E-Mails: When Does Pressing "Send" Mean You've Signed on the Dotted Line?

04 June 2008 Publication
Author(s): Michael A. Okaty Taylor C. Pancake

Legal News Alert: Transactional & Securities

Increasingly, it is possible for e-mail correspondence to have unintended results. Courts have recently ruled that a sender’s typed name appearing in an e-mail can be evidence of an intent to modify a written agreement, even if the underlying contract specifically requires modifications to be in writing and signed by all parties. Accordingly, the sender of an e-mail should take care to ensure that such exchanges do not inadvertently create a binding obligation or modify an existing agreement.

In April 2008, the New York State Supreme Court, Appellate Division, First Department held in Stevens v. Publicis, S.A. (2008 N.Y. Slip Op. 02880) that in certain instances, a written agreement could be amended by e-mail correspondence. Even though the contract specifically required modifications to be in writing and signed by all parties, the court in Stevens interpreted the typed name of the sender at the foot of an e-mail message to be sufficient to consider the e-mail to have been “signed” by the sender. The court reasoned that the typed name indicated the sender’s intent to authenticate the contents of the message. This decision, though not binding outside of New York, should cause the sender of an e-mail to consider the potential unintended consequences of the contents of each message.

While the results may be somewhat surprising, note that the Stevens decision is consistent with both federal and state statutory law. The federal Electronic Signatures in Global and National Commerce Act, enacted in 2000, ensures the validity of signatures and contracts, notwithstanding that an electronic signature or an electronic record was used in its formation. Similarly, the Uniform Electronic Transactions Act, approved by the National Conference of Commissioners on Uniform State Laws in 1999 and adopted by most states, provides that where a law requires a record to be in writing or where a law requires a signature, an electronic record or an electronic signature satisfies the requirement.

What Should You Do?
In light of the potential results discussed above, one should consider related precautions. For example, when conducting negotiations electronically, consider adding a disclaimer to all communications that the transmissions are intended only as negotiations and that the sender does not intend to be bound by any terms unless they are included in a manually signed paper document. Additionally, consider including a disclaimer in all e-mail signature blocks stating that the electronic signature should not be considered evidence of an intent to be bound to any agreement. Finally, consider ensuring that the language contained in all existing and future agreements explicitly requires a manually signed paper consent of each party for any amendments.

Legal News Alert is part of our ongoing commitment to providing legal insight to our transactional & securities industry clients and colleagues.

If you have any questions about this alert or would like to discuss this topic further, please contact your Foley attorney or the following individuals: 

Michael A. Okaty
Orlando, Florida

Taylor C. Pancake
Orlando, Florida

Christopher S. Linde
Orlando, Florida

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