U.S. congress backs e-signature law

The U.S. House of Representatives has said that business contracts transmitted over the Internet with digital signatures are as legally binding as printed contracts with hand-written signatures. The legislation, if signed into law by President Clinton, will give equal weight to digitally signed contracts.

Chairman of the house commerce committee republican Tom Bliley from Virginia initially proposed the bill. The strong support for the bill vote came after three weeks of bitter partisan debate, with republicans and democrats taking opposite sides over the issue of consumer protection. Democrats with support of major consumer interest groups, charged that the law would hurt consumers by overriding state and federal laws that require notices associated with contracts be provided on paper.

In a compromise, both parties agreed on language stipulating that companies and individuals will continue to be required to send paper notices about any issues dealing with consumer's "health or safety" products and services. Consumers must also agree to receive their records electronically, forcing companies to give consumers a choice to demand a written contract.

"The bill provides online consumers with the comfort and assurance that their online transactions will be secure and that they will continue to receive the same consumer protections as consumers purchasing a product at the local shopping mall,'' said Mr. Bliley. But despite the compromise and strong support in the Congress, President Clinton remains opposed to measure which he believes goes far in eroding basic consumer protection and in superceding existing federal and state laws. But a veto override is possible with the demonstrated support for the bill.