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September 29, 2020 Practice Points

Using Electronic Contracts and Signatures While Social Distancing

The Uniform Electronic Transaction Act can cut through the social-distancing barriers by authorizing electronic contracts and signatures.

By Matthew R. Slaughter

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Due to the COVID-19 outbreak, much of the United States has adapted to working from home. This drastic change has itself forced many other adaptations, including how attorneys and their clients approach business transactions. The Uniform Electronic Transaction Act (UETA), which has been adopted in every state except Illinois and New York, can cut through the social-distancing barriers by authorizing electronic contracts and signatures.

In Louisiana, for instance, the UETA was adopted into law in 2001 as the Louisiana Uniform Electronic Transactions Act. The statute provides that:

  • A record or signature may not be denied legal effect or enforceability solely because it is in electronic form.
  • A contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation.
  • If a law requires a record to be in writing, an electronic record satisfies the law.
  • If a law requires a signature, an electronic signature satisfies the law.

See La. Rev. Stat. §§9:2601, et seq.; see also 15 U.S.C. §§ 7001, et seq. (“Electronic Signatures in Global and National Commerce Act” is the federal equivalent).

However, this law only applies when both parties agree “to conduct transactions by electronic means.” As part of the negotiations, a party should make it clear that they intend to conduct business electronically and ask for a reciprocal acknowledgment from the other party. Once this method has been agreed to, parties are free to form electronic contracts even through email. “Where a writing and/or a signature is required to form a contract, an email will satisfy such requirement.” See Preston Law Firm, L.L.C. v. Mariner Health Care Mgmt. Co., 622 F.3d 384, 390 (5th Cir. 2010) (quoting Klebanoff v. Haberle, 978 So. 2d 598, 602 (La. App. 2d Cir. 2008)). In fact, some courts have held that a person’s name typed at the end of an email constitutes a signature sufficient to bind the party under various states’ versions of the UETA. See Williamson v. Bank of N.Y. Mellon, 947 F. Supp. 2d 704, 710 (N.D. Tex. 2013).

Even if parties agree to conduct business transactions electronically, some documents are excluded from this law. The UETA states that it does not apply to certain family matters, including wills, trusts, adoptions, and divorces. It also does not apply to any notices involving the cancellation of utilities, evictions, termination of health insurance benefits, or other specialized notices. See La. Rev. Stat. § 9:2603(B). Despite these exemptions, most contracts that a business creates or executes can be done electronically. For instance, Louisiana allows lawyers to sign pleadings or other documents in Louisiana state courts. La. Code. Civ. art 253(E) states “[t]he clerk shall not refuse to accept for filing any pleading or other document signed by electronic signature, as defined by R. S. 9602, and executed in connection with court proceedings, solely on the ground that it was signed by electronic signature.” Although, attorneys will need to look to local rules or other laws governing the subject matter of those documents because the comment to La. Code. Civ. P. art. 253 states that “nothing in this provision is intended to abrogate any specific legislation requiring that certain documents be signed by other than electronic means.”

Given that most Americans reside in a jurisdiction where the UETA has been adopted, electronic contracts and signatures can be an integral part of the world economy during this time of social distancing. Attorneys should thus be mindful of the possibilities that their respective state laws offer their clients.

Matthew R. Slaughter serves as an associate with Phelps Dunbar in New Orleans, Louisiana. 

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