How Notarization Works
Notarization of documents is a part of almost any sophisticated transaction. But what is the purpose of notarization and how does it translate into the legal standards for documents? Basically, notarization is a way to provide a third-party report as to the circumstances in which, and the identity of the person or persons signing the document. When a document is notarized, the notary takes written evidence of the transaction, similar to what you would expect to see in a court transcript. But instead of taking down a verbatim transcript, the notary takes a few facts about the signers and an acknowledgment that they are voluntarily signing the document.
Legally, the significance of notarization can be seen at trial through a number of doctrines , as well as through the Federal Rules of Evidence. A few of the more common forms of notarization are outlined below:
The doctrine of entries in the regular course of business is derived from Article 11 of the Uniform Commercial Code (which governs negotiable instruments), and has been adopted by courts to determine the admissibility of business records. See, e.g., California Evidence Code §1271. Commercial Code section 3301, defining negotiable instruments, contains the definition of "signature," which includes "any symbol executed or adopted by a party with present intention to authenticate a written or electronic instrument."
It should also be noted that as a practical matter, although a notarized copy of a document may not be sufficient evidence to prove validity of that document (unless the validity is self-authenticating), many times a notarized copy will be accompanied by the original, which will be subject to inspection at trial.
What Is the Difference between an Original Copy and a Scanned Copy?
The principal difference between an original and a scanned copy is in the physical characteristics of the document. The physical attributes of a notarized document allow for its authenticity to be established. An original document features the presence of a raised seal, an ink signature and an wet ink thumbprint (if required). An original document is on a heavy weight bond paper, as opposed to a digital copy which is on a light weight paper. An original is the actual document on which an individual has affixed a handwritten signature. In most cases original documents must be recorded in the public records, while not all scanned copies may be recorded.
Scanned copies on the other hand are electronic replicas derived from physical originals. Thus, the environment in which a physical original is maintained, a number of factors such as temperature, pressure, moisture, exposure to sunlight and physical handling can affect the integrity of even an original document over time. Depending on the technology used to digitize a document the result is an electronic version that preserves the original features such as color, resolution and brightness. The proper maintenance of the scanner used benefits the quality of the digitized version. A scanned copy can become compromised if the digital file(s) becomes corrupt due to malware or hard drive failures. A scanned copy is an electronic version, so environmental factors do not effect it in the same manner as the physical original. As long as it is backed up on a secure system with proper computer security measures it can be retrieved without being having to recover physical evidence.
While a physical original document is susceptible to corruption over time, forensic handwriting exams can be performed on the original to preserve authenticity. While a digital copy can be authenticated with the use of a forensic handwriting analysis. Herein lies the fundamental difference. Only by viewing both an original and digital copy of a document can establish whether or not a physical document has been altered. Unless otherwise agreed upon between the parties involved in an agreement, the original document is the authentic copy.
Notarized Documents Are Legally Valid When They’re Scanned
Both federal and state law currently establish that parties can use a facsimile copy of a signed, notarized, and/or certified document in lieu of its original counterpart. Even some probate courts have held that such copies are acceptable—as long as the original is on file and the website for that court states that copies of notarized documents with facsimile signatures are valid.
However, the law is not yet well settled in other areas, and if you have a specific use or issue in mind, we recommend consulting with your own legal counsel who can review the specifics of your situation as well as the law applicable in your jurisdiction.
For example, some courts have previously held that an original of the contract was required to prove the defendant’s breach of contract and resulting damages, so the copies of the scanned document were not admissible. Other courts have not adopted this rule, and instead held that if the copies of executed contracts and related documents are "together with a full account of all material alterations," such copies can be used. However, these decisions also cite the Uniform Rules of Evidence § 1003, which is not universally adopted by the states.
In other areas, federal rules governing the Civil Discovery Practice Act (CDPA) in California Federal Court permit the use of scanned copies of documents that conform with §1003 of FRE, which allows for the use of duplicates unless (1) the document is a writing offered to prove its content; (2) the document is a copy of an original; and (3) there is a genuine question as to the authenticity of the original.
