September 14, 2000

Electronic Signatures Bill to Go Into Effect October 1, 2000 Will Have Far-Reaching Effects on All Areas of the E-Commerce Industry

In June of this year, Congress passed the Electronic Signatures in Global and National Commerce Acts (S. 761) (the “E-Sign Act”). This law will have profound and far-reaching effects on the entire e-commerce industry, including banks, insurance companies, broker dealers, investment companies, mortgage companies, credit card companies, retailers, Internet service providers, and technology companies. The Internet is increasingly becoming part of daily life. With 44.4 million Americans online, the numbers are multiplying at an unprecedented rate. As a result of this trend, a new breed of investors has emerged. It is estimated that by the year 2003, 40 percent of all U.S. households will own stock in some form using an online trading account. The E-Sign Act has the ability to cut through the red tape that is involved with certain types of brokerage account transactions as well as acquiring mortgages, bank loans, insurance policies and virtually all other types of interstate commercial transactions.

The most important aspects of the E-Sign Act are:

-- Giving recognition and effect to electronic signatures, contracts, and records uniformly throughout the United States.

-- Authorizing so-called “digital signatures” as well as empowering the broad use of on-line contracting and provision of notices, thereby facilitating billions of dollars in business-to business and business-to-consumer commerce, as written signatures and paper notices will no longer be required.

Alston & Bird has built one of the largest Internet and E-Business practices in the nation and the largest in the southeast. The Firm's Internet and E-Business practice includes over 180 attorneys engaged in legislative and regulatory aspects of E-Business, domestic and international licensing and distribution of information software and content, systems integration and outsourcing, new media, privacy, telecommunications, electronic commerce, digital signatures, encryption, intellectual property protection and litigation, capital formation at all stages of growth, IPOs, mergers and acquisitions and joint ventures – all as they apply particularly to technology, electronic commerce and traditional businesses.

Since the E-Sign Bill’s inception, Tom Boyd and Tom Crocker of Alston & Bird LLP have been instrumental in participating in the development of this landmark legislation, and are both thoroughly knowledgeable on its provisions.
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