Contracts and Electronic Signatures

It's unnecessary to sign commercial contracts with a pen but the practice persists.FN1

The federal Electronic Signatures in Global and National Commerce Act, enacted in 2000 (note the federal law does not apply to intra-state transactions) and most states (due to the Uniform Electronic Transactions Act being adopted by most states) allow electronic signatures (or signature via an electronic record) for the valid execution of a contract. Neither law imposes a rigid format on the signature, so the fact that there isn't a “digital signature” - i.e., something like "/s/ Firstname Lastname" - doesn’t affect the fact that you can be deemed to have signed a contract by email correspondence.

Manual signature remains the custom in part because manual signature is a pretty effective authentication of the signator's willful and knowing acceptance of the terms of the contract (because a manual signature is personally identifiable in a (somewhat) unique way). Thus, reliance on an electronic signatures demands i) some proof of identity - something to verify that the putative signator's brother/aunt/stalker didn't send the electronic signature and ii) something to indicate that the signator knew what he was agreeing to (which is why when you go to amazon or bestbuy.com or wherever they require you to scroll down through terms and conditions or check some box (or an equivalent)) before you click through.

To the extent there is a mechanism in place that addresses these two issues statutory requirements will be satisfied. In most cases, verbal confirmation followed by an email from the signator enclosing the signature page with his electronic signature (first and last name) should suffice.

The effect of this, beware, cuts two ways. First, it means the process for executing a contract has been simplified. Second, however, it means e-mail correspondence may have unintended results. A vaguely worded or poorly thought through email can trigger all the responsibilities and obligations of an agreement. (Note that this could happen AFTER the agreement has been executed.FN2).

FN1. Note that certain contracts, such as trusts and certain real estate contracts, still require old school, manual signature and probably will for a good while longer.

FN2. E.g., in Stevens v. Publicis, S.A. (2008) the New York State Supreme Court held that a written agreement could be modified (i.e., amended) by e-mail correspondence.