The coronavirus-triggered shelter-in-place and social distancing requirements of 2020 have created, or at least hastened, changes in all walks of life, including in the world of business. Negotiations that might once have occurred face-to-face now might take place over a Zoom conference. Some businesses are, when it comes to their commercial contracts that once would have been executed with ink on paper, reconsidering whether those agreements can be signed electronically. With these new changes come new legal challenges, including ensuring that the methods you’ve used comply with Florida law in order that your end result will be an enforceable contract. Always be sure to rely on the advice of an experienced South Florida commercial contract attorney when it comes to executing such a contract, in order to ensure the contract with which you end up is one that’s drafted properly, executed properly and enforceable in the courts.
Electronic signatures are something that were gaining in popularity and frequency of use even before the pandemic struck. Before anyone had ever heard the phrase “COVID-19,” Florida had adopted its version of the Uniform Electronic Transactions Act. Fla. Stat. Section 668.50(7)(a) says that a signature “may not be denied legal effect or enforceability” strictly because it is an electronic one, and Subsection (b) says that just “because an electronic record was used in the formation of the contract,” that alone is not a sufficient basis to make the contract unenforceable.
In Florida, a valid electronic signature can be “an electronic sound,” a symbol, or a process “logically associated with a record” and inserted “with the intent to sign the record.” Electronic signature technology can allow signors to create an electronic version of their signature using their finger or a stencil on a touchscreen, or to sign with a prefabricated signature font created by the electronic platform. Either version potentially can be a valid electronic signature.
There are a few additional things that are required in order for an electronic contract record and/or an electronic signature to be valid. First, all parties must have agreed that they would go forward in an electronic process and, as the statute indicates, there must be clear intent (by all parties) to enter into the contract.
Generally, the courts have looked upon electronic signatures – whether in emails, texts or document software like Adobe – the same as written signatures. In a Middle District of Florida case from last year between a California cannabis grower and a Tampa-area business, the federal court was required to decide if a $400,000 promissory note, which was signed electronically, was enforceable. Even though the original note “only existed in an electronic format,” it was still enforceable. Because the note in dispute in this case met all the requirements of Section 668.50, the fact that it only existed in electronic format was not, by itself, a barrier to the note’s enforceability.
A few years earlier, a state court case that had originated in Palm Beach County ended similarly. In that case, the evidence showed that the parties had demonstrated mutual intent to enter into the contract, that the bank had an authoritative electronic copy of the agreement and that the electronic signatures were valid. As a result, the electronic note was enforceable.
Ever-advancing modern technology impacts all areas of our lives, including business. New technology may give you the ability to complete the contract formation and execution process in an efficient way that saves time and money. Doing so, though, means making sure you’ve done everything the law demands to create an enforceable agreement. To make sure that your contract is one that properly protects your interests and is enforceable in the courts, rely on the skilled South Florida commercial contract attorneys at Stok Kon + Braverman. Our team offers the most up-to-date knowledge of the law and the experience necessary to get you the contract your business needs.
Contact us online or by calling (954) 237-1777 to schedule your consultation.