The Click of Death (The Brave New World of E-Signatures)

Business Law Notes

Summer 2008 Edition

 

CONGRATULATIONS TO OUR CLIENTS!!

Barry Doyle and Barry’s Cafe won the National Restaurant Association’s “Good Neighbor Award” for 2008. He will represent North Carolina in Washington, D.C. in September at the national awards ceremony. Barry’s Café, located in the Swift Creek Shopping Center, is renowned not only for its food but also for its unselfish efforts to feed fire fighters and emergency personnel. His emergency food service is the subject of legends. Barry Doyle is truly one of this world’s great guys!

Wendy Coulter has been named a 2008 Impact Women Business Owner by Business Leader Magazine. The awards are presented to recognize the outstanding leadership of the selected women not only in their professional fields but in their communities as well. Wendy is a very talented lady known also for her community service. For more information regarding Hummingbird Creative Group, visit their Web site at www.humingbird-creative.com.

THE CLICK OF DEATH (The Brave New World of E-Signatures)

By M. Blen Gee Jr.

Most people are familiar with online purchases with credit cards, Paypal and similar methods of payment. Increasingly, commercial contracts are being entered into entirely electronically. There is a tendency to think of such electronic transactions as being limited to small matters with relatively little risk, especially if you can dispute the particular charge through your credit card company. However, under the current state, federal and international framework, almost any contractual relationship can be entirely electronic and “signed” by the click of a button. For example, Dell Computers’ financial arm leases computers to businesses based entirely upon an electronic document with an electronic signature.

Any commercial electronic contract must be examined with the same care as a written contract. The boilerplate in fine print is just as important for an electronic contract as it is for a paper one. Ask the same questions: Am I required to arbitrate or sue in another jurisdiction? Are the promises that the salesman made written in the document? Does the contract automatically renew unless I give several months’ advanced notice? Are the default provisions unfair? Will I be required to pay attorney’s fees and costs? Is there an unreasonably high interest rate on default? Are disclaimers or indemnity provisions overbroad?

Electronic commercial contracts should not be delegated to lower level personnel without direct supervision. For example, many vendors will attempt to require a personal guaranty of a corporate obligation. An unsupervised employee might fill in the name of the company’s president and click “accept”! You will have the burden of proving that the employee was not authorized to electronically “sign” on behalf of the personal guarantor.

If mistakes are made, notify the other party promptly and take reasonable actions to correct the error. Return any goods or money received. This is especially important where orders are automatically processed without human intervention. The law is a little more forgiving, especially in North Carolina, for mistakes in this circumstance.

 

About our Author:

M. Blen Gee, Jr. is an honors graduate of the University of North Carolina School of Law. His areas of concentration include business and corporate law, including sales of businesses; business litigation, including arbitration and mediation; franchise law; automobile dealer law; and insurance company insolvency. Mr. Gee has earned the highest peer-review rating for professional excellence and ethical standards by the national publication Martindale Hubbell.

DISCLAIMER: Johnson, Hearn, Vinegar & Gee, PLLC, provides this newsletter for general information only. The materials contained herein may not reflect the most current legal developments. Such material does not constitute legal advice, and no person should act or refrain from acting on the basis of any information contained In this newsletter without seeking appropriate legal or other professional advice on their particular circumstances. Johnson, Hearn, Vinegar & Gee, PLLC and all contributing authors expressly disclaim all liability to any person with respect to the contents of this newsletter, and with respect to any act or failure to act made in reliance on any material contained herein. Distribution of this newsletter does not create or constitute an attorney-client relationship between the firm and any reader or user of such information.

Johnson, Hearn, Vinegar & Gee, PLLC
434 S. Fayetteville Street #1800, Raleigh, NC 27602, P: 919.743.2200, F: 919.743.2201, Email
Copyright © All Rights Reserved.