eSignature and ePayment News and Trends

Achieving Digital Transformation and Securing Digital Assets


eSignature and ePayment News and Trends

eSignature and ePayment News and Trends


A fact of business today is that customers – both consumers and other businesses – and employees expect to transact digitally.  To remain competitive, companies find themselves increasing their efforts to digitally transform their businesses.

Successfully implementing this transformation requires careful planning to ensure regulatory compliance, a smooth integration with existing business technology and a positive customer experience.

This is our tenth bulletin for 2019, again aiming to help companies identify important and significant news and legal developments impacting digital offerings. Each issue will feature in-depth insight on a timely and important current topic.

In this issue, we provide an analysis of the recent Supreme Court denial of certiorari in ADA case and potential future impacts.  In addition, we will cover recently enacted federal and state laws, federal and state regulatory activities, fresh judicial precedent and other important news.

For related information regarding blockchain and digital assets, please see our monthly bulletin Blockchain and Digital Assets News and Trends.


Testing and protecting key data processing systems

By Margo H.K. Tank, R. David Whitaker, Andrew W. Grant and Liz Caires

Data processing systems are at the heart of most esignature and epayment products and services.  Today, these systems are used to perform many key functions for businesses – frequently on an automated basis, with little human oversight or intervention.  But a business relying on a system that may contain a programming or processing error may, over time, accumulate and act upon a significant number of erroneous transactions or process decisions, while believing all the while that the transactions and decisions are valid. Learn more.



  • CFPB announces taskforce on federal consumer financial law. On October 11, 2019, the CFPB announced that it will establish a taskforce to examine ways to harmonize and modernize federal consumer financial laws.  The task force will focus “on harmonizing, modernizing, and updating the enumerated consumer credit laws − and their implementing regulations − and identifying gaps in knowledge that should be addressed through research, ways to improve consumer understanding of markets and products, and potential conflicts or inconsistencies in existing regulations and guidance.” 



  • US House passes bill requiring FinCEN to study blockchain.On September 19, the House of Representatives passed H.R. 2613, the Advancing Innovation to Assist Law Enforcement Act, mandating FinCEN to conduct a study of the implementation and use of AI, blockchain and other innovative technologies, and to consider how such technologies can improve bureau operations.  The bill requires FinCEN to report its findings and determinations to the House Financial Services Committee and the Senate Banking Committee.  The bill was forwarded to the Senate for consideration.


Electronic Signatures

  • California allows consumers to send electronic authorization to motor vehicle dealer regarding repairs of a manufacturer recall.  On October 3, 2019, the governor of California approved a bill (AB596) that permits a new motor vehicle dealer to receive electronic authorization from consumers consistent with regulations of the Bureau of Automotive Repair for any repair of a manufacturer recall --  despite the provisions in California’s UETA that exempt from coverage transactions involving a motor vehicle manufacturer’s responsibility to furnish notification to the registered owner of any defect in the motor vehicle or its safety equipment, and the manufacturer’s duty to correct that defect without charge.

Remote Online Notarization

  • Nevada proposes further revised draft RON regulations.  On October 17, Nevada proposed further revised draft regulations to support the state's enactment of RON, supplementing and amending the prior draft released on September 3.  These revised regulations are more detailed than the temporary regulations Nevada has been operating under since December 2018.  Notably, these revised regulations continue to require a Nevada electronic notary to provide a sample of his or her electronic signature "that is an exact representation of the handwritten signature of the person on file with the Secretary of State."
  • Tennessee adopts RON regulations.  On October 18, Tennessee adopted final regulations to replace emergency RON regulations which expired on October 12.  These final regulations are substantively identical to the emergency regulations they replace; however, Tennessee removed the requirement for the notary to establish and use a “unique” electronic signature, seal and notarial certificate.  The final regulations become effective January 7, 2020.





