Retaining only electronic copies of documents can spare a business the high space and labor expenses associated with maintaining cavernous paper file rooms. But there can be costs associated with going paperless as well. Under Federal Rule of Evidence 1002 (and the corresponding rule in most States), the so-called "Best Evidence Rule," a party to a lawsuit generally can only prove the content of a document by producing the original in court. Although the definition of "original" is broad, and there are exceptions to the general rule, a business can find itself in an expensive evidentiary battle if it only has an electronic (or other) copy of a contract it's trying to enforce.

Although the admissibility of electronic copies of originally physical documents is a largely unexplored area of the law, this is likely a situation in which an ounce of prevention is worth a pound of cure. If your business is going paperless, consider including a clause in its contracts which provides that the parties agree that an electronic (or other) copy of the original has the same force and effect as an original, and/or that the parties agree to waive the right to assert that such copies fail to comply with the Best Evidence Rule. It may also be advisable to continue to retain the physical originals of already existing contracts.