Complying with the Uniform Electronic Transactions Act

Every contract in California (and across the country) must meet certain legal requirements to be considered “valid,” such as the manifestation of assent by both parties to be bound by the terms of the transaction.  For centuries parties have been “signing on the dotted line” to evidence their assent to the terms of the agreement.

In an increasingly digital economy many contracts are being consummated electronically.  The Uniform Electronic Transactions Act (the “UETA”) (found at Civil Code § 1633.1 et seq.) responds to the proliferation of contracting and business conducted by electronic means in California.  By following the guidelines of the statute the parties can complete all parts of the transaction entirely by electronic means, including through the transmission of electronic signatures.

Recently, the California Court of Appeal ruled on a case that dealt with the UETA’s provisions governing electronic signatures.  In J.B.B. Investment Partners, Ltd. v. Fair, ___ Cal.App.4th ___ (December 30, 2014) 2014 WL 7421609, the issue that the court addressed was whether the defendant’s “printed name at the end of his e-mail was enforceable under both UETA and, if not, by the law of contract.”

Interestingly, the defendant in J.B.B. Investment Partners, Ltd. at first appeared to agree via email to the settlement agreement proposed by the plaintiffs.  However, once the plaintiffs filed suit to enforce the settlement, the defendant said that there had been no agreement under the UETA because he did not intend for his printed name in his emails to be an “electronic signature.”  The trial court disagreed, ruled to enforce the settlement agreement, and the defendant appealed.

The appellate court focused in on the definitional requirement for a signature under the UETA (Civil Code § 1633.2(h)), which requires that an electronic signature have the “intent to sign the electronic record.”   The court further found that another relevant factor was the apparent lack of agreement to conduct the settlement by electronic means, while acknowledging that the statute specifically does not require an express agreement, allowing the intent to be gleaned from “the context and surrounding circumstances, including the parties’ conduct.”

In the this case, somewhat surprisingly, the appellate court found that despite the defendant’s repeated emails saying “I agree,” the plaintiff’s failed to meet their burden of showing that the parties had agreed to consummate the transaction via electronic means.  While the court acknowledged that simple “names typed at the end of emails can be electronic signatures,” the issue here was that the agreement that plaintiffs were attempting to bind defendant did not appear to be a final agreement (here, meaning that additional terms were added later).  The court also found that later versions of the settlement agreement contained specific electronic signature provisions not found in the version that the defendant said he agreed to (such provisions requiring the use of commercially available electronic signature software), and that there was no agreement between the parties that a simple printed name at the bottom of an email would constitute a signature.  These same facts also led the court to conclude that there was no agreement under “the law of contract.”

Ezer Williamson Law provides a wide range of both transactional and litigation services to individuals and businesses. We have successfully prosecuted and defended various types of business and property claims. Contact us at (310) 277-7747 to see how we can help you with your business law needs.

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