[author: Michele Bowman]
How many times have you sent those two simple words in an email? Did you know that by doing so, you could signing an enforceable contract?
A real estate agent who thought she was a couple’s “exclusive” broker suing them after they used another agent to buy a home, saying they had a contract via email. As a result, an Arizona appellate court has required a trial court to address what counts as an electronic signature for contractual purposes.
Buyers Signed, Agent Didn’t
In Arizona, real estate agents are required to have signed contracts for commissions in order to collect them. The agent in this case, Julie Young, was helping Jordan and Jason Rose look for a home, according to the appellate decision, handed down on Sept. 25.
After the Roses became interested in pursuing one particular property, the agent sent them a PDF contract, which Jordan and Jason both hand-signed and sent back via email to Young. What Young did next is the crux of the case: She simply sent back an email, with her electronic business card, saying, “Thank you.”
Young’s electronic business card included her name, business address, e-mail address, telephone numbers, website address, and photograph, according to the opinion. She never manually signed the agreement.
After the Roses bought a home through another agent in violation of the PDF agreement they’d signed, Young sued to recover her commission, as provided for in the contract.
Electronically signing documents is a staple of modern life. Remember snail mail? Who sits down in the same room with someone to sign a W-4 or a change of address form?
“Ideally, the parties can save time and operate in different locations more efficiently because they do not have to wait for an original signature on a contract to arrive by mail,” says Lisa Wilcox of Wilcox Law P.A. in Saint Petersburg, Fla., of the modern convenience of e-signing. “Instead, they can email or fax the agreement and then have it be considered a valid contract.”
Variations in “Uniformity”
According to the Uniform Electronic Transaction Act (UETA), electronic signatures are any electronic sound, symbol, or process attached to or logically associated with a document or contract, and executed or adopted by a person with the intent to sign the contract, explains Wilcox.
Forty-seven states – including Arizona – have adopted UETA. While you would think some kind of uniformity would result, that has not been the case. “Each state has had varying interpretations as to what it considers a signature because it has to look to the intentions of the parties,” Wilcox says.
“For example, in Missouri a court found that where an email contained a header with a person’s name that was sufficient to be considered their signature,” she says. “However, in Texas a court found that a signature block on an email was not a signature without something else to identify the email sender’s intention.”
Young has to go back and prove intent – that both parties to the transaction jointly agreed that they’ll use electronic signatures to form a contract, Wilcox says. Courts determine email senders’ intentions on a case by case basis.
Put It in an Email
Even the appellate court acknowledged it may be unfair that the defendants in the case actually signed the contract. But the law’s the law.
If you’re considering using your electronic signature to seal a deal, avoid the unfairness Young possibly faces by documenting everyone’s intent.
Wilcox recommends doing several things:
Clearly state in your email that the purpose of the email is to form a contract.
Each party should respond in an email to the other that they agree to the use of an electronic signature to form the contract.
Each party should respond in a confirmation email as to the terms of that contract.
If you’re unsure whether you’ve entering into a legally-binding contract, you can look up a local real estate attorney to help you on Lawyers.com
Do you think a “thank you” email should count as a signature on a contract?