The most important time you sign your name is probably when you record your agreement to a contract. This is a process with a long tradition and, until recently, little about it changed. For centuries, the only improvement was the development of better pens. But now, technology has added a number of wrinkles.
I Accept and I Agree buttons litter the Internet, along with Terms and Conditions links that take you to barely discernible fine print. If you have actually read these contracts, you may wonder about some of the conditions: “Is that legal?” and “Can they really do that?” Well, it depends. Technology is tricky, and so is the law. Is signing your name becoming too quick and easy? You be the judge.
Please note: I am not a lawyer! I’ve done my best to research these issues, but that is no substitute for consulting a lawyer.
1: Signing with a pen and faxing
These days, the traditional way to sign a contract is to print it out, sign it with a pen, and fax it back to the originator — straightforward and legally enforceable. It does, however, require access to a fax machine or program.
2: Signing with a pen, scanning, and emailing as an image file
Only slightly different is relying on email rather than fax to return the contract. To prevent easy alteration of the signed contract, it must be turned into an image file (PDF, JPEG, etc.) before sending.
3: Signing with a rubber stamp, or an image of your signature
If a person can’t write a signature — or has too many signatures to write, like a corporate CEO — an image of the signature can be used instead, provided that it is “previously authorized” and the signer had the intent to sign. Proof of the signer’s intent becomes increasingly important as methods change.
4: Signing with a signature pad or handheld device
Frankly, “signature pad” is a misnomer. It’s next to impossible to duplicate your written signature because a) the stylus is blunter than a pen; b) the writing surface provides no friction whatsoever; c) there’s no resting place for your wrist; and d) you’re likely to be signing on an angled or unstable surface, in poor light. It’s like trying to sign a block of ice. Most people give up the struggle and simply make some sort of mark.
Signature pads are primarily used for simple assent (deliveries, credit card purchases, pharmacy verifications) rather than for signing a contract, which — given the difficulty of proving it’s actually your signature — is probably a good thing. Sometimes, though, one of these pads is used to produce a “signature” that is later relied on to verify a written signature (e.g., a Georgia driver’s license). That can be a problem.
5: Signing with an electronic signature
In 2000, the U.S. Congress passed the Electronic Signatures in Global and National Commerce Act (ESIGN), making electronic signatures legal and binding, paper not required. An electronic signature binds the signer to the contract just like a written signature, but it requires only mutual acceptance, the form of which is not specified. For example, an exchange of emails saying “I accept” the terms of the contract would be sufficient. Don’t confuse electronic signatures with digital signatures, which are intended to both signify assent AND to verify the signer’s identity and/or encrypt the document.
Since the form of an electronic signature is unspecified, it would probably be legal to put a “John Hancock,” “John Henry,” nickname, moniker, or mark on a contract, as long as “intended as signature” is included. It’s not recommended, though — you might run into a judge with no sense of humor. Kids, don’t try this at work.
6: Signing with document management software
Electronic signing offers the opportunity to use software to manage the entire process of negotiating, agreeing, signing a contract, providing copies, and archiving, at a considerable savings of time and effort. This software offers three ways of signing: the usual scanned image, “drawing” your signature, and a new one — writing your signature in one of several included fonts (more than one script font). This has the advantage of being human-readable (often more so than an actual signature) and passing the legal requirement of “intended as signature.”
For the purpose of signing an existing PDF, Adobe Reader (free) works nicely. However, it can’t be used to add a signature field to a document. Two popular programs that provide that ability are Adobe’s EchoSign (free limited version) and DocuSign (free trial). Both are cloud-based, let you create signature fields on many kinds of documents, and enable signing from many types of devices. Note that these cloud-based document managers alter the usual sequence of events when signing a contract. Don’t sign thinking you will have a chance to review the contract before it is sent. Once you sign, you’re committed.
7: Signing without signing
Not all enforceable contracts need to be signed. Oral contracts and handshake agreements may also be enforceable. Modern technology has added new kinds of contracts that don’t need to be signed to apply to you. We’ve progressed — if you can call it that — from contracts designed not to be read (voluminous, obscure, and barely readable) to contracts designed not to be noticed at all. They come in three flavors: shrink-wrap, click-wrap, and browse-wrap.
These contracts vary substantially, and some have been found to be unenforceable by the courts. The most common problems center on what is adequate notification of the terms of the contract — and any changes to it — and what constitutes acceptance of those terms by a purchaser or user.
8: Signing by opening a shrink-wrapped package
Contracts stating that breaking the seal on an installation CD envelope constitutes acceptance have generally been enforced, assuming you can read the contract terms before breaking the seal. Courts have tended to frown on contracts stating that just opening the package constitutes acceptance of the terms — especially if contract terms are not visible before opening.
9: Signing by clicking I Agree on a Web page
Click-wrap assent is generally enforceable, but the validity of the contract also relies on the Web page providing sufficient notification of the contract and its terms. An unremarkable link at the bottom of Web pages is usually not enough (Hines v. Overstock.com, Inc. ; In re Zappos.com, Inc., Customer Data Security Breach Litigation ). And as you might imagine, trying to be deceptive about the contract or its details weighs heavily against enforcement (Lee v. Intelius, Inc. [2013).
The ability to easily change or update Web pages, as opposed to paper or electronic image files, has tempted some companies to include language such as “We reserve the right to change this Site and these terms and conditions at any time,” without direct notification of or assent by customers. Courts have tended to find these contracts “illusory” (in other words, not really contracts) and therefore unenforceable (Douglas v. U.S. District Court (2007); Zappos). The same requirements for notification apply to subsequent changes to the contract. It is not sufficient to simply post on the Web site any changes to the contract. Users must be notified about changes and assent to them separately. Turning notification and assent into a “gatekeeper” — making action necessary before proceeding — is generally sufficient.
One thing that courts’ enforcement of click-wrap assent fails to take into account is the degree to which we have all been trained in the habit of “click to make it go away.” This kneejerk reaction is hardly the same kind of knowing consent as sitting down at an unfamiliar desk in the presence of strangers and signing (usually more than once) a printed multipage document.
10: Signing by using a program, Web site, or service
In browse-wrap consent, a contract happens automatically. The contract may state, “Entering this Site will constitute your acceptance of these Terms and Conditions” (Hines) or “Accessing, browsing, or otherwise using the site indicates your agreement to all the terms and conditions in this agreement” (Zappos). Courts have generally upheld this form of assent, while applying the usual requirements for notification of contract terms and any changes.
Personally, I think the idea of passive consent is seriously flawed. Browse-wrap consent seems to assume agreement to a contract without any prior interaction between the two parties. Under the terms as I understand them, you’ve already agreed to the contract just by arriving at a Web page where you can click a link to start reading the contract. This can’t be right.
The untamed frontier
Law evolves as courts come to grips with changes in society and Congress enacts new legislation. Given the increasing prevalence of stealth ways of signing a contract, we can expect to see further rulings of U.S. District Courts, or the Supreme Court, clarifying their legality.
To me — and again, I’m not a lawyer — these are “drive-by” signings. They sneak up, lock you into a contract, and then vanish into cyberspace, leaving few reminders of the contract or its terms. It’s like being locked into a contract just by entering a store, turning the page of a book, or making a phone call (even a wrong number). It’s not a demonstration of knowing consent. It’s an ambush.
Have you seen a particularly ludicrous or Draconian clause in a contract? Have you found a creative way of dealing with so-called signature pads? Share your experiences and advice with fellow TechRepublic members. (Just remember: If you have a contract problem, consult a lawyer!)