background image
S P R I N G 2 0 1 5
29
contract communication to advance
electronically, as well. There is,
interestingly, a long history of contracting
electronically in the U.S. In fact, one of
the very first means of negotiating was
by morse code, another was via telegraph
and telegram, and, when phone lines
laced the country, it was only a matter
of time before fax lines, and faxed
signatures, were to follow.
9
It seemed uncontroversial to the
National Conference of Commissioners of
Uniform State Laws, then, to codify what
had been assumed ­ electronic signatures,
like faxed signatures, are a mark intended
to identify the sender and, thus, should
be given the same effect.
10
E-SIGN went
into effect in October 2000 to affirm
that contracts with electronic signatures
may not be denied legal effect.
11
The
substantive contract law applies to the
case, and the Act renders electronic
signatures as good as ink ones.
The Conference proposed the UETA
for states to enact, so that e-signature
laws on the state level would be uniform.
It works in unison with E-SIGN to bring
contract formation into the modern area
of transacting business by email. Perhaps
this is why 47 states adopted the proposed
law without significant changes, and the
three that did not ­ New York, Washington
and Illinois ­ adopted similar laws within
a few years of E-SIGN's enactment.
Internationally, the United Nations
Convention on Contracts for the
International Sale of Goods (CISG),
though eliminating the merchant's
unilateral contract rule and certain
parts of the "knockout" rule for contract
formation, is largely in accord and exists
between 83 countries, at least 56 of them
without any changes.
12
In all three of these Acts, the
traditional signature is replaced with
any mark, symbol or sound intended to
identify the sender.
13
Where terms are not in writing,
the court can glean the parties' intent,
objectively, from the parties' course of
dealings, course of conduct and course
of performance, as well as the term's
common usage in the parties' trade or
industry. What is not stated explicitly, the
court can find implicitly ­ and therein lies
the problem.
While an email signature may not
have been controversial, what has become
controversial is the sometimes slippery
slope to contract formation with a click of
"SEND."
Contract Formation: E-Mails,
Ambiguities and the Court
The swiftness with which contracts form
via email can come as a surprise to
parties who negotiate via email ­ even
more for companies that hold employees
out as having the authority to negotiate
but not necessarily "seal the deal."
And even more when they commit to an
agreement but disagree upon unstated, or
nonessential, terms. Here enters the court.
·
No Physical Writing? No Problem:
Alliance Laundry Systems, LLC v.
Thyssenkrupp Materials, NA.
14
In this
case, a buyer and a seller negotiated
for the sale of steel by email. When
the company failed to deliver the
product, the buyer sued. The seller
claimed no contract had been formed
because the parties had no physical
writing and did not agree to transact
business electronically, as they must
under the UETA. The court viewed the
parties' emails and concluded that,
as a "practical matter," if "the parties
reached an agreement electronically,
they will likely also show that
the parties agreed to conduct the
transaction by electronic means." The
UETA "authorizes parties `to agree'
to conduct transactions by email and
directs courts determining whether
parties have so agreed to consider
the `surrounding circumstances,
including the parties' conduct." Thus,
the court can view email negotiations
to determine whether parties, by
their conduct, agree to contract
electronically and, if so, what they
agreed to do.
·
Interpreting Emails: Dana Limited
v Grede Holdings
, CI 14-3963, Lucas
County Court of Common Pleas, Ohio.
In this automotive case, the buyer
and the seller disagreed whether