Electronic Contracts and Signatures: Is It Safe to Ditch the Paper and Pen?

In today’s day and age, more and more businesses and business owners are using electronic contracts as a way to do business more efficiently.  An electronic contract is an agreement that is created and signed in electronic form (e.g. documents in .pdf format).    Lately, a common question that I am asked by clients is, “are electronic contracts enforceable?”  The answer is, it depends.

In 2000, the Electronic Signatures in Global and International Commerce Act (ESGICA) was passed. This Legislation made electronic contacts and signatures legal and just as enforceable as their paper and ink counterparts.  However, the Act did make certain types of electronic contracts and writings invalid and unenforceable.  The following must still be signed in paper and ink format:

  • Notices of default, repossession, foreclosure and eviction
  • Notices of cancellation or termination of utility services
  • Notices of cancellation or termination of health or life insurance benefits
  • wills, codicils, and testamentary trusts
  • documents relating to adoption, divorce, and other family law matters
  • court orders, notices, and other court documents such as pleadings or motions
  • product recall notices affecting health or safety, and
  • documents required by law to accompany the transportation of hazardous materials.

This post is not intended to be legal or tax advice.  Formeller & Formeller LLP’s Chicago startup attorneys have helped numerous clients form and operate their businesses.  Our skilled Chicago business lawyers can help counsel and assist you with various issues relating to business contracts and agreements.  Please contact our law firm today for a free legal consultation if you would like to discuss a new business venture, business ownership or other business-related issues.