E-Agreements & E-Docs – Are They Binding?

May 22, 2018 | Corporate and Business Law, Featured, News

By: Albert McLean


As more and more individuals and businesses utilize electronic commerce, more and more companies are using e‑signatures to execute agreements. To the “old school” folks who are still catching up with the advances of the computer age (like me), the question of the legality and enforceability of contracts executed electronically might seem uncertain, but the law is clear that an agreement electronically signed by a customer is just as enforceable as a paper agreement signed by hand.  Laws governing electronic signatures have been in place for over 15 years.

The Electronic Signatures in Global and National Commerce Act (ESIGN) was enacted in 2001 and the Uniform Electronic Transaction Act (UETA) was enacted by states beginning in 2001 and has been adopted in 47 of the 50 states.

Tennessee adopted the UETA in 2001 (Tenn. Code Ann. 47-10-101, et seq.). Under Section 107 of the UETA (Tenn. Code Ann. 47-10-107), “(a) a record or signature may not be denied legal effect or enforceability solely because it is in electronic form;  (b) a contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation; (c) if a law requires a record to be in writing, an electronic record satisfies the law; and (d) if a law requires a signature, an electronic signature satisfies the law.”

Although certain types of transactions are excluded from the UETA, such as promissory notes (governed by Chapter 3 of the Uniform Commercial Code), letters of credit (governed by Chapter 5 of the Uniform Commercial Code), and security agreements (governed by Chapter 9 of the Uniform Commercial Code), and wills, codicils, and testamentary trusts (Tennessee Code Annotated § 47-10-103), the UETA applies to all other business transactions, including Chapters 2 and 2a of the Uniform Commercial Code, which deal with the sale and lease of goods.


The case law supports the validity of electronically signed agreements.  In Barwick v. Government Employee Insurance Company Inc., 2011 Ark. 128 (2011), the Arkansas Supreme Court enforced a provision in an automobile insurance policy that stated that the customer rejected coverage of medical benefits. The policy was obtained online from a GEICO website and was signed electronically by the plaintiff.

After sustaining injuries in an automobile accident, the plaintiff asserted a claim against GEICO for medical expenses, and GEICO denied liability because the plaintiff had rejected coverage for medical benefits in her online application.  The plaintiff asserted that she was entitled to medical benefits because an Arkansas insurance statute specifically required rejection of coverage of medical benefits to be in writing to be binding.

The Arkansas Supreme Court held that the plaintiff had rejected the medical benefits coverage “in writing” in her application online by signing it electronically (by clicking a button agreeing to the terms). The Arkansas Supreme Court applied the UETA provision that states “if a law requires a record to be in writing, an electronic record satisfies the law.”  Numerous other courts in other states have also uniformly upheld the validity of agreements signed electronically.


A more involved issue than whether e-documents are binding is how one proves an e-agreement or other e-document in court. For example, one can imagine a scenario in which a customer disputes signing an e-agreement or an e-mail that is critical to a case, thus requiring the company who is suing the customer to prove the customer’s electronic signature.

With a paper agreement signed by a customer, and perhaps even witnessed by a third party, if the signature were disputed, the agreement could be proven in court by a witness to the agreement, or if none, by exemplars of the person’s signature. So, how does one prove an e-agreement or other e-document if the electronic signature is disputed? Essentially, one must prove two things: (1) “attribution” and (2) “authenticity”.


The law says that one must prove that an e-agreement or other e-document is “attributed” to the person sought to be charged, i.e., that the e-agreement was signed electronically by the person who purportedly signed it.  The main way to prove “attribution” is by the testimony of a company representative who is familiar with the company’s policies on electronic signatures and can testify how the document came to be signed, and the process that was followed in obtaining the signed agreement, thus establishing that the e-signature is “attributable” to the customer.

Some companies may utilize software and security programs available to companies who wish to use digital signatures to ensure the security of their agreement and ensure the customer’s consent.  However, many companies don’t have such security procedures in place.

The UETA (Tenn. Code Ann. 47-10-109[a]) provides that “the act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to whom the electronic record or electronic signature was attributable.”  The section further provides that “the effect of an electronic record or electronic signature attributed to a person under subsection (a) is determined from the context and surrounding circumstances at the time of its creation, execution, or adoption, including the parties’ agreement if any, and otherwise as provided by law.”

Specific examples of proving “attribution” are stated in the “Official Comments” to the UETA, as follows: “The person types his/her name as part of an email purchase order”; or “a person’s employee, under authority, types the person’s name as part of an email purchase order;” or “the person’s computer, programmed to order goods upon receipt of inventory information within particular parameters, issues a purchase order which includes the person’s name, or other identifying information, as part of the order.”

The “Official Comments” to the UETA (section 109) offer additional guidance to attorneys and the courts on how to prove “attribution” as follows:

“In the context of attribution of records, normally the content of the record will provide the necessary information for a finding of attribution.  It is also possible that an established course of dealing between parties may result in a finding of attribution.  Just as with a paper record, evidence of forgery or counterfeiting may be introduced to rebut the evidence of attribution.

Certain information may be present in an electronic environment that does not appear to attribute but which links a person to a particular record.  Numerical codes, personal identification numbers, and public and private key combinations all serve to establish the party to whom an electronic record should be attributed.  Of course, security procedures will be another piece of evidence available to establish attribution.

