So long e-signatures, it was nice to know you.

DocuSign screenshot

We recently bought a house or, more accurately, a bank bought a house which we own a teeny-tiny part of. That, of course, resulted in an unending series of requests by mortgage companies, banks, title companies, realtors, sellers, etc. for signatures on long and seemingly duplicative documents. In most of those cases, our signatures were obtained via DocuSign. That’s become pretty standard practice in the real estate industry these days, and also in other industries which require large numbers of signed documents. While it’s annoying, I suppose it beats having an equally large pile of signed originals in a file somewhere.

Or maybe it doesn’t. According to a recent memorandum in a California court, however, a “signed” DocuSign document might not be enough. The judge in that case sanctioned an attorney for relying on DocuSign signatures in the context of bankruptcy law, pointing specifically at a requirement that electronic signatures are only valid if a copy of the “original” signed document was retained. DocuSign, of course, has based its entire platform on the idea that the digitally signed document is the original, which may now be in serious doubt.

For now, the memorandum serves as a reminder that users of digital or e-signatures have to be certain that the laws pertaining to that particular transaction allow e-signatures without a “wet signature” to fall back on in the event of a dispute. Bankruptcy lawyers in particular, take note. That being said, the logic behind the memo calls into question the entire premise behind electronic and digital signatures and, if followed, may end up being a really good development for paper companies. After all, if I sign by putting my name following /s/ in an e-mail, or using the signature function in Apple’s Preview application, the potential authentication issues raised in the memo are exactly the same as raised in this case.

I’ll keep that in mind if we have second thoughts about this whole home-ownership thing.

Hat tip to Whitney Merrill (via Twitter, @wbm312)