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Contract signed by email: The parties replied “Agreed” to my email with the final draft attached

A client and its customer just “signed” a contract by having executives of each company do an “Agreed” Reply to All, in response to my email transmitting the final agreed contract as an attachment.

Step 1: The customer’s in-house lawyer and I agreed to a final draft of the contract. I saved the final draft as a PDF.

Step 2: With the prior concurrence of the customer’s in-house lawyer, I sent the following email to the pre-designated executives of each company; let’s call them “Alice” and “Bob.” Of course I copied the customer’s lawyer, “Carol,” as well as other relevant people involved in the negotiation.

Here’s the text of my email, lightly edited:

[Subject line: SIGNATURE REQUEST: [Contract name]]

ALICE and BOB: Per Carol’s email (below), please do a Reply to All with the text “Agreed” to confirm that [my client] and [customer] have agreed to the attached [contract], reflecting agreed revisions.

CAROL: As previously discussed by email, the attachment is a PDF of the redline that you sent on Sept. XX, with no other changes, and the redlines left in place so that [my client] can see the agreed variations from its standard agreement form.

Thanks,

[my signature block]

(Emphasis added.)

Step 3: Alice and Bob promptly emailed back “Agreed.” Under the law pretty much everywhere in the U.S. (see below), this created a binding contract — and the parties didn’t have to go to the trouble of wet-ink signature, nor did they have to use a document-signature service.

Pro tip: Note that in my email above, I specifically confirmed that I’d made no other changes to the draft that the customer’s lawyer and I had agreed on — this small professional courtesy helps speed up the signature process.

Concerning the enforceability of contracts-by-email, see generally, e.g.,  APB Realty, Inc. v. Georgia-Pacific LLC, 889 F.3d 26 (1st Cir. 2018) (vacating dismissal; complaint stated a claim for breach of contract formed by email);  Preston Law Firm v. Mariner Health Care Management, 622 F.3d 384 (5th Cir. 2010) (reversing district court; emails created binding compromise); J.D. Fields & Co., Inc. v. Shoring Engineers, 391 F. Supp. 3d 698, 703-04 (S.D. Tex. 2019) (denying motion to dismiss for lack of personal jurisdiction; emails (including one with a signed sale quotation) established a contract for sale of steel piping that incorporated general terms & conditions containing enforceable mandatory forum-selection clause); Kolchins v. Evolution Markets, Inc., 31 N.Y.3d 100, 107-08, 96 N.E.3d 784, 73 N.Y.S.3d 519, text accompanying n.5 (2018) (upholding denial of motion to dismiss a breach of contract claim because email exchange was sufficient); Newmark & Co. Real Estate Inc. v. 2615 E. 17 St. Realty LLC, 80 A.D.3d 476,  477-78, 914 N.Y.S.2d 162 (N.Y. App. 2011) (email agreement “constituted a meeting of the minds”).

U.S. law explicitly law supports the use of electronic signatures, which are becoming increasingly popular in business:

  • See generally the federal Electronic Signatures in Global and National Commerce Act (E-SIGN Act), 15 U.S.C. § 7001 et seq., which provides in part (subject to certain stated exceptions) that, for transactions “in or affecting interstate or foreign commerce,” electronic contracts and electronic signatures may not be denied legal effect solely because they are in electronic form.
  • At the U.S. state level, 47 states, the District of Columbia, and Puerto Rico, and the U.S. Virgin Islands have adopted the Uniform Electronic Transactions Act (UETA).
  • The remaining three states — Illinois, New York, and Washington — have adopted their own statutes validating electronic signatures.

Electronic signatures are now common in England and Wales as well. See generally Law Commission, Electronic Execution of Documents (2019), at https://perma.cc/UCQ7-U94M.

Caution: Under California law, a car dealer apparently must still obtain a manual contract signature from a car buyer. See Cal. Civ. Code § 1633.3(c) (various carve-outs from authorization of electronic signatures) and Cal. Veh. Code § 11736(a) (requiring signed agreement with car-buying consumer).

(The above citations are from a book manuscript in progress.)