  • Text messaging system that lacks capacity to create numbers using a random or sequential number generator is not an ATDS:  In Smith v. Premier Dermatology, 2019 WL 4261245 (N.D. Ill Sep. 2019), the court held that the defendant’s system for sending text messages was not an automatic telephone dialing system because it lacked the capacity to randomly and sequentially generate numbers and then dial them.  After ACA International, courts have contended with whether the DC Circuit court’s decision invalidated all prior FCC guidance on what constitutes an ATDS.  Here, the court agreed with the Ninth Circuit, in Marks v. Crunch San Diego (covered here) that all prior FCC interpretations of an ATDS were invalid. In so doing, the court disagreed with Marks, which held that a system that stores numbers and later dials such numbers is an ATDS, instead holding that to be an ATDS, the system must be capable of creating numbers using a random or sequential number generator.  Because the defendant’s system did not have that capacity, it was not an ATDS.

Online Contract Formation

  • Court refuses to uphold arbitration agreement because evidence suggested employer, not employee, clicked the box.  In Roberts-Banks v. Family Dollar of Tennessee, Inc., 2019 WL 5075832 (E.D. Tenn., Oct. 9, 2019), the court denied the defendant’s motion to compel arbitration because there was a genuine issue of material fact related to whether the plaintiff signed the arbitration agreement or whether the plaintiff’s supervisor did so.  The plaintiff stated in an affidavit that when a new employee started, in order to get to a specific training module the supervisor would begin the training under the employee’s name, including by clicking the box agreeing to the arbitration agreement.  The plaintiff stated that this was why she herself had not signed the arbitration agreement, even though she does not dispute that the defendant’s records show she did.  While the defendant attempted to refute the plaintiff’s argument, the court stated that a sufficient issue of material fact existed, and it denied the defendant’s motion to compel arbitration.
  • Sign-in wrap sufficient to compel arbitration:  In Phillips v. Neutron Holdings, Inc., 2019 WL 4861435 (N.D. Tex. Oct. 2, 2019), the court granted the defendant’s motion to compel arbitration because the defendant’s “sign-in wrap” provided the plaintiff with reasonable notice of the existence of the arbitration agreement.  A sign-in wrap is a hybrid of clickwrap and browsewrap agreements − a user must take an affirmative action (eg, click “next”) that signifies agreement to the terms that are presented via hyperlink.  For agreements entered into via a smartphone, the court stated that it would “consider the perspective of a reasonably prudent smartphone user.”  Here, the court found that the hyperlink on the defendant’s signup screen was reasonably conspicuous and placed the plaintiff on notice of the agreement:  specifically, the signup screen is visible on one page and the hyperlink is in close proximity to the signup buttons.  A notice above the “Next” button stated that by signing up for the defendant’s service, the plaintiff was confirming that he had read and agreed to the defendant’s user agreement and terms of service.  The court observed that the notice was legible and that the agreement titles were hyperlinks to the documents, and were dark, bold, identified the name of the agreement, and stood out against the white background.  Therefore, when the plaintiff clicked “Next,” he was assenting to the terms.
  • Browsewrap results in enforceable agreement: In Mucciariello v. Viator, Inc., 2019 WL 4727896 (D. N.J. Sep. 27, 2019) the court granted the motion to transfer venue because the plaintiff had reasonable notice of the terms when she clicked the “Book Now” icon.  The court, calling the defendant’s website a “browsewrap,” stated that to be enforceable, the terms must be reasonably conspicuous on the webpage, which is determined by the design and layout of the website.  Here, to purchase a travel and tour service, the plaintiff was required to click a “Book Now” icon, underneath of which was language stating that “[b]y clicking Book Now and making a reservation, I acknowledge that I have read and agree to be bound by Viator’s Terms and Conditions and Privacy Statement.”  The court found that because the language was directly beneath the Book Now icon (and not hidden in an area of the screen that the customer was unlikely to notice) and the terms and conditions were highlighted in blue to contrast with the surrounding black text, the plaintiff had reasonable notice of their existence.  The court found so even though the plaintiff put forward a screenshot showing that it was possible to click “Book Now” without seeing the disclosure or the terms.  To that, the court replied: “That a user would purposefully stop the web browser, at the precise point at which the ‘Book Now’ icon ends, defies logic.”
  • Electronic signature sufficiently attributed to signer:
    • In Farmer v. Macy’s, Inc.,2019 WL 5079763 (D. Md.,Oct. 9, 2019), the court upheld the arbitration agreement because it concluded that under the UETAs of Maryland and Virginia, the electronic signature acknowledging receipt of an arbitration agreement could be sufficiently attributed to the plaintiff.  The plaintiff argued that the arbitration agreement in effect when she was hired did not require her to send her arbitration opt-out notice to a particular location, meaning that when she signed it and returned it during the in-person application process, she was opted out of arbitration. The defendant countered by providing the document in effect when the plaintiff was hired, which showed that the plaintiff would have needed to mail in the opt-out.  Further, the defendant provided evidence that the plaintiff electronically signed the acknowledgement form indicating that the she had received the arbitration agreement that required mailing in the opt-out.  She also claimed that the defendant had created a phony electronic signature page.  However, to successfully sign, it was necessary to enter a social security number, month and date of birth, and zip code; if the information did not match that of the employee, the electronic signature would not be effective.  In finding that the plaintiff electronically signed the acknowledgement form, the court noted that other courts in states that have adopted UETA have found such requirements sufficient to attribute the signature to the person contesting its validity.
    • In GC Services Limited Partnership v. Little, 2019 WL 5425032 (S.D. Texas, Oct. 23, 2019), the court found that the defendant signed a dispute resolution agreement during her online application process. In so doing, the court dismissed the defendant’s version of events, finding that the timeline she presented conflicted with timestamped documents and with credible evidence showing the company’s usual application procedures.  To complete an application, the defendant needed to create an account, with a unique login and password, in the third-party application system used by the plaintiff.  The records show that the defendant completed the application, including providing detailed knowledge of her prior work history and her social security number.Her electronic signature was essential to complete this process, and she signed the dispute resolution agreement by clicking a checkbox.  Once this process was completed, an email was sent to her email address (which she confirmed was her only email address).  Once the plaintiff was hired, she was required to complete various onboarding documents, which she disputed doing, stating that she would not have completed them at home; she provided her web history from the relevant dates showing that she did not view the plaintiff’s website, but the court noted that the defendant provided no evidence that she was signed into the relevant web service – a prerequisite to capturing her browsing activity – and that she could have deleted any such history.  Further, the plaintiff could not explain gaps in her browsing history or why she visited the plaintiff’s website the same day that she received the link to the application.  In citing the Texas UETA regarding attribution, the court found that the defendant signed the dispute resolution agreement as part of the application process and was thus required to go to arbitration.


