Corporate Counsel Guide: Legal E-Notices for 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.”