E-Signatures are Legally Valid But There are Some Legal Issues

We live in a digital age, and just your day to day experience, where you likely have signed contracts electronically before, would tell you that electronically signed signatures or e-signatures, are legally valid and binding.

But that’s not the end of the legal issues or inquiry. If you have a contract that is being e-signed, there are things that you need to know or be aware of, to ensure you don’t have legal problems down the road.

The Same as Real World Contracts

Legally, electronic contracts and signatures work the same way as normal, paper ones do. That does bring some challenges.

One such challenge is the requirement that certain contractual provisions and disclosures must be signed separately, or at least, must be set out from the rest of the text of the agreement.

For example, waivers of liability or waivers of the right to a class action lawsuit, or requirements to arbitrate (and thus waive the right to trial by jury), all have to be signed separately, or at least, must stand out from, and be distinct from the rest of the contract.

That means that your e-signature document must have separate lines for the user to check or initial or e-sign, next to those specific provisions.

Adhesion Agreements?

Because there is no editing or back-and-forth negotiation with online signatures, they are contracts of adhesion, and thus, contracts that are inherently unfair to a side, may be challenged on that basis.

“I Never Signed That”

There are often claims of forgery: someone sued often says that his or her signature was e-signed by someone that wasn’t him or her. In real life, we can look and analyze a paper signature to see if it was forged, but that luxury doesn’t exist in e-signatures.

Many courts have denied claims (or defenses) of forgery, but you should nonetheless have a verification process for users, before they sign a contract online; in other words, a user may have to verify an email address, or get a text message code, or even upload identifying documents (like a drivers license) verifying the person behind the computer or device is the person signing, before signing an agreement, so that later, any allegations of forgery can be defeated.

Some courts have said that users who e-sign, and then act as if they understood and signed the contract will be assumed to have signed the contract, even in the face of allegations of forgery.

In more complex cases, or in cases where there was no verification process, computer experts may need to be called in to verify the location of the computer that signed, or to analyze other activity on the computer or device that was used, to verify the person who signed is the person being bound to the agreement.

Doing business online? Make sure you’re doing it right. Call our Fort Lauderdale business litigation lawyers at Sweeney Law P.A. at 954-440-3993 for help with your online business.

Sources:

oneflow.com/blog/are-electronic-signatures-legally-binding/

docusign.com/products/electronic-signature/legality