Online contract formation

  • Exchange of text messages not sufficient to form a contract: In Gatlin v. Scott, 2019 WL 4567497 (Tenn. Ct. App., Sep. 20, 2019), the court upheld a trial court’s decision that an exchange of text messages between a property seller and potential buyer did not create an enforceable contract because the text messages, “considered alone, did not evidence a present offer and acceptance sufficiently definite to be enforced.”  The plaintiff’s argued that the text messages were sufficient to create an enforceable contract under Tennessee’s UETA, but the court disagreed.  The court noted that the text messages utilized the future tense −“I will…” and “Please let me know if you want to move forward and I'll get a contract to you” − regarding a potential real estate contract that could be prepared and executed by the parties at a later date.
  • Combination of checkbox and electronic signature sufficient to compel arbitration:  In Edmundson v. City of Bridgeport Board of Education, 2019 WL 5066951 (Ct. Sup. Ct., Sep. 18, 2019), the court granted the defendant’s motion to compel arbitration because the plaintiff was on sufficient notice of the terms of the arbitration and unambiguously manifested his assent.  The defendant’s online contracting system contained a separate page for the arbitration agreement, which was available via hyperlink and required that the plaintiff click a checkbox to proceed to the next screen.  Further, on the final page, the plaintiff had to electronically sign his name next to each document, including the arbitration agreement, and could also access the document via a hyperlink from that page.  The plaintiff admitted to completing the process, but stated that he did not read the agreement. In reviewing the electronic interface the plaintiff used, the court concluded the following: (i) that the screen design and the language and notice provisions used throughout the application process, and specifically for the arbitration agreement, were reasonable; (ii) the screen acknowledging that the applicant read and understood the arbitration agreement was clear and uncluttered and the text and hyperlink appeared directly below, without the need for the plaintiff to scroll beyond what was immediately visible; and (iii) the plaintiff unambiguously assented to the terms of the application, including the agreement.  The court concluded by stating that when a person signs or accepts a formal written contract that affects his pecuniary interest, that person has a duty to read the contract; if the person fails to do so, the contents will still be imputed to that person.