This section does apply in determining the effect of a “click-through” transaction.  A “click-through” transaction involves a process that, if executed with intent to “sign,” will be an electronic signature. … In the context of an anonymous “click-through,” issues of proof will be paramount.  This section will be relevant to establish that the resulting electronic record is attributable to a particular person upon the record of proof, including security procedures which may track the source of the click-through.”   (Think, “What is your mother’s maiden name?)

Finally, the “Official Comments” guide as to how another form of e-documents – facsimile transmissions, can be shown to be attributed to a person, as follows:

“A facsimile may be attributed to a person because of the information printed across the top of the page that indicates the machine from which it was sent.  Similarly, the transmission may contain a letterhead that identifies the sender.  Some cases have held that the letterhead constituted a signature because it was a symbol adopted by the sender with the intent to authenticate the facsimile.

Other cases have found facsimile letterheads NOT to be signatures because the requisite intention was not present.  The critical point is that with or without a signature, information within the electronic record may well suffice to provide the facts resulting in attribution of an electronic record to a particular party.”


In addition to proving “attribution”, a proponent of any e-documents (and any other evidence for that matter), must also establish that the document is “authentic”, that is, the document is what the proponent of the evidence says it is.  A “primer” on what proof is required to establish “authenticity” of e-documents is Lorraine v. Markel American Insurance Company, 2007 U.S. Dist. LEXIS 33020 (D. Md. May 4, 2007).

In this case, the judge (Judge Paul Grimm) provides an encyclopedic discussion of all the various rules of evidence that could apply to the introduction of e-documents.  Judge Grimm offers the following guidance to attorneys on how to establish the evidentiary requirement of “authentication” of e-documents, and thus establish their admissibility into evidence.

1. By a testifying witness. The testifying witness must know the company’s business practices, and must “provide factual specificity about the process by which the electronically stored information is created, acquired, maintained, and preserved without alteration or change or the process by which it is produced if the result is of a system or process that does so.” (Fed. R. Evid. 901(b)(1)).

2. Comparison by the trier of fact or by expert witnesses with other documents which have been authenticated. In the context of electronically stored information, this can be fulfilled by comparing emails previously authenticated with the evidence in question.  (Fed. R. Evid. 901(b)(3)).

3. Circumstantial evidence in the evidence itself.  This rule is the most frequently used method to authenticate emails, as the content of what the email says can often authenticate it.  (United States v. Siddiqui¸ 235 F. 3d 1318, 1322-23 [11th Cir. 2000]).  Another way to satisfy authentication is through hash marks, which are unique identifiers attached to electronic information, and metadata which also provides distinguishing information about the evidence.   (Fed. R. Evid. 901(b)(4)).

4. Public records.  This rule applies if the proponent of the evidence can show that the public office from which the electronic records were taken is the legal custodian of the records.  For public records, there is no need to show that the computer system producing the records was reliable or the records accurate – this is presumed under the law.  Any question as to accuracy goes to the weight of the evidence rather than admissibility.  (Fed. R. Evid. 901(b)(7)).

5. Evidence produced as a result of an accurate process or system.  This rule is satisfied by introducing “evidence describing the process or system used to achieve a result and demonstration that that result is accurate.”  (Fed. R. Evid. 901(b)(9)).

Also, Judge Grimm points out that some e-documents may be considered to be “self-authenticating” documents, and thus admissible without the testimony of a witness. Examples of such documents include:

1. Official publications.  A proponent may establish that an official publication qualifies as a public record under Rule 803(a) and is self-authenticating.  For example, a posting on the website of the United States Census Bureau would be an official publication.  (Fed. R. Evid. 902(5)).

2. Self-authentication by inscriptions, signs, tags, or labels.  Business emails that contain information showing the origin of the transmission and identifying the employer company may be sufficient to authenticate an email.  (Fed. R. Evid. 902(7)).

3. Authentication of regularly conducted business.  A party may provide a certification (affidavit) that establishes that the e-documents produced are “business records” by satisfying the requirements of the Fed. R. Evid. 803(6). (Fed. R. Evid. 902(11)).

Another very interesting point made by Judge Grimm in Lorraine v. Markel is that documents produced in discovery are presumed to be authentic, that is, a party cannot produce information in discovery and then claim that the opposing party must prove authenticity.  Lorraine v. Markel, p. 68.

Finally, Judge Grimm notes that authentication may also be established in the following ways: (a) by judicial notice, (b) by taking advantage of Federal Rule of Civil Procedure 36 (requesting party admissions of a document), (c) by stipulation at a pre‑trial conference, and (d) under Federal Rule of Civil Procedure 26(a)(3)(B) in one’s Pretrial Disclosures, which gives a party 14 days to file objections to an opposing party’s Rule 26 disclosures, and failing to do waives all objections except under Rules 402 and 403.


With e-commerce ever increasing, the use of e-agreements and other e-documents will continue to increase in the business world and therefore in the litigation arena as well.  The law recognizes the validity and admissibility of e-agreements and other e-documents in court.  Based on the foregoing authorities and guidance, business owners and their attorneys can find some comfort in the fact that despite the exponentially expanding developments in e-commerce, e-agreements, and e-documents can be relied on in the business community and accepted by the courts.


Albert McLean is a trial lawyer and advisor to business and insurance clients in the Memphis, Tennessee office.  His practice is concentrated on civil litigation in the following areas: insurance defense, business, and commercial litigation, premises liability, construction, workers’ compensation, medical malpractice, commercial collections, and probate.

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