President Clinton has signed the Electronic Signatures in Global and National Commerce Act, or E-Sign.

The law brings the US into line with the UK where the Electronic Communications bill, which legally recognises cyber signatures, was signed a few months ago. Both laws render digital signatures legally equivalent to those signed on paper.

E-Sign is expected to bolster e-commerce by eliminating companies’ fears about the enforceability of online transactions. It requires that consumers be given the option to receive documents electronically.

It also stipulates that consumers and businesses must be provided with the proper software to ensure that electronic documents can be received, opened and read by them, to make the documents legally binding.

Supporters say it will have a huge effect on business-to-business e-commerce by speeding up the ability of companies to do business with one another through online procurement exchanges and electronic marketplaces.

However opponents of the law have criticised it, stating it does not include enough protection for consumers. Many believe the door will be left open for fraudsters who are capable of illegally obtaining or counterfeiting digital signatures.

Margot Saunders, managing attorney for the Washington office of the National Consumers Law Center, said: “We think identity theft is going to go through the roof because of this. I would advise consumers not to agree to [the use of] electronic signatures unless they are biometrically produced.”