Is My Electronic Signature Enforceable?
By Mark Ellinghouse, July 26, 2022
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As a transactional lawyer, I’ve always found a special delight when the occasion arises to use one of my favorite sayings: “The pen is mightier than the sword.” It provides a certain level of self-importance that transactional attorneys enjoy in relatively few circumstances. But in today’s electronic world, where ball point pens may soon join VHS tapes and 8-tracks in the trash can, we’ve had to reassess whether that saying still holds water. If no one handwrites agreements, or almost anything for that matter, where does the power go that was otherwise held by the prestigious pen? Or (perhaps) more importantly, how can parties execute transaction documents without having to resort to printing and physically signing their documents, and can this be done electronically? |
Luckily, California has a long history of acceptance of electronic signatures. Effective January 1, 2000, California adopted the Uniform Electronic Transactions Act (“UETA”). This statute, which largely tracks the federal equivalent E-Sign Act, provides that a “record or signature may not be denied legal effect or enforceability solely because it is in electronic form.”1 In other words, e-signatures are valid and binding in California, subject to certain procedural requirements and as long as the contract in question does not fall within one of a few exceptions. These procedural requirements include:
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1. The parties must have agreed to conduct the subject transaction electronically. This can be determined in writing or by the parties’ conduct, and is determined from the context and surrounding circumstances. This also includes the requirement that the process by which the contract is electronically signed does not inhibit the ability of the recipient to print or store the electronic record.
2. The signature must contain symbols or markings that constitute electronic signatures, such as an electronic sound, symbol, or process attached to or logically associated with an electronic record that is executed or adopted by a person with the intent to sign the electronic record.
3. The signature must be capable of attribution to the signor, which may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable. Again, the context and surrounding circumstances at the time of its creation, execution, or adoption are paramount to determining attribution.
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So long as these requirements are met, an electronic signature is binding and enforceable. |
Of course, there are some contracts which have been excluded from the statutory protections afforded by the UETA: (1) wills, codicils, testamentary trusts, (2) contracts under parts of the Uniform Commercial Code, and (3) laws that require specifically identifiable text or disclosures be signed and initialed involve contracts that do not fall under the protection of the Cal UETA.2 Additionally, the following specific transactions do not fall under Cal UETA protection: transactions regarding home solicitation contracts3, mobile home residency4, transfers of property subject to blanket encumbrance5, condominium transfers6, emergency repair or service contracts7, home equity sale contracts8, preparation of a consumer credit report for a lease applicant9, notice to a former tenant who left behind personal property10, mortgages (sale, default, publication of sale, disclosures, payment, mortgage foreclosure consultants)11, commercial and industrial common interest developments12, and conditional sale contracts in manufactured housing13. Most relevant to commercial real estate transactions, any documents which will be recorded, and therefore must be notarized, cannot be signed by electronic signature.
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While the circumstances of each transaction must be scrutinized to confirm applicability of the UETA and acceptance of an electronic signature, the widespread application of the UETA and its relatively narrow exceptions should provide comfort to contracting parties that an electronic signature will be valid and enforceable. Most electronic signature programs, such as DocuSign, fully satisfy the requirements of the UETA. For any specific questions regarding electronic signatures and their acceptance in a particular situation, please contact me. |
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1Civil Code § 1633.7(a).
2Civil Code § 1633.3(b).
3Bus. & Prof. Code § 17511.5; Civil Code § 1689.6.
4Civil Code § 798.14.
5Civil Code § 1133.
6Civil Code § 1134.
7Civil Code § 1689.13.
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8Civil Code § 1695.
9Civil Code § 1950.6.
10Civil Code § 1983.
11Civil Code §§ 2924b-2924c, 2924f, 2924i-2924j, 2937, 2945, 2954.5, 2963.
12Civil Code § 6500 et seq.
13Health & Safety Code, § 18035.5.
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Alison’s practice includes representing property owners in negotiating and drafting commercial lease documents, including leases, amendments, assignments, and termination agreements, as well as in all aspects of lease enforcement.
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Practice Group Spotlight - Corporate |
Weintraub Tobin provides comprehensive legal services for a considerable array of companies across a broad range of industries, including agribusiness, technology, manufacturing, financial institutions, real estate, and entertainment.
Our Corporate attorneys work with our Real Estate attorneys to help clients navigate and manage various aspects of their business, including formation, governance and transitions.
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Meet the Author: Mark Ellinghouse |
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Mark Ellinghouse 916-558-6091
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I assist clients with commercial real estate matters, including buying, selling, leasing, and management of real property. I also help clients structure investments in real estate, handling projects relating to financing, investment, and joint ventures.
In addition, I regularly advise clients on general corporate matters, from formation and management to operating issues to third party contracts for licensing, research and development. I have a diverse background, with experience in private practice and in-house counsel, on both litigation and transactional cases, and in non-legal roles. I like working with sophisticated clients who demand top notch legal advice to help them manage their legal issues in an efficient and effective manner.
I look forward to working and/or connecting with you soon.
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