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Another article is just plain wrong Electronic Signatures are valid in the majority of states.

Giving out wrong information is common on the Internet. Be Aware. It is worse when the person handing out the free info has credentials to back up his statement. However wrong is still wrong.

Saddler Sports wrote Electronic Signatures on Waiver Release Forms and then said that they were not viable.

Let’s start at the beginning. Releases are contracts. Contracts to be valid require a meeting of the minds and consideration. That means the people who are parties to a contract have to understand what they are doing (You sign it, you understand and agree to it.). There has to be something of value changing hands, this is called consideration. Nowhere in any state does the definition of a contract require the word paper.

The law is filled with cases were there were lawsuits over oral (non-written) contracts. The problem with oral contract is proving the terms. Who agreed to what?

So there is really nothing in the law since the 1700’s that would not allow an electronic contract. However, to help move contracts and the law forward (and hopefully save some trees) Congress passed the Electronic Signatures in Global and National Commerce Act, Pub.L. 106–229, 114 Stat. 464. Most states soon followed with their own acts. Colorado passed its electronic signature act in 2002.

(If the electronic laws were not working, valid and enforceable, how would a bank not issue checks anymore? How could you make a deposit with a picture on your phone?)

The laws say electronic signatures are valid. Most states have a few exceptions to the law. You cannot electronically.

·         cancel or terminate utility services, including water, heat, and power;

·         default, acceleration, repossession, foreclosure, or eviction, or the right to cure, under a credit agreement secured by, or a rental agreement for, a primary residence of an individual;

·         cancel or terminate health insurance or benefits or life insurance benefits, excluding annuities; or

·         recall of a product, or material failure of a product, that risks endangering health or safety; or

·         electronically use any document required to accompany any transportation or handling of hazardous materials, pesticides, or other toxic or dangerous materials

Some states have more exceptions like South Carolina. See (South Carolina Uniform Electronic Transactions Act) Other than the exceptions set forth under state laws, electronic signatures are valid. If the author of the act had looked, ski resorts have been using electronic releases for season passes for five years.

Worse the article in replying to the question voids the release. The article suggests signing the contract online then signing a contract again in paper. A contract to be valid requires consideration. What is the consideration for the new, written contract? Contracts also need to cancel the prior contract, which again requires new consideration. The activity has already been paid for so the consideration for that contract is done.

I’ve been able to electronically notarize documents for more than five (5) years. In South Carolina, you can record deeds and death certificates electronically.

Do Something

I don’t know what to tell you. Everyone makes mistakes. Even me. However, when I make a mistake, I try to correct it, ASAP. We’ll see if that happens.

More importantly, when providing advice online that may make a difference between a business winning or losing a lawsuit, you better damn well be write when you post it.

Maybe someone has an investment in a lumber mill or paper manufacturer?

For more information see:

Electronic release upheld in Florida federal court for surfing on a cruise ship       http://rec-law.us/LPSLWS

Electronic Signature on release in NY upheld.                                                 http://rec-law.us/yEhJbQ

PA court upholds release in bicycle race.                                                           http://rec-law.us/wJlrdi

What do you think? Leave a comment.

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2 Comments on “Another article is just plain wrong Electronic Signatures are valid in the majority of states.”

  1. If you carefully review my blog again, you will see that I am a proponent of electronic waiver/release agreements and don’t discourage their use if set up properly. My concern about them has nothing to do with the enforceability of electronic signatures in general, instead, it has to do with being able to prove that the signature was indeed signed by the proper parties to the contract. In the event of a minor, it must be signed by both the adult parent / guardian and the minor.

    Do you disagree that it is better for the signing party to have to sign their full name or initials instead of just clicking on “I agree”? Or is my concern not an issue?

    Do you disagree that the minor must sign a separate section to preserve the possibility of some type of assumption of risk defense?

    By the way, the legal departments of both K&K and American Specialty agreed with the above concerns when I interviewed them. I’ve also consulted with Tracey Knutson on many issues as regards waiver/release and assumption of risk.

    As regards the later signing a paper copy of the waiver/release, that was in lieu of signing an electronic copy, not in addition to. I think that is cumbersome and prefer for 100% of the registration process to be online, including the waiver/release.

    I did find your links to be of interest and am glad to see that the courts seem to be upholding electronic waiver / release agreements. Interesting that PA wants the waiver / release to mention gross negligence.

