Your Email Signature IS a Signature - Washington’s Adoption of the Uniform Electronic Transactions Act (“UETA”)
/By: Tyler O’Brien and Whitny Norton
For those who have used E-signature or E-notary services, it comes as no surprise that the days of signing on the dotted line in bright blue ink are coming to an end. With Washington’s Adoption of the UETA in July 2020, parties entering into all kinds of agreements can do so from afar, with the use of electronic signatures. E-signatures can cut back on transaction, travel, and mailing costs. In addition, with the use of Blockchain technology, E-signatures can be easier to validate (i.e., more difficult to forge) than wet signatures.
I. Emails, Texts, and SnapChats Could Be Signatures
While E-signatures have very few risks when used intentionally, the UETA’s definition of E-signature is so expansive that many people are unknowingly using E-signatures in their everyday lives.
Under the UETA, an "Electronic signature" means an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record. WASH. REV. CODE § 1.80.020(10). "Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities, including without limitation blockchain and distributed ledger technology. WASH. REV. CODE § 1.80.020(10).
Based on this expansive definition, any electronic communication could constitute an E-signature. In theory, a person could “sign” a contract through practically any application on their phone, laptop, or gaming device.
II. The Law Is New to Washington, So Proceed with Caution
Before anyone decides to throw out their child’s PS5 and hightail it for the mountains, there is another provision of the UETA to consider. The UETA applies only to transactions between parties each of which have agreed to conduct transactions by electronic means. WASH. REV. CODE § 1.80.040(2). Whether the parties agree to conduct a transaction by electronic means is determined from the context and surrounding circumstances, including the parties' conduct. Id.
The bottom line is that –the average person – is not going to inadvertently bind themselves to a contract using an email, text, or direct message. The law takes into consideration that parties must intend to sign. However, business owners and employees need to be mindful of how they communicate, particularly via email. Consider the following scenarios:
1. A CEO for a general contractor receives an email from a subcontractor offering to perform work for $30 million. The CEO is busy at the moment, so she takes a quick look at the contract then replies, “looks good to me.”
Under the UETA, the emailed response could be considered an E-signature, which would make the entire contract enforceable. To determine whether the CEO entered into the contract, a court will look to the circumstances of the parties. Courts may ask questions like: have the parties contracted via email in the past; or do similar companies create agreements in this manner? Whether the contract is binding on the general contractor would depend on the answers to these questions.
2. A tenant sends an email to an employee at a property management company asking to get out of his lease 10 months early in exchange for his damage deposit. The employee replies saying “that’s fine” but later finds out that this is against company policy.
Many residential lease agreements contain what is called a “no oral amendments clause”. The problem here is the “amendment” is not oral. It is in writing.
The amendment was also arguably E-signed by the employee who replied with the email saying “that’s fine.” While case law is still developing, it seems that under the UETA, this response constitutes an E-signature.
III. How Do I Protect Myself from Inadvertent E-Signing? How Do I Enforce an Agreement that Was Signed via Email?
We can help. Piskel Yahne Kovarik, PLLC (“PYK”) is an experienced team of legal professionals offering, among other things, comprehensive legal representation to owners, property managers, and businesses. Available for general counsel, transactional, and litigation services, PYK primarily serves clients in the areas of commercial business litigation, construction litigation, real estate disputes, purchase and sales agreements, mergers and acquisitions, general corporate representation, financial workouts, and employment issues. Focused on building strong client relationships, we have earned our reputation as aggressive litigators and creative problem-solvers. Contact our legal team today to see how we can assist you in protecting your investment.