Dylan Quinn, MJLST Lead Note Comment Editor
The work week is winding down and you are furiously trying to reach an agreement with opposing counsel on some issue or dispute. You email back and forth until it appears you have reached an agreement – at least for the weekend. You will tell your client about the essential terms next week to see if you should “finalize” everything with the other side.
I don’t want to ruin your weekend, but you may have already bound the client to an enforceable agreement. How, you ask, can this be possible if I did not sign anything? Well, in light of the UETA and developing case law, that automatic signature block at the bottom of all your emails might be enough.
Minnesota Statutes Section 481.08 provides that an “attorney may bind a client, at any stage of an action or proceeding, by agreement made … in writing and signed by such attorney.” In addition, Minnesota has long joined almost every other state by adopting a variation of the Uniform Electronic Transactions Act (UETA). The purpose of the UETA is to provide a legal framework for the use of electronic signatures and records in government of business transactions, making them as legal as paper and manually signed signature. In sum, the UETA will apply to agreements reached under Section 481.08.
Minnesota Statutes Section 325L(h), defines “electronic signature” as “an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.” Furthermore, Section 325L.05 (b), makes clear that the UETA in Minnesota only applies to transactions between parties where they both have “agreed to conduct transactions by electronic means,” which is determined by the “context and surrounding circumstances, including the parties’ conduct.” However, any attorney negotiating a settlement or other stipulation via email will open themselves up to the argument that they intended to transact business electronically, so the central question is whether or not an attorney intended the signature block to constitute a legally significant act that authenticates the email, thus binding the client to a settlement or other agreement.
It has long been held that an email chain can constitute a binding agreement. This past summer, the Minnesota Court of Appeals, held that “an electronic signature in an email message does not necessarily evidence intent to electronically sign a document attached to the e-mail.” See SN4, LLC v. Anchor Bank, fsb, 848 N.W.2d 559, 567 (Minn. Ct. App. 2014). While the decision adds to a growing body of jurisprudence in this area, the question of automated signature blocks was tabled by the decision and the parties involved were not attorneys. The Minnesota Supreme Court denied review this past September.
Other jurisdictions can offer some guidance. For example, In New York, where another law outside the UETA effectively serves the same purpose, it has long been held that automated imprints or signatures were insufficient to authentic every document. See Parma Tile Mosaic & Marble Co. v. Estate of Fred, 663 N.E.2d 633, 635 (NY Ct. App. 1996) (finding for Statute of Frauds purposes, automatic imprint of “MRLS Construction” on every faxed document did not amount to “sender’s apparent intention to authentic every document subsequently faxed.”).
In Texas, there is a split among the Courts on the issue of an attorneys signature block creating an enforceable agreement. Compare Cunningham v. Zurich Am. Ins. Co., 352 S.W.3d 519, 529-30 (Tex. App. 2011) (determining settlement agreement had not been reached because the Court declined “to hold that mere sending … of an email containing a signature block satisfies the signature requirement when no evidence suggests that the information was typed purposefully rather than generated automatically.”), with Williamson v. Bank of New York Mellon, 947 F. Supp. 2d 704, 710 (N.D. Tex. 2013) (disagreeing with Cunningham because (1) the attorney must have typed in the signature block information “at some point in the past,” (2) a broad view of the electronic signature definition comports with UETA’s purpose, and (3) “email communication is a reasonable and legitimate means of reaching a settlement in this day and age.”).
On the one hand, it seems like a strong argument to point out the fact that all emails contain the signature block. How can that possibly evidence the requisite intent to authenticate statements or agreements? Do we really want to allow attorneys to use this argument any time they get close enough to reaching an agreement when emailing back and forth? In response, one must ask: in what instance should we allow an attorney to seemingly agree with opposing counsel via email, but get out of it because they did not use “/s/”, and just had their automated signature block?
Regardless of the outcome, the potential impact of a decision one way or the other will have far reaching impacts on legal practice, and more specifically litigation, in Minnesota. As the Court recognized in Williamson, “email communication is a reasonable and legitimate means of reaching a settlement in this day and age.” If the entire purpose of the UETA was to facilitate electronic transactions, and the Minnesota Supreme Court is in charge of providing professional and ethical guidance for the profession within the state, they should grant review as opposed to tabling the issue.
Until then, all parties transacting business electronically, but especially attorneys, should be conscious of that little signature block they typed in the first day they set up their email account.