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Legal Issues Relating to Electronic Contracts

by | Sep 16, 2016 | Business Law


If you’re active in almost any industry in today’s marketplace, you have probably been involved in an electronic contract. If you haven’t been involved in an electronic contract, it’s likely that you have at least been approached about the possibility. Traditionally, the legal contract has always been in writing. The entire agreement was also traditionally memorialized by a signature on the hard document by the parties involved. This is what would be referred to as a “true paper contract.” The advent of the internet has revolutionized the way we communicate from marketing to personal relationships and that includes the contract. As such, electronic law has been adapted in order to support the enforceability of the “electronic” contract.

Are Electronic Contracts Legal?

In numerous instances, the United States courts have ruled that electronic contracts satisfy the legal written requirements for enforceability (i.e. contracts falling under Statute of Frauds). Electronic signatures have also been deemed sufficient as qualifying as a “legal” signature in numerous instances.

If Electronic Contracts are Legal, Are There Other Common Legal Issues?

Electronic law and electronic contract law specifically cover a wide range of detailed legal issues, but there are some fairly common items it can be beneficial to research. One common question is what actually qualifies as a signature. The complications arise due to the lack of a clearly defined answer. The general rule is that a digital signature satisfies the electronic contract law requirements when intent to be bound is evident and there is a security attribute in place to prove the signer was actually the correct person. For these intents and purposes, the electronic signature itself is less important than the actual intention of the person signing and the circumstances under which they signed (i.e. security, and the signer’s identity).

Legislation in place to control these issues is referred to as the Federal E-SIGN Legislation. It urges all states to adopt the Uniform Electronic Transactions Act (UETA) and welcome the electronic commerce facilitated through electronic contracts and formations. Technology is continuing to quickly evolve and the government is urging states to adopt policies that will encourage it as a means of establishing healthy economic forecasts for futures where e-signing and online contracts are even more common than they are today.

If you have questions regarding electronic contract law or you have a dispute that arose from an electronic contract, please get in touch with the experienced real estate and business law attorneys at The Law Office of the Law Office of Ernesto Aldover today.