"Electronic signatures and wholly digital contracts are only actually being used in very specific areas at this point," says Ray Wang, an analyst with Forrester Research in Foster City, California. "We're still seeing an adoption barrier but that barrier is finally starting to come down."

In Long v. Time Insurance Corp., the judge found that the insurer didn't have to pay the insured's claim for a heart procedure because he had failed to disclose previous heart problems on his application, which he guaranteed was accurate with an electronic signature.

Electronic signatures can be as simple as clicking "I agree" or requiring insertion of a special identifying USB fob and entering a pin number. But to hold up in court, there must be a way to authenticate the signer's identity, such as answering security questions like "What's the name of your favorite teacher?"

There must also be informed consent, which is usually accomplished by requiring the signer to read and approve terms before they are able to sign and submit a document. Documents must also be digitally sealed to prevent changes.

Meeting these requirements is a digital documentation protocol implemented last year by the Pharmaceutical Manufacturers Association and approved by the Food and Drug Administration. It lets researchers, executives, and regulators securely transmit laboratory and clinical studies and other drug development documents as well as conduct paperless transactions with vendors.

"To get a new drug through the approval process takes one to six million pages of paper," says Mollie Shields Uehling, president of Signatures and Authentication for Everyone. "Instituting a reliable, interoperable system of electronic signatures is obviously a huge savings in time and money and storage."

Companies like GlaxoSmithKline, Johnson & Johnson, AstraZeneca, Merck, and Procter & Gamble have embraced the standard.

Some life insurance applications are now wholly digital. Primerica Financial Services, for example, began equipping its sales force last year with hand-held devices that allow them to sign up customers in their homes. "All the data along with their electronic signature is inputted right in their living room," executive vice president Tom Swift said.

Primerica has processed more than 350,000 electronic applications so far. By erasing the cost of keying in data from paper forms, reducing corrections, and eliminating postage, Swift said "it's been a huge money saver for us."

While Primerica developed its electronic documentation and verification software in-house, many companies are looking to outside vendors like VeriSign, Adobe, and Communication Intelligence.

Penn State and the University of Chicago, for instance, use an Adobe application to sign and seal student transcripts so prospective employers can be assured that the electronic record they receive has not been altered.

Smaller companies like VeraFirma in Oakland, California, are rolling out Web-based applications where parties to a transaction can log on to a site and view and electronically sign secure and unchangeable documents and contracts.

Michael Ni, founder and C.E.O. of VeraFirma said that startups like his as well as older technology companies are rushing to offer innovative and easy ways to get deals signed and sealed electronically.

"The question for businesses in 2009 is no longer 'Can we do this?'" he said, "but 'How can we do this?'"