Monday, June 10, 2024

Paperless Power: Exploring the Legal Landscape of E-Signatures and eNotes

Beth A. Goldstein and  Dustyn Marie Macia

In an era characterized by rapid technological advancements and the profound shift towards remote work, the traditional concept of signing documents with pen and paper has evolved. Electronic signatures, or e-signatures, have emerged

as a convenient and efficient alternative, promising to streamline processes, reduce paperwork, and enhance accessibility. Organizations are increasingly embracing e-signatures for a wide range of transactions, prompting a closer examination of their legal validity.


An e-signature encompasses any electronic sound, symbol, or process associated with a record and executed with the intent to sign. These can range from scanned images of handwritten signatures to digital representations generated by specialized software.


The governing law for e-signatures in the United States includes both state-specific laws, like those based on the Uniform Electronic Transactions Act (UETA), and the federal ESIGN. ESIGN applies to interstate and foreign transactions, harmonizing electronic transactions across state lines. Many states, including Massachusetts, have adopted UETA, reinforcing the legal standing of e-signatures within their jurisdictions (MUETA).


Generally, e-signatures are legally binding in the Commonwealth of Massachusetts.  However, certain documents like wills, adoption papers, and divorce decrees are excluded from the scope of ESIGN and MUETA to safeguard consumer rights and maintain traditional legal practices.

The following components must be present for e-signatures to be fully protected and upheld under ESIGN and MUETA:

  • Intent: each party intended to execute the document;
  • Consent: there must be express or implied consent from the parties to do business electronically (under MUETA, consumer consent disclosures may also be required). In addition, signers should also have the option to opt-out;
  • Association: the e-signature must be “associated” with the document it is intended to authenticate; and
  • Record Retention: records of the transaction and e-signature must be retained electronically.

Meeting these requirements ensures that e-signatures have the same legal validity and enforceability as traditional handwritten, wet-ink signatures in Massachusetts.



An eNote is an electronically created, signed, and stored promissory note. It differs from scanned signatures on paper or PDF copies. Governed by Article 3 of the Uniform Commercial Code (UCC), eNotes are considered negotiable instruments and therefore require special treatment. ESIGN provides a framework for their use, emphasizing the concept of a “transferable record.” This electronic record, meeting UCC standards, grants the same legal rights as a traditional paper note to the person in “control.” The objective of “control” is for there to be a single authoritative copy of the promissory note that is unique, identifiable, and unalterable.  Therefore, proving authenticity and lender control over eNotes can be complex.

In Massachusetts, specific foreclosure laws require the presentation of the original note. Thus lenders should be cautious with eNotes, as possessing an original, physical note greatly reduces enforceability risks.

Further, financial institutions often face heightened scrutiny when using e-signatures due to the sensitive nature of financial transactions and the potential risks involved to ensure security, compliance, and consumer protection.


E-signatures have become widely accepted for recording purposes, including in real estate transactions, due to their convenience and efficiency. The implementation of e-signatures for recording has been facilitated and standardized by legislation such as the Uniform Real Property Electronic Recording Act (URPERA).  While URPERA offers a comprehensive framework for electronic recording, its adoption varies from state to state. In Massachusetts, URPERA has not yet been formally adopted, leaving recording procedures subject to individual county regulations.


Despite the legal recognition of e-signatures under both ESIGN and MUETA, to ensure compliance, organizations should adopt the following best practices:

1.    Obtain Consent: Obtain (and retain) affirmative consent from parties to conduct transactions electronically.

2.    AssociationEstablish a clear and direct connection between an electronic signature and the electronic record it is intended to authenticate.

o    Embedding: One common method of meeting the association requirement is embedding e-signatures directly within electronic documents.

o    Metadata and Audit Trails: Another method is using metadata and audit trails. Metadata contains signature details like signing date, time, signer identity, and transaction specifics. Audit trails chronicle all document actions, reinforcing the link between signatures and records.


3.    Ensure the Integrity of Electronic Records

o    Authenticity and Integrity: Use secure methods to authenticate the identity of signatories and ensure the integrity of the electronic records. This can include digital signatures, encryption, and secure access controls.

o    Single Authoritative Copy: For transferable records (eNotes), ensure that there is a single authoritative copy that is unique, identifiable, and unalterable except through authorized actions.

4.    Maintain Accessibility and Retainability: Ensure that electronic records are retained in a format that is accessible and readable for the required retention period. This includes being able to accurately reproduce the record in its original form.

5.    Security Measures: Implement robust cybersecurity measures to protect against unauthorized access, alteration, or destruction of electronic records. This includes using firewalls, encryption, and secure user authentication methods.

6.    Provide Consumer Protections: Ensure that consumers have the option to receive paper records and can withdraw their consent to electronic records at any time.

7.    Legal and Regulatory Updates: Keep abreast of any updates or changes in the legal and regulatory landscape regarding electronic transactions and records. Adjust policies and practices accordingly to remain compliant.


While e-signatures offer significant benefits for modern commerce, including efficiency and convenience, their adoption requires careful consideration, especially regarding legal and regulatory compliance. By adhering to best practices and remaining vigilant, businesses and individuals can leverage e-signatures effectively in today’s digital economy.

A partner in the Boston firm of Sherin and Lodgen LLP, Beth Goldstein is a partner in the firm’s real estate department and chair of its renewable energy practice. She represents buyers, sellers, developers and lenders in both traditional commercial real estate transactions and those involving the purchase, sale, financing, leasing, and development of renewable energy projects.  Beth can be contacted at 

Dustyn Marie Mascia is of Counsel in Sherin and Lodgen’s real estate department and a member of its commercial finance group. She represents financial institutions and other lenders in commercial and industrial, asset-based, commercial real estate, affordable housing, renewable energy loan and credit transactions.  Dustyn’s experience includes drafting and negotiation of loan and credit documents, interest rate swap documentation, participation agreements, and intercreditor and subordination agreements.  Her email address is