Bankruptcy & The Electronic Signature

While infrequent, cases involving proof of one’s electronic signature are not unheard of. Just last year in Perry v. Ad Astra Recovery Services, Inc., the U.S. District Court for the Eastern District of Missouri confronted the issue, finding that the plaintiff, in clicking through a number of screens and entering her initials nearing the end of a PayDay Loan Agreement, electronically consented to the arbitration clause included therein. Unsurprisingly, this issue, too, touches the realm of bankruptcy law. Essentially, having someone sign a document electronically is perfectly fine until a court demands proof of the signature. As one might imagine, evidencing your client’s signature in such a case might prove challenging. Normally the proof of assent in contractual matters, here the most fundamental proof, itself requires proof. That said, in the midst of this quandary, what factors may establish signature authenticity? This issue was illustrated in 2005 by the United States Bankruptcy Appellate Panel of the Ninth Circuit with In re Vinhee. Addressing the problems presented in substantiating an electronic signature with the court, this case laid out the four basic elements necessary to prove an electronic business record. Such records must be: (1) made at or near the time by, or from information transmitted by, a person with knowledge; (2) made pursuant to the regular practice of the business activity; (3) kept in the course of regularly conducted business activity; and (4) the source, method, or circumstances of preparation must not indicate lack of trustworthiness. What is more, the court must be persuaded by the proponents of such records as authentic and accurately representing the original agreement. Statutorily validating...