Generally, UETA and E-SIGN provide that a signature may not be denied legal effect solely because it is in electronic form. UETA § 7; E-SIGN, 15 USCA § 7001(a). When the parties to a business contract subject to one of these statutes agree to use an electronic signature, the electronic signature ordinarily will have legal effect. The agreement of the parties can be implicit and can be based on all the circumstances broadly construed. UETA § 5(b). An opinion, therefore, that a business agreement has been duly executed can be based on the parties’ conduct. Under UETA, the exchange of electronically-signed documents manifests the requisite agreement of the parties to use electronic signatures. Electronic signatures include signatures in emails, PDFs, and faxes and signatures provided by processes offered by commercial firms, such as DocuSign and Adobe Sign, so long as they are affixed to or associated with the relevant agreement with an intent to sign by the persons providing them.
Except for agreements governed by Articles 2 (sales of goods) and 2A (leases of goods) of the Uniform Commercial Code (UCC), UETA and E-SIGN do not apply to agreements to the extent the agreements are governed by the UCC. The UCC governs only certain aspects of transactions within its scope, leaving the remaining issues to be governed by other law. The definition of “sign” in Article 1 and the definition of “authenticate” in Article 9 provide substantially the same rules as UETA and E-SIGN for the use of electronic signatures. Thus, for example, in cases where an agreement that bears an electronic signature does not qualify as a “negotiable instrument” for UCC purposes because it is not a “writing,” execution by electronic signature pursuant to UETA or E-SIGN (or other consistent state law) is still sufficient to create an enforceable agreement as a matter of contract law.
Agreements sometimes require that they and any amendments be signed manually. When giving a duly executed opinion, therefore, on an agreement or amendment that has been signed electronically, the opinion giver must confirm that the agreement does not prohibit electronic signatures.
As a matter of customary practice, duly executed opinions can be based on an assumption, which may be unstated, that all signatures are genuine. That assumption applies to electronic as well as manual signatures.
The legal effect of the execution of a business agreement by a legal entity could also depend on the statute under which the entity was formed and the provisions in the entity’s constituent documents relating to its internal actions. For example, the entity statutes of some states provide rules for the electronic execution of documents needed to create the entity and written consents authorizing the signing of agreements on its behalf. See, e.g., Delaware Limited Liability Company Act § 18–113; Delaware General Corporation Law §§ 141(f) and 228(d)(1).
