily regulated the industry, the more likely it is that extra exceptions have been introduced.
One such sector is transportation, where safety, compliance, and environmental concerns require strict documentation standards. Under the ESIGN Act, there is a clear exception that applies to the transportation and handling of hazardous materials, directly impacting key documents such as shipping papers, placards, and labels used during the movement of dangerous goods. This example underscores the importance of finding all the exceptions within your industry’s acts and regulations.
While exceptions exist, the default assumption should be that electronic records and signatures are permissible in most cases. To identify any applicable exceptions, the first step is to review your state, provincial, or territorial laws governing electronic records and signatures, along with any industry-specific acts and regulations. These resources will clarify whether your jurisdiction has adopted the federal model in full, modified it, or replaced it with its own legal framework.
However, relying solely on these primary laws isn’t always enough. In many cases, additional restrictions are embedded within broader sector-specific legislation, rather than in the core electronic signature statutes. This means that a deeper level of legal research is often necessary to uncover all applicable rules and ensure full compliance. So, always keep your legal research hats on and be ready to do some detective work!
For a deeper dive into the key regulations surrounding electronic signatures and records, download a copy of “The Records Manager’s Guide to Electronic Signatures & Compliance in the U.S. & Canada.”
If your information governance team doesn’t have the bandwidth to do the legal research internally, then consider implementing a tool that does it for you. Virgo is a cloud-based records retention software that informs your privacy and retention policies by providing continuously updated legal research in 220+ jurisdictions around the world. Contact us to see how it can help your team save over three hours per day on legal research work.
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