A simple solution to this potential minefield is to sign the original in hard copy and then scan the signed document to PDF form for email or transmission before seeking the signature of another party. This prevents any debate as to the authenticity of the original. You may also want to consider reviewing the Uniform Commercial Code § 105(e), specifically within the context of UCC Revised Article 9, which supports the types of electronic signatures you describe by permitting electronic signatures.
Top State Laws and Federal Laws
As discussed in this article, more and more institutions are adopting the use of authenticated electronic documents. But this process may be complicated by state or federal regulations that have not kept pace with electronic progress. Regulations govern how certain documents should be executed and these requirements may not have been updated to address electronic versions of documents or electronic notarization. In the United States, documents such as wills, contracts, and powers of attorney have state-specific regulations regarding their execution. Federal regulations may also apply to documents executed by federal agencies or to contracts which involve interstate commerce. These state and federal regulations could pose difficulties in the authentication process if not updated to include the electronic processes that are currently in use.
Fortunately, states are beginning to adopt new laws addressing the use of electronic documents, digital signatures and electronic notaries. To bypass hurdles with federal regulations, these revised state laws would constitute primary authority with regard to authentication of electronic documents, including notarized documents.
For example, Section 117 of the Dodd-Frank Act amends the Gramm-Leach-Bliley Act to provide that any Federal banking agency must accept authenticity certification procedures that meet the requirements of state law, regardless of the standards for certification or the format for presented documents required by such state law. Thus to the extent there is a circumstance where the state establishes minimum standards for the authenticity of documents, then those standards would be dispositive under federal law.
The Effect of Notarization When Done Electronically
Factors relating to the notarization of documents that were not anticipated or not fully considered and even planned for prior to 2006 and presently are impacting the acceptance of scanned copies of notarized documents. These factors relate to electronic notarization – a process by which the notarial act is performed with the use of computerized processes or electronic technologies and the individual requesting the notarial act and the notary use different forms of electronic technologies to carry out the notarial act. The first form of electronic notarization, electronic notary signatures, was enacted in 2006 and over the next several years, technology was adopted by numerous other states. The use of electronic notary signatures rapidly expanded to well over half the states in mid-2013 when the National Association of Secretaries of State finalized its electronic notarization assessment. While many experts expected "the market would go nuts" (as one person put it), electronic notarization emerged out of the "downturn" and began to grow at a steady pace. Electronic notarization was anticipated to have "expanded … completely within five years" according to Doug O’Brien, vice president for state and regulatory affairs for the National Association of Secretaries of State. The increased use of electronic notarization has impacted the acceptance of scanned copies of notarized documents relative to traditional in-person notarization.
Notaries began to embrace electronic technologies because using the computerized electronic journal of notary acts offered efficiencies and cost savings not previously available. Further , electronic journals are tamper-proof using encryption and an audit trail feature. Both these features assure the individual requesting the notarization the notary is following the laws related to fraud prevention required by many states. Upon the completion of the notarization, computer-generated document copies can be immediately e-mailed to the person requesting the notarization. The e-mailed document copies can be attached to an e-mail or be uploaded to a secure website shared between the parties involved in the transaction.
The use of electronic notary signatures and e-mailed notary certificates resulted in electronic notarization begin immediately accepted by federal and state agencies, which had been demurring previously. This technique went from "an idea that was pushed as the panacea" to become "widely accepted." According to Michael Liberman, acting Commissioner of the U.S. Department of Labor’s Employee Benefits Security Administration in 2010, "In the case of scanning, the many electronic tools that are available provide a bridge for the U.S. Pension Benefit Guaranty Corporation and individual plan sponsors to quickly establish protocols that would be acceptable for electronic copies of [documents]."
The adoption of electronic signature technologies and other forms of electronic signatures continued to increase acceptance of scanned copies of notarized documents. Although there was some pushback by the Federal Aviation Agency (FAA) in 2010 and 2011, the FAA (and key senators in Congress) adopted "a favorable position" to electronic signatures and now has a favorable view toward scanned copies of notarized documents.
Hot Topics Related to Scanned Copies
While not universally recognized as legally valid, there are a number of situations in which courts and other agencies will accept scanned copies as valid, notarized documents.