  • Website with nexus to physical location covered by ADA; business required to comply with WCAG 2.0 as part of injunction and cannot just provide telephone number and email:  In Thurston v. Midvale Corporation, 39 Cal.App.5th 634 (Ca. Ct. App, 2nd App. Dist. September 2019), the court affirmed the trial court’s ruling that (1) the defendant’s website was a place of public accommodation under the Americans with Disabilities Act (ADA); (2) the plaintiff’s reference to nongovernment guidelines (the WCAG 2.0 compliance standard, as opposed to federal regulations) did not violate the defendant’s due process rights and the guidelines were not overbroad, uncertain, or unconstitutional; and (3) whether providing a telephone number and email (in lieu of the website being accessible via a screen reader) satisfied the “effective communications” mandate under the ADA was not triable issue of fact. The plaintiff alleged that the defendant’s website for a restaurant was not accessible via her screen-reading software.  She alleged that this violated California’s Unruh Act, which itself provides that a violation of the ADA constitutes a violation of Unruh.  First, the court found that the restaurant website was a place of public accommodation under the ADA.  Quoting the Ninth Circuit in Robles v. Domino’s Pizza, LLC, 913 F.3d 898 (9th Cir. 2019) (covered here), the court held that Title III of the ADA applies to the “services of a place of public accommodation, not services in a place of public accommodation.”  While in this case the website was connected to a physical location, the court declined to decide whether websites not connected to a physical location were subject to the ADA.  Regarding the use of a telephone number and email address, the court agreed with the trial court’s finding that such methods “do not provide effective communication ‘in a timely manner’ nor do they protect the independence of the visually impaired.”  Finally, the court stated that the injunction requiring compliance with WCAG 2.0 was permissible because, in effect, the defendant was arguing that the doctrine of primary jurisdiction should apply and that the case should be dismissed or stayed until the DOJ issued technical regulations.  The court stated that the DOJ’s 2017 withdrawal of its advanced notice of proposed rulemaking meant that applying the doctrine of primary jurisdiction would needlessly delay resolution of the claims.


M. Tank and D. WhitakerLaw of Electronic Signatures, 2019 Edition

M. Tank, D. Whitaker, and A. Grant, "Remote Online Notarization is Here to Stay," ABA Banking Law Committee Journal – Summer 2019

M. Tank and D. Whitaker, "So you want to go digital…", Intellectual Property and Technology News (North America), Issue 41, Q1 2019

M. Tank and D Whitaker, "Trends in electronic signatures: strategies for addressing risk using biometric data," a white paper for Wacom

M. Tank and D. Whitaker, "The Effectiveness of Clickwrap for Legally Enforceable Agreements," a white paper for DocuSign


eSignRecords2019, November 11-13, 2019, Orlando, Florida. The agenda of the Electronic Signatures and Records Association Annual Conference includes discussions on remote signings in vehicle sales technology, eclosings, and other topics related to the use of electronic signatures and records. M. Tank and D. Whitaker will present on “eSignature Legal and Regulatory 2019 Year in Review and Trends to Watch for 2020.”


M. Tank and H. Marcus of DocuSign, Association of Corporate Counsel Webinar, “E-Signature Today: Law, Innovation and Growth,” October 16, 2019

D. Whitaker, MERS Webinar, “eNote Legal Guidance,” October 15, 2019


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