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Q: Are faxed signatures on contracts binding? ( Answered 5 out of 5 stars,   1 Comment )
Question  
Subject: Are faxed signatures on contracts binding?
Category: Business and Money > Small Businesses
Asked by: baruchhashem-ga
List Price: $5.00
Posted: 30 Aug 2004 09:52 PDT
Expires: 29 Sep 2004 09:52 PDT
Question ID: 394580
If I fax my contract/arbitration agreement and disclaimer to customers
for them to sign, which they sign and fax back, is their faxed
signature legally binding without an orginal as a backup? I'm located
in California and my business is researching health treatments for my
clients. I'm a DBA now but will soon incorporate, so it would be
helpful to know if it's legally
binding for one and not for the other.
Answer  
Subject: Re: Are faxed signatures on contracts binding?
Answered By: hummer-ga on 30 Aug 2004 11:35 PDT
Rated:5 out of 5 stars
 
Hi baruchhashem,

It is probably safe for you to assume that your faxed contracts are
legally binding, but consider including a paragraph in your contract
stating that intention.

>>>Legislation

FindLaw: Electronic Signature Legislation:
b. Signature Requirement
"Generally, a signature is "any symbol executed or adopted by a party
with present intention to authenticate a writing."   [47]     Thus,
the key requirement is not ink on paper, but rather the presence of a
"symbol" coupled with the party's "intention."

The courts have found many symbols on a variety of media to be
signatures: names on telegrams,   [48]     names on telexes,   [49]   
 typewritten names,   [50]     names on Western Union Mailgrams,  
[51]     and even names on letterhead.   [52]     Faxed signatures
have also been assumed to constitute effective signatures.   [53]    
Thus, any symbol or code on an electronic record that is intended as a
signature should also meet the requirement. Even a name typed at the
end of an e-mail should qualify as a signature,   [54]     so long as
it was created with the proper intent."

"Perhaps the most common requirements imposed by this second category
of statutes derive from a decision of the U.S. Comptroller General
that was first included in the California legislation enacted in late
1995.   [61]     Under statutes adopting this approach, an electronic
signature is legally effective as a signature only if it is: (1)
unique to the person using it; (2) capable of verification; (3) under
the sole control of the person using it; and (4) linked to the data in
such a manner that if the data is changed, the signature is
invalidated..."
http://profs.lp.findlaw.com/signatures/signature_4.html

ELECTRONIC TRANSACTIONS ACT (UETA):
" SECTION 7. LEGAL RECOGNITION OF ELECTRONIC RECORDS, ELECTRONIC
SIGNATURES, AND ELECTRONIC CONTRACTS.
(a) A record or signature may not be denied legal effect or
enforceability solely because it is in electronic form.
(b) A contract may not be denied legal effect or enforceability solely
because an electronic record was used in its formation.
(c) If a law requires a record to be in writing, an electronic record
satisfies the law.
(d) If a law requires a signature, an electronic signature satisfies the law."
http://www.law.upenn.edu/bll/ulc/fnact99/1990s/ueta99.htm

>>>California

California  enacted the ELECTRONIC TRANSACTIONS ACT (UETA) on
September 16, 1999 with amendments.

California Senate Bill 820:
http://www.leginfo.ca.gov/pub/99-00/bill/sen/sb_0801-0850/sb_820_bill_19990916_chaptered.html

>>>Paragraph of Intent

USING A FAX BINDING PARAGRAPH IN LEGAL DOCUMENTS
By Patrick H. Stiehm
"The use of fax or facsimile machines in business to exchange
documents, is now so common and so pervasive that often the most
important documents, including contracts involving substantial amounts
of money are exchange and relied on every day to "document" everything
from the most simple to the most complex business transactions.
Reliance on this method of "signing" documents now so common, is often
done without any statutory or case law authorizing its use or
governing its effect on contracts signed this way. Yet often
substantial amounts of money are involved in such transactions.

As a matter of simple prudence, it is suggested that the intention to
be bound by faxed documents and the fax signatures on those documents,
should be clearly expressed in the documents themselves. A preferred
practice is to include that expression of intent to be in a paragraph
by itself, immediately above where the signing party of parties are to
execute the document and in bold letter, so as to call attention to
the express intent to be bound by the fax or facsimile signature on
the document. It would be foolish to attempt to create a generic, one
size fits all fax binding paragraph. Such a paragraph is best tailored
or crafted for each transaction and document where it will be used.
Here for example are a few sample paragraphs we have used over the
years..."
http://firms.findlaw.com/pstiehm/memo2.htm

Contracting by Fax:
"Can You Bind The Other Party to a Contract if All You Have is Their
Faxed Signature?
If possible, having a good ole-fashioned signature on a document is
always preferable. Fortunately, the law generally recognizes that
business is not always done that way today.
"The key word in the preceding sentence is ?likely.? Whenever
possible, get a penned signature to form a contract. If the practical
reality of doing business requires that you accept a faxed signature,
sleep well knowing that it should suffice."
http://www.ecomputerlaw.com/articles/1996/contracting_by_fax.htm

I hope this is what you were hoping for. If not, or if you have any
questions, please post a clarification request before closing/rating
my answer and I'll be happy to reply. Please read the "Important
Disclaimer" at the bottom of this page, advising that Google answers
are provided for general information an are not intended to be a
substitute for legal advice.

Thank you,
hummer

Google Search Terms Used:
"faxed signature" legal california
baruchhashem-ga rated this answer:5 out of 5 stars

Comments  
Subject: Re: Are faxed signatures on contracts binding?
From: benc007-ga on 24 Sep 2004 15:55 PDT
 
Hi baruchhashem,

Is the use of your DBA in contracts legally binding???

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