{"id":1004112694,"date":"2015-02-04T10:24:52","date_gmt":"2015-02-04T18:24:52","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004112694"},"modified":"2022-12-04T04:08:54","modified_gmt":"2022-12-04T12:08:54","slug":"are-your-contracts-set-up-for-electronic-signatures","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/are-your-contracts-set-up-for-electronic-signatures\/","title":{"rendered":"Are Your Contracts Set Up for Electronic Signatures?"},"content":{"rendered":"

By\u00a0Manuel Fishman, Real Estate Attorney,\u00a0Buchalter Nemer\"Fishman\"<\/a><\/em><\/p>\n

There are statutes authorizing the use of electronic signatures in almost all states in the U.S., as well as by the federal government (see the applicable Uniform Electronic Transactions Act adopted in your State as well as the Federal Electronic Signatures in Global and National Commerce Act (ESIGN)).\u00a0\u00a0 Both UETA and ESIGN are technology-neutral statutes that operate as an \u201coverlay\u201d over existing laws (meaning that the statutes amend thousands of state and federal laws that require signatures).\u00a0 However, most importantly, neither statute changes the substance of laws governing what is required to form a contract.<\/p>\n

Some national shopping center chains have begun to adopt the use of electronic signatures as a part of their ordinary business.\u00a0 The residential real estate sector now uses DocuSign in most transactions, thereby eliminating the need for the hand delivery of the massive paperwork required to comply with applicable federal and states laws relating to residential home purchases and sales.\u00a0 So, why not commercial real estate?\u00a0 Some commentators have estimated that the use of electronic signatures can save roughly 1.5 to almost 4 hours per lease transaction.\u00a0 In addition, the use of electronic signatures reduces the need to print and copy long leases and other documents.<\/p>\n

But, it is important to remember that the definition of \u201csignature\u201d for purposes of electronic signature legislation contains two elements.\u00a0 It is an \u201celectronic sound, symbol or process that is attached to or logically associated with an electronic record\u201d and it must be adopted by the person using it \u201cwith the intent to sign the electronic record.\u201d<\/p>\n

A recent decision from December 2014, by an appellate court in California, focuses on the second prong.\u00a0 The case involved an investment of $250,000 by two persons in two limited liability companies that owned apartment buildings in Arizona.\u00a0 The investors sued the general partner for fraud and misrepresentation.\u00a0\u00a0 Negotiations ensued to resolve the dispute and a lawyer for the investors sent an email demanding that the general partner give a \u201cyes or no\u201d answer to their proposal for settlement.\u00a0 Although the e-mail message contained general terms that would support a final contract, there was no signature block for the general partner to sign, and the email did not contain the signatures of the investors.\u00a0 The general partner responded by saying \u201cI agree.\u201d\u00a0 The general partner\u2019s typed name appeared after that.\u00a0\u00a0 Needless to say, a dispute subsequently erupted over the terms of the settlement, and the general partner refused to sign the formal settlement agreement prepared by the investors\u2019 counsel.\u00a0 The court case that ensued was about enforcing the so-called exchange of emails as an enforceable settlement agreement.<\/p>\n

The conclusion of the court was that \u201ca typed name at the end of an email is not, by itself, a signature under case law.\u201d\u00a0 A typed name can be sufficient under certain circumstances as a signature, but the basic laws of contract formation require that the person who places his signature on a document do so \u201cwith the intention of authenticating the writing\u201d – meaning intending to be bound by his signature to the contact.\u00a0\u00a0 In this case, the appellate court concluded that the evidence did not show that the general partner printed his name at the end of his email with any intent to formalize an electronic transaction. \u00a0Therefore, the general partner never signed the settlement agreement under the California UETA and the investors\u2019 motion to enforce the settlement agreement \u2013 enforced by the trial court, was thrown out by the appellate court.\u00a0 Just as disappointing, since the settlement agreement was thrown out, the investors were not a prevailing party and had to bear their own legal fees.<\/p>\n

The lesson from this case, as emphasized by the court: when intending to have an exchange of emails serve as a binding electronic record that can be signed, add a signature block, and add a sentence to the contract that the agreement can be signed through the use of \u201ccommercially available electronic software which results in confirmed signatures delivered electronically to each of the parties.\u201d<\/p>\n

Which brings us back to the beginning \u2013 while it is important to incorporate the use of electronic signatures into our leases and other contracts, make sure that you do it in a comprehensive manner, with policies and procedures.\u00a0 There are numerous tech companies that can set up processes and security steps to confirm the authenticity and intent of a signature.\u00a0 The proper incorporation of these processes will ensure that an e-signature will be legally binding and will not fail to comply with your State\u2019s UETA and the Federal ESIGN legislation.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Manuel Fishman, Real Estate Attorney, Buchalter Nemer. Manuel says it’s time the CRE industry got on the electronic bandwagon with signatures.<\/p>\n","protected":false},"author":952,"featured_media":1004096951,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1004112694","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nAre Your Contracts Set Up for Electronic Signatures? - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/are-your-contracts-set-up-for-electronic-signatures\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Are Your Contracts Set Up for Electronic Signatures?\" \/>\n<meta property=\"og:description\" content=\"By Manuel Fishman, Real Estate Attorney, Buchalter Nemer. 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