The Legal Corner: Electronic Contracts and Signatures

Even our security alarm contracts are moving forward into the digital age. Various electronic signature platforms (like DocuSign, for example) permit us to download our contract forms into an electronic platform and then send those contracts electronically to our customers and obtain electronic signatures from our customers. However, are these electronic signatures valid and enforceable? The short answer is YES, as long as you adhere to a few basic rules. Here is the analysis and our recommendations:

For a court of law to enforce a contract, there must be a bargain in which there is a manifestation of agreement between contracting parties generally consisting of an offer by one and the acceptance of it by the other.

Our contract laws permit freedom of contract. That principle rests on the idea that it is in the public interest to allow parties broad powers to govern their business affairs, and allocate their risks, through legally enforceable contracts.

In this day and age, electronic contracts (also known as “clickwrap agreements”) are commonly respected and enforced by our courts based on these basic principles of freedom of contract. Our courts have found that the formation of contracts over the internet have not fundamentally changed basic contract law or the requirements for enforceability.

However, most courts do require customers to click an “I agree” or “I accept” box and/or electronically sign by typing the customer’s name or with a stylus pen on the electronic contract as a requirement for enforceability. Our courts hold that this clicking or signing shows the manifestation of the customer’s agreement and intent to be bound to the terms and conditions covered by the electronic contract.

So YES, you may use electronic contracts and obtain electronic signatures from your customers with confidence that our courts will generally enforce them, so long as you use an electronic signature platform which requires the customer to click an “I agree” or “I accept” box and/or electronically sign the contract by typing the customer’s name or with a stylus pen.

MICHAEL J. REVNESS, ESQ., is the founder of Alarmlegal.com and a founding partner at the law firm of KURTZ & REVNESS, P.C. Please contact me at mrevness@kandrlaw.com (or 610-688-2855), or visit us at www.AlarmLegal.com, if I can be of assistance with the drafting security alarm contracts, purchase or sale of security alarm accounts or other related security industry legal services.

HAPPY NEW YEAR!

This article is for information purposes only and does not constitute, and should not be relied upon as, legal advice.