    Most of my clients won’t actually pay to hire legal counsel to customize their own waiver / release. If they do, they make the mistake of hiring local legal counsel instead of a national expert in this area who is familiar with the law in their state. However, I would always recommend the hiring of legal counsel for customization even thought I know that less than 5% would do this. Short of that, the K&K waiver form certainly does more good than harm even though it is based on national case law and is better than most.

    I don’t think that we have a serious disagreement and don’t understand why you attacked my reputation in your blog. I’m one of the few insurance agents in my niche that even cares to produce risk management materials for my clients to keep them out of trouble. Most are only looking to make the sale. If someone can show me that I have made a mistake or if my materials are outdated, I would be the first to want to update them.

    John Sadler

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    • Sorry, I definitely missed the intent of your post.

      Proving a signature is actually easier online then on paper. ID’s are never checked when a paper release is handed in. Unless the person signing the contract is the one paying with a credit card there is no opportunity and I suspect the credit card is never checked.

      With an online release you can verify immediately with the ISP, the IP address, the credit card info, the registration info, etc. It is more secure than any paper system. On top of that you have proof of the verification you can hold onto forever because it is electronic.

      Your industry went online/paperless a decade ago. I buy insurance now and never see an agent or sign an application or contract. If insurance companies are doing it, and the ski industry, and ticket sales and alcohol sales at events, releases should be easy. No jail time there.

      If you are worried about “I agree” then sure. The page before I hope you are collecting info about the person so you know who is signing up for what. Name, address, etc. You can even use a 2-step process. The first click you agree and then a window or page appears that says something like “You understand you are giving up your legal rights and signing a release?” “I agree”

      A minor can’t sign a release anyway so you are not losing anything there. You are losing for those minor’s that are of the age where they can assume the risks, the opportunity to read and sign a document saying they acknowledge the risks, however I believe I’ve developed several better ways of doing that that you can include in the adults release that will not only prove assumption of the risk but proof the minor knew and appreciated the risk.

      Proof that other people are not up to speed proves….what? Seriously, who has more attorneys Allstate or K&K, American Specialty combined. Allstate bought Esurance and there is no paper there.

      The issue I think you are referring to is signing an electronic copy of a release then signing a paper copy when the person arrives. That might void both documents or at least it will cancel one because there is no new consideration.

      Ever see the movie Forest Gump? Insurance companies giving legal advice is a conflict of interest. Stupid is as stupid does. If you want to rely on your insurance company go ahead and use their release. Then turn around and sue them when it does not work for practicing law without a licnese and wasting your time.

      You need to explain some things to your clients. A trial now days of an injury to a guest is going to take 1-2 weeks. For every day of trial there will be a least 1 day of preparation with the client. There will be a deposition of the employees which also includes a day of prep. So a five day trial will cost the business a minimum of 15 days, paid for employees and unpaid for the owner, of a business. That does not include the time of answering interrogatories, gathering documents etc. They can get a free release that may or may not work and lose 15-30 days of work or they can pay to have a release written for their business and their activity and their risks based on their state law.

      Not attacking you, attacking what you write. Not personal for sure! I’ve said in the past that you have some great articles. looking at your release, you don’t differentiate where they can be used. What about Montana, Louisiana or Virginia? Releases are void there. What about the fact those releases don’t have venue and jurisdiction clauses. If your client has a guest injured and goes home to MT, LA or VA and sues your release worse than worthless, it provided a sense of protection that did not exist. (See States that do not Support the Use of a Release http://rec-law.us/zHGQsZ)

      You speak of minors and your release have places for minor’s to sign. People probably mistakenly believe that works. It doesn’t. I personaly have a problem of providing legal advice (and a contract is advice) that is WRONG. (See States that allow a parent to sign away a minor’s right to sue http://rec-law.us/1bWhpNN) Even in those states where a parent can sign away a minor’s right to sue your releases don’t work in 2 of those states.

      Parts of your release are going to help an injured participant sue a manufacturer or equipment maybe. Who is the release, the name on the sign or the name of the llc. What if the lawsuit is against the name on the sign out front? What about employees, volunteers, other participants? What about assumption of the risk. In many states that release is going to fail, you you have no assumption of risk language in the release. Assumption of the risk requires the injured person to know and assume the risks. How does that document prove they knew of any risk and if they don’t know they can’t assume. (See Assumption of the Risk http://rec-law.us/wMtiET)

      Your site provides great information, but when it provides forms, legal contracts, I believe you are crossing the line. Any attorney who agrees with you is like many, hoping they can get the defense work the bad release will create.

      Please keep kicking and asking questions and giving me grief!!!

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