Topic: Contracts, Business
Time Investment: 3 Minutes
Suggested Product: All-in-One Contract Bundles
As more online contract delivery and electronic signature services are developed, so it seems more questions about what constitutes a legally signed contract arise.
In particular, what is the legal status of check boxes on electronic copies of contracts.
Are they sufficient?
Sufficient for what?
Sufficient to provide evidence that at least one of the parties has read and agreed to the terms of the contract. The unasked question is “do checkboxes form part of a valid contract”?
Another way might be to ask “Does a web-based “”check’ box, indicating that they have read and agree to the terms suffice?
We need to start with some basic questions: are web based contracts are sufficient? Is a hard copy of a contract with a signature is required in case of litigation? Do web check boxes have the same status as an electronic signature?
Let us first consider the validity of electronic signatures:
Federal Law states that electronic signatures are legally binding. There are two relevant pieces of legislation: Electronic Signatures in Global and National Commerce Act (ESIGN, 2000) and the Uniform Electronic Transactions Act (UETA, 1999). Both ESIGN and UETA make it clear that electronic records and signatures carry the same weight and legal effect as paper documents with handwritten signatures. Specifically, a document or signature cannot be denied legal effect or enforceability solely because it is in electronic form.
Is a hard copy of a contract with a signature is needed for a valid contract to exist?
The short answer is No. Electronic copies of a contract and a physical paper copy of a contract are now considered to be much the same in the eyes of the law as established by ESIGN and UETA. At the same time, just as you are often unable to prove that an individual signed a hardcopy of a contract outside of your presence, you have the same potential issue with electronic copies of contracts. Actually, electronic copies of contracts can sometimes offer an avenue of proof that does not exist with physical copies, by virtue of evidence like IP addresses and encrypted signatures that require multi-factor authentication.
Because contracts are written in order to convey intent and outline the responsibilities of the parties who are signatories, a contract is considered to be legally valid when you can prove intent. This is why communications surrounding a contract are important – even as we want to make sure the contract represents the whole agreement – because it helps to show intent of the parties. However, if you have a signed electronic contract and have no other supporting records of communications with that party, it can be more difficult to prove that intent to enter into a contract. By keeping records of your communications around a contract and financial records detailing any payments, you can be more reassured of your capacity to demonstrate intent should you need to do so.
What is perhaps helpful to note that it is extremely rare for a party to claim that they didn’t sign a contract at all. Claims are usually in relation to a breach of a contract. This is because you cannot claim a breach of a contract unless a contract exists and signing the contract is one way to show the necessary intent for that contractual relationship to exist.
A further question arises: is a checkbox considered the same as a signature?
In short, no, but they are not completely without use. It may be more helpful, should you need to litigate your contract to have a space for a client or signatory to initial the specific clauses you might otherwise use checkboxes for. Initials are arguably more helpful because you can at least hope to link the signatory to their own initials, where a checkbox has less identification inherently.
A simple web checkbox might be useful for a specific question relating to a package ordered or a choice to be made, but for an acknowledgement it is better to avoid the question of whether web checkboxes are evidence of agreement to clauses in the contract and use initialling. Requiring every initialling box or checkbox to be filled out before a contract can be submitted is good business practice.
So what if a client doesn’t want to initial that clause or tick that checkbox? In short, when a client wants to comment or negotiate clauses in your agreement, it is best not to do this is on a copy of the contract. It is still important that the final agreement represent the whole agreement, but modifying a contract on the whims of a client is rarely a good way forward.
One contractual clause that photographers often find clients have questions about is the model release.
For example, a client may email before submitting the form saying they aren’t comfortable with the model release, but are concerned that they can’t submit the form without checking the box.
You might be tempted to a) ask them to check the box anyway and submit assuring them that you will not enforce the clause, b) allow them to print out the contract and redact that clause before signing it. c) stick to your position requiring agreement to the clause regardless of you likely losing a client.
None of these is necessarily the best way forward unless you are willing to weigh the consequences and the potential damage to your business and its relationships.
Some alternative ways to handle this situation include: a) add additional boxes, yes, no and yes, with additional comments/notes, that can then be co-signed by you once you have an agreement – this kind of edit should be done in consultation with your attorney; b) negotiate potential clause changes by email, have the contract edited and reviewed by your attorney and then signed only after there has been an agreement reached. c) engage in some client education about your contract and why you include the clauses that you do.
In any case, the goal is to ensure that the contract forms the entire agreement and demonstrates the intent of the parties.