In this blog series, I have written several times on the subject of electronic transactions—that is, how to conduct business electronically. See here, here and here. The surge in remote transactions has accelerated during the COVID Pandemic with the need for electronic signatures that evidence mutual agreement to contracts.

There are many e-signature software solutions on the market. Some of these are Docusign™, Hellosign ™, PandaDoc™, SignNow ™, and Quick Books™. Each has its own benefits and cost structure. The major benefit of each is that a “signature” is affixed to a document, and this factor makes the document appear more normal to a regulator. However, what about contracts that have no apparent signature affixed? Are these contracts enforceable?

The two principal laws addressing electronic transactions are the Uniform Electronic Transactions Act (adopted by many states in the United States) and the federal Electronic Signatures in Global and National Commerce Act (E-SIGN Act). Both laws make clear that the parties to a contract may agree to conduct transactions electronically; and that agreement is determined by the context and surrounding circumstance of their conduct. As long as there is a clearly demonstrated consent to transact business electronically, an electronic contract is fully enforceable (with limited exceptions as to some types of agreements). Techniques used to demonstrate acceptance include electronic (email, text, facsimile) responses such as clicking “I accept” on a website or an affirmative response to an offering communication sent electronically.

So, the short answer to the questions above is that contracts may be fully enforceable even if a wet signature or an e-signature does not appear on the document itself. While certainly easier for a regulator to see the signature affixed to the document, as long as the technique used to demonstrate acceptance is clear, the contract should be given full force and effect.

Practice Pointer: Check-out your electronic contracting processes; and, when in doubt, talk to your regulator.

Please Note: This is the one hundred seventy-first blog in a series of Back to Basics blogs, in which relevant and resourceful information can be easily accessed by clicking here.