In California courts, for instance, Faber said scanned documents are usually accepted. "As long as the document is legible and you can read the notary stamp, it would be accepted," she said.
The acceptance of scanned copies of notarized documents may differ outside of California. In most cases, though, the adjudicator or other reviewer will look for the notary’s signature and seal in order to validate the document.
New York allows for the acceptance of notarized documents where an affidavit is not necessary, according to the 2013 e-Appendix to That’s Your Signature! Notaries Who Go the Distance to Verify Signers.
Even in cases where states have not officially reviewed the legality of scanned copies, recent court cases have addressed the topic. In Cessna v. Sorensen, No. F050314, 2007 WL 1695268 (Cal. App. Ct. June 12, 2007), the California Court of Appeals stated "There is some evidence that the copy of the notarization was a true copy and the statutory requirements for notarization were met by the original, since the jurat on the copy states they were."
Similarly, the case of GMAC Mrtg. Corp. v. Pac. Trust Bank, 88 Conn. App. 774 (2005) stated "even though the defendant failed to produce a seal on its copy … the superior court properly concluded that the copy was a true and accurate representation of the original."
It’s important to note that the above cases all involve a party attempting to enforce a contract. In these situations, the judge has discretion to consider scanned copies as valid.
Tips for How to Use Scanned Documents
In most cases, the legal enforceability of a scanned copy of an original notarized document should be nothing more than an afterthought. However, if you find yourself faced with that issue, here are some practical recommendations:
- If you have a scanned copy of a notarized document, get the original in your hands as soon as practicable. The scanned copy may be sufficient for other purposes, such as for internal record-keeping or to provide information to another person, entity, or government agency. It may not be sufficient, however, when it comes time to enforce or defend the rights and obligations created by the original document.
- Have a copy of the original notarized document handy when you send the scanned copy for use in an enforceable manner. Include a statement that says something like, "This is a scanned copy of an original signed and notarized document attached hereto." The purpose of this statement, if you are on the receiving end of a scanned copy being provided to you, is to let you know that the scanned copy is not the best evidence of the parties’ rights and obligations, but only a copy subject to being trumped and replaced by the original.
- When you do need the original signed and notarized copy, you may even want to adopt a rule for yourself that every once in a while you have to retrieve all of your originals from your security box and review them in order to be sure you can find them if and when they are ever needed. The same is true for institutions that have possession of original executed and notarized documents. There can be no substitute for being able to lay eyes on the original, especially if the person producing the scanned copy is, or may be, untrustworthy.
- In the end, if you find yourself challenged by an enforceability issue, the determination of the issue might be the result of the fact-specific position from which you are approaching the problem, your familiarity with the law, and the skill of the lawyer on the other side of the dispute.
Bottom Line and Expert Advice
In conclusion, there are various legal, statutory, and technological views on the validity of scanned copies of notarized documents. While some courts permit the use of scanned copies in proceedings, others trend toward the stricter requirement of paper copies. The differences in opinions may be due, in part, to the evolving contours of digital notaries. Accordingly, even if scanned copies are currently acceptable, the validity of these copies may eventually depend on evolving technological advancements.
Top legal professionals on this matter vary in opinions. Robert Anderson, a notary and risk analyst at Bank of the West, stated that "the practical reason [why scanned copies] are sufficient is that the purpose of a notary public is to protect documents from fraud, and it therefore does not matter if that protection is afforded to the original or a copy . " He added, though, that "realistically banks, brokers, and other entities that require notarized copies know that scanned copies are valid where allowed by their state’s notary laws and they seldom make an issue of it." Robert Wood, a prominent tax attorney, added that "banks realize that e-mailed or faxed copies are acceptable, and I suspect they will not insist on regular hard copies and wet stamps. […] A scanned copy is a lot more comparable to a faxed copy … so I do anticipate banks will embrace them."
Ultimately, though, all agree that regardless of technological developments the simplest course of action would be for all relevant states to allow the use of scanned copies of notarized documents. For now, however, it is best practice to have both paper and scanned copies of notarized documents.