But I have to disagree with “The Lesson”… that it is “easier and safer to have legal documents signed on physical paper”. Done correctly, electronic agreements and signatures are not only safer and easier than those done on paper but they also cost less.

This case is not an example of why you should use paper, but rather an example of what can go wrong when you rely on email or a system built without electronic signature expertise.

Great story!

This entire dispute described could have been avoided by using RPost’s Registered Email service (www.rpost.com) which gives legal proof of delivery, content, and the time an email was sent and received. If they would have used this service and sent it to a personal email address that could be mandated to be kept current by the employer, it would have been near impossible for the employee to claim internal forgery. The service has the simplest e-Contracting tool on the market, and it is much more cost effective than relying on outdated methods (paper).

However, it sounds like someone may have “signed” this agreement for her. Looks like they picked a bad example to forge.

We will see more and more of these sorts of cases where companies put either home-grown or low-end ESIGN systems in place, and they fail to produce a legally binding contract for one reason or another. As the court pointed out – all it takes is the possibility of failure in process to render the system useless. In this case, a home-grown so-called ESIGN system was used, and one of its weaknesses was user access. If at ANY TIME someone else can gain unathorized access and use my signature, then the whole system is compromised.

I disagree that using paper solves this problem. A signature on paper can easily be refuted, and they often are. No, the problem is that the company here did not use an ESIGN system designed to create legally enforceable contracts. The fact her manager could reset her password is a clear system design failure. But any internally run and managed system designed to produce legally binding documents that may in fact be used in a suit against the company using it is suspect – it is sort of like the “fox guarding the henhouse”. That is why companies increasingly are turning to systems like DocuSign, where users are authenticated, contracts are secured and tamper proof, and the chain of evidence is overwhelming. Better, it is not internal system. DocuSign is a trusted 3rd party that manages the contracts as a service.(www.docusign.com)

If this company had used DocuSign, her manager never would have been able to access her account and act on her behalf. Further, if the company used any of the authentication tools provided such as knowlege based authentication, even if her manager DID somehow steal that password, he still would not be able to assume her identity and sign.

The lesson to take away from this is that if you care about your contracts, put a commercial-grade ESIGN system in place that has the authentication tools you need, and runs outside your firewall as a trusted 3rd party. Turning back to a paper process is less effective, costs more, and can actually be harder to prove.