IN THE AGE OF E-COMMERCE:
WHEN IS A SIGNATURE A SIGNATURE?

At the risk of stating the obvious … an increasing amount of communication, hence business, is being conducted over the Internet. In the "old days" a person could usually feel comfortable with the time when they had actually formed a binding contract. The act of signing the document usually marked the key moment when the contract was made, and the signature itself was often notarized as a mechanism to guard against mistake or fraud. Today, with the advent of e-commerce, legislators, attorneys, and the business community are working to adapt our conventional notions of a "signature" to the electronic universe.

The first baby steps in this revolution took place as business people came to rely on the fax machine. Most people have understood that under certain circumstances a fax of a signed contract would be considered a binding contract. The real estate and construction community have operated on this premise for years. However, most people followed up their fax transmissions with documents containing original signatures just in case. As a general rule of law, a contract is binding when the parties manifest their intent to be bound by the contract. If an agreement is required to be in writing, a signature on a document such as a fax can be considered a signed writing if the party so intends. However, a person may intend that the fax document not operate as an original. See Klein Development v. Ellis K. Phelps & Co., ___ So.2d ___ (Fla. Dist. Ct. App. 2d Dist. 2000). With fax documents, just as with signed original documents, there is still the issue of forgery.

The 2000 Florida Legislature passed the "Uniform Electronic Transaction Act," which addresses many of the problems and issues of doing business electronically. The act defines an electronic signature as "an electronic … process … executed … by a person with intent to sign the record." Ch. 2000-164 Laws of Florida, §1(2)(h). If the law requires a document to be in writing, and the parties agree to conduct the transaction by electronic means, the requirement is satisfied by the electronic record. Ch. 2000-164 LOF, §1(8)(a). An electronic signature is attributable to a person if the signature was created through an act of the person, and this fact may be shown through an appropriate electronic security procedure. Ch. 2000-164 LOF, §1(9)(a). If a law requires a document to be notarized, the requirement is satisfied if the electronic signature of the notary is attached to, or logically associated with, the signature or record. A seal is not required. Ch. 2000-164 LOF, §(11). If the law requires a record to be retained, keeping an electronic version of the document may be sufficient. Ch. 2000-164 LOF, §(12).

Although we are entering a new technological era, there is little doubt that well-establish legal principles will continue to operate. In other words, be careful what you intend. If you intend a signature to be a signature, it may well be construed by a court to be a sign.

We would like to address areas of reader concern in these articles. You may submit questions in writing to us by snail mail or email (leibyl@leibylaw.com). Questions should be framed as general, hypothetical questions since we can not provide specific client advice in this format.