Although it is still a ways from being standard procedure, the use of electronic signatures in real estate transactions has become increasingly common. There is a lot to like. Signatures can be obtained quickly. Not needing to go through multiple faxing, document copies are clear and legible. Document storage and retrieval is a snap. And the reduction in paper usage is good for the planet!

Not only that, but electronic signatures are legal, and in most contexts have the full effect of wet signatures. Almost every state has adopted the 1999 provisions of UETA (the Uniform Electronic Transactions Act), and there is also the federal E-Sign (the Electronic Signatures in Global and National Commerce Act). The most relevant provisions are to be found in section 7 of UETA:

    * A record or signature may not be denied legal effect or enforceability solely because it is in electronic form.

    * A contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation.

    * If a law requires a record to be in writing, an electronic record satisfies the law.

    * If a law requires a signature, an electronic signature satisfies the law.

As always, some exceptions apply. They vary from state to state. In California, for example, electronic signatures can't be used for many landlord-tenant documents, for seller-financing disclosures, or for purchase agreements when the seller is in default. Moreover, there are individuals and institutions who will not accept electronic signatures. Good luck trying to invoke the provisions of UETA or E-sign when your lender says they won't accept a purchase contract with electronic signatures.

Yes, it is true that there are ways around the security features built in by the various providers of electronic signature software. One spouse could give the other his/her codes and passwords. Etc. A moderately clever agent could figure out how to rig the system and create documents purportedly electronically signed by the principals. So? It isn't foolproof. But there's a lot more security around electronic signature protocols than there ever was – or will be – to prevent forgeries of wet signatures.

There are other concerns as well. Some of these were expressed at a recent gathering of real estate attorneys, held in conjunction with the meetings of Directors of the California Association of Realtors® (CAR). Two items in particular were the subject of attention.

One had to do with the authorization of principals for using electronic signatures in the transaction. The governing laws do not provide a particular protocol for this. Parties must provide consent, but no method for doing so is specified. Under both UETA and E-Sign, consent may be obtained in writing, orally or determined from the surrounding circumstances, including the parties' conduct.

To be sure, the providers of electronic signature software may include a procedure for obtaining consent. And we are all familiar with these – the click through method. Probably everyone who reads this has given electronic consent in a similar manner. You know; when you click I agree to a terms-of-use statement that may be 2500 words or more. How many people have read any of those all the way through?

Secondly, and curiously, attorneys worried that the practice of obtaining electronic signatures on electronically-transmitted documents results in even further diminishment of face time between agents and their clients. This was not just a bit of nostalgia, though there was some of that. It was mostly about the lack of explanation. At the CAR meetings, attorneys spoke of files that contain copies of emails that implicitly say something like this: Here is the eight-page, single-spaced purchase contract. Please follow the instructions for affixing your electronic signatures and initials. If you have any questions, don't hesitate to ask.

It can be bad enough, to be sure, when agents are face-to-face with principals and those principals feel pressure to hurry up and sign documents. But the electronic mode of communication may make it even easier, some of the attorneys feared, to make plausible the defense that, I didn't understand, and they didn't explain, all those things they told me to sign.

It's nothing new that agents sometimes do not go over with their clients the complex documents that require signatures. But the at-a-distance electronic mode of communication exacerbates the problem. It is something to be concerned about.