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Are Dealers Legally Allowed to Use Electronic Signatures?

Some dealers are considering using electronic signatures. Electronic signatures are generally allowed under Texas and federal law.
The federal E-Sign Act, 15 U.S.C. §§ 7001–7006, includes requirements for electronic disclosures and signatures. The E-Sign Act allows disclosure to be made electronically only if the consumer consents to an electronic disclosure using a specified procedure that demonstrates the consumer's ability to receive the disclosure electronically. 15 U.S.C. § 7001(c)(1)(A). 
 

Before consenting, the consumer must be given a clear and conspicuous statement of:  

  • Any right or option to get the disclosure in non-electronic form;
  • The right to withdraw consent and the procedures for and consequences of doing so;
  • What transactions the consumer's consent applies to;
  • The procedures for updating the information needed to contact the consumer electronically; and
  • How, after consenting to electronic disclosures, to obtain a paper copy of any disclosures, and whether any fee will be imposed (15 U.S.C. § 7001(c)(1)(B)).

The consumer must be given a statement of the hardware and software requirements for access to, and retention of, electronic records and must either give consent electronically to receive electronic disclosures or must confirm consent electronically. 15 U.S.C. § 7001(c)(1)(C).  
 

When disclosures are provided electronically, the E-Sign Act requires that the record be retained in a manner that “accurately reflects” the information in the record, and “remains accessible” to all persons in a form that is capable of being accurately reproduced for later reference. 15 U.S.C. § 7001(d). This means that consumers must have a way to keep electronic disclosures for use at a later time 

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