Guides & Opinions
Converting Legal & Contract Notices from Paper to Electronic Delivery, a Corporate Counsel
Guide for Factors and
Asset-Based Lenders
This Guide focuses not only on the legal principles of ESIGN and UETA requirements, but also
evaluates the legal
principled of the Uniform Commercial Code Article 9 and the electronic chattel paper. It
explains the different types of
technologies available and capabilities. It concludes that RPost, with its Registered Email™
service is a comprehensive
solution that meets all of the noted criteria. Factoring is an information-intensive
industry that requires painstaking
delivery and management of transaction notices associated with assignment and chattel paper,
and until the advent of
RPost, the industry has not been able to realize fully the efficiencies of email while being
legally protected at the
same time.
RPost provides a simple, inexpensive solution to the shortcomings inherent in standard email
because it provides the
sender with legal proof of both the content of email messages sent and the corresponding
delivery status to any Internet
mail destination thus providing legally verifiable evidence of the transaction in case of a
dispute after the fact. A
critical convenience for factors is the pure simplicity of the Registered Email service
which does not require the email
recipient to sign up for the service or maintain additional user names and passwords that
otherwise would render it
unmanageable. RPost resolves the operational impediments and legal issues that have worked
against employing standard
email for high value correspondence and permits movement to electronic in a manner that
complies with industry
best-practices for proof of required notifications and signoff verifications. The
result?
Cost savings, faster and more efficient business processes, and greater competitive
advantage. The RPost solution for
factors consists of two components. The company’s patented Registered Email™ service
provides legally verifiable and
court admissible proof of email delivery, message content including attachments, and
official time stamp. The proof is
in the form of a Registered Receipt™ email, which contains a digital snapshot of the entire
email transaction and can be
self-authenticated within minutes.
Factors are using RPost’s Registered Email service to virtually eliminate disputes about
whether or when notices (such
as notices of assignment, notices of default and borrowing base certificates) were received
by email. Factors also
report that the service puts an end to the common “I never got the invoice” electronically
received. With the factor
retaining irrefutable proof of receipt of the invoice, the start time of invoice aging is
firm, empowering the factor to
increase cash by collecting on late payment penalties.
In providing “legal proof” of delivery, it is also critical that official time stamps be
employed as computer clocks can
be set to read whatever time is desirable rendering such records meaningless. “In addition
to proving delivery of
notices, factors must exercise ‘control’ over documents such as electronic chattel paper to
ensure their enforceability
under UCC Article 9,” comments Jon Neiditz or Locke Lorde Bissell and Liddell LLP. “RPost’s
Registered Email service not
only proves delivery and adds weight to email evidence, but is also likely to meet these
‘control’ requirements.”
