Are we ready for Digital Signatures and fully electronic contracts?

signed-arx-document1It may surprise many, but the US and the EU have had legislation in place since the late 1990’s to promote the use of Digital Signature technology as a means of providing legally admissible electronic contracts.

So, why has electronic contracting not become the standard in the electronic world?  Its simple really; it is all down to trust.  In the United Kingdom (and in other jurisdictions) laws can say what ever they like, but it is not until they are tested in a Court of Law that a precedent can be set for others to follow.  Its just that in the UK (and in other countries), there have not been any relevant test cases to create that precedent … and therefore legal advisors are reluctant to promote contracts that are anything other than in the format that is tried and tested, and does have case history:  the signed/counter-signed paper contract.

Digital Signatures have however been widely adopted in certain business environments.  Take the Pharmaceutical and Life Sciences industry, for example.  Compliance to the stringent US Food and Drug Administration (FDA CFR21 part 11) standard encourages electronic documents and submissions to be encrypted and authenticated with digital signatures.  Digital Signature vendors like Algorithmic Research (Arx) have been particularly successful in this area with their product, CoSign.

Dolphin Software expects the next five years to bring a fundamental change in the way that organisations manage their contracting processes.  We expect that greater pressure from regulators in some sectors and closer scrutiny from financial auditors in others, will compel organisations in both the public and private sector to adopt technology solutions to help them manage and control the contract lifecycle process.  Once contract best-practice processes and procedures have been formalised, we believe that is is only a matter of time; and a logical next step, for contracts to be executed or signed electronically, thereby eliminating the need for the paper contract and the delays and costs associated with drafting, negotiating and archiving paper contracts.

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