Are E-signatures and Other Electronic Contracts Legally Binding?

Electronic contracts are any type of written agreement or contract between two or more parties that exists only in electronic form. Many of the questions regarding the enforceability of contracts with businesses on the internet generally concern “click-through” contracts or contracts entered into while viewing websites or emails.

Under traditional contract law, certain types of agreements required writing and a signature to be valid. This is the law of fraud. Real estate contracts, wills, and certain other documents and contracts that are not enforceable within one year of signing must be in writing (statute of frauds) in most states. Agreements based on an exchange of e-mails concerning matters that do not require a written document have been found to be valid and enforceable; CompuServe, Inc. v. Richard S. Patterson (1996).

Since that case, a number of precedents have been set and the ESIGN Act and the Uniform Electronic Transactions Act (“UETA”) have been passed. It is clear from these statutes that an e-mail or series of e-mails meets the requirement of a signed document. In particular, under the UETA, click-through agreements and e-mail exchanges may cover transactions. For which signed writing is required under applicable fraud statutes.

Sale of Goods

Many Internet transactions involve the performance of contracts related to the sale of goods. Many states’ anti-fraud laws require that contracts for the sale of goods valued at $500 or more be in writing. However, according to UETA, electronic transactions are a fraud offense because electronic order forms are considered “written” under the law. The customer’s “signature” can also be legally affixed. By clicking the “I agree” button or by affixing another electronic signature permitted by law. As described below.

The Uniform Commercial Code (UCC) is the primary statute governing the sale of goods; the UCC is the model law. Adopted in one form or another by nearly every state in the United States. The UCC regulates the sale of goods through Article 2. Which provides for the legal recognition of electronic contracts, records, and signatures.

Electronic Signatures

As with written contracts, all valid and enforceable electronic contracts must confirm. In some form, the parties have agreed to the terms. From a legal perspective, the principles of common law (judge-made law) continue to apply to electronic contracts and the customer must indicate his or her willingness to accept the contract. There are a number of ways to indicate acceptance of an electronic contract. That meets the basic legal requirements for offering and accepting a contract.

For example, your company may require the customer to enter their name in the signature field. At the bottom of the terms and conditions page. Some of my clients ask me to insert a scanned copy of their signature. But the easiest way is to have the customer click the “I agree” or “I accept” button. In all of these cases, your company is asking the customer to perform a positive action. That shows they agree to the contract. It is very important that you ask the customer to accept the terms so that there is no doubt about their acceptance.

There is no right or wrong way to collect electronic signatures. As long as the basic elements constitute a valid contract and meet its acceptance.

In short, to create a valid electronic signature on a product purchase contract. It is always necessary to ask certain things of the customer.

About Author

Sally Hickman Green is a 30-year-old who enjoys blogging for electronic signature, Educational Contracts, internet marketing, and social media marketing. She is inspiring and generous in blogging. She has a post-graduate degree in Computer science.

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