Since March 2000, New York has allowed the use of electronic signatures on electronic records in place of actual signatures. The New York Electronic Signatures and Records Act (ESRA) applies to anyone using or accepting electronic records and signatures in New York State, including persons and entities in the public and private sectors. An electronic signature can take several different forms, and can be as simple as typing your name in an email.
The ESRA applies to a broad range of documents, but there are exceptions as well as several caveats that anyone relying on an electronic signature should know. As an example, the law does not allow electronic signatures for certain types of documents, including wills, trusts, do not resuscitate orders, powers of attorney and health care proxies.
One problem with relying on electronic signatures is determining what is an “electronic record” under ESRA. The ESRA defines an electronic record as “information created, stored, generated, received or communicated by electronic means in a form that person can perceive, and which can be accurately reproduced.”
A recent decision of the New York Appellate Division Third Department addressed this issue, with an unexpected outcome. In Solartech Renewables, LLC v. Vitti, the Defendant sent an email with an attachment that consisted of a letter containing a counteroffer in response to a contract proposal. The Defendant had typed her name at the bottom of the letter attachment. The Plaintiff physically signed the letter attachment to accept the counteroffer and sent it back. When the Defendant did not comply with the terms of the counteroffer, Plaintiff sued to enforce its terms. Defendant raised as a defense the “statute of frauds,” which requires that certain types of contracts (in this case, one transferring an interest in real property), be memorialized in a written agreement signed by the party granting the property interest. Defendant argued her name typed at the bottom of the letter attached to an email did not constitute her “signature.”
The Appellate Division agreed and dismissed the case against the Defendant. It found that the letter attached to the email did not constitute an “electronic record” and therefore the typed name on the letter attachment did not satisfy the statute of frauds. However, the Court noted that the result may have been different if the counteroffer was in the body of the email (and not in a separate attachment) and the Defendant had typed her name in the email. In addition, the result might have been different if the Defendant had subsequently confirmed acceptance of the counteroffer in an email. In those situations, the Defendant would have been found to have “signed” the contract.
The Court’s decision illustrates that it can be dangerous to rely on emails and electronic signatures. The best approach is to consult with experienced counsel before relying on email (or email attachments) as the sole basis for a contract.
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