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Do we Have a Deal? Verifying the Acceptance of a Contract Do we Have a Deal? Verifying the Acceptance of a Contract

Do we Have a Deal? Verifying the Acceptance of a Contract - PowerPoint Presentation

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Do we Have a Deal? Verifying the Acceptance of a Contract - PPT Presentation

Peter Moran Principal Norton Gledhill Overview Principles of Acceptance Law of Signatures Electronic Signatures definition Electronic Signatures some cases Electronic Acceptances issues for the future ID: 690391

acceptance electronic deal signatures electronic acceptance signatures deal signature page 2016 march email form method document person signing contract

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Slide1
Slide2

Do we Have a Deal?Verifying the Acceptance of a Contract

Peter Moran

Principal

Norton Gledhill Slide3

Overview

Principles

of Acceptance

Law of SignaturesElectronic Signatures – definitionElectronic Signatures – some casesElectronic Acceptances – issues for the futureTips for Practitioners

Do We Have a Deal? | 16 March 2016

Page

3Slide4

Acceptance

For an offer to be accepted such that it constitutes a binding agreement:

There must be an external manifestation of assent, some word spoken or act done by the

offeree or by his or her authorised agent that the law can regard as the communication of the acceptance to the offeror.Powell v Lee (1908) 99 LT 284Do We Have a Deal? | 16 March 2016

Page4Slide5

Forms of Acceptance

There must be some form of communication of intent to accept the offer,

ie

:Affixing a signature or mark to written terms.Verbal acceptance.Conduct – such as the offeree performing obligations (unilateral contract).

Implied by the circumstances – eg postal acceptance.

Do We Have a Deal? | 16 March 2016 |

Page

5Slide6

Forms of acceptance

Silence cannot amount to acceptance (

Felthouse

v Bindley) but:silence and conduct can because the element of communication of intent can still be present; requirement to communicate acceptance can be waived - eg automatic renewals - see Nortel Australia Pty Ltd v Portfolio Leasing Australia Ltd

(1998) 8 BPR 15, 857; andofferor

cannot prescribe silence as a method of acceptance and then use the failure to communicate acceptance as a basis to avoid the contract.

Do We Have a Deal? | 16 March 2016

Page

6Slide7

Acceptance principles

The

offeror

must merely know of the acceptance, even though the acceptance was not brought to the offeror’s notice by the offeree. Brambles Holdings Ltd v Bathurst CC (2001) 53 NSWLR 153

If the offeror has prescribed a form of acceptance, that form must generally be followed for acceptance to have occurred.

Latec

Finance Pty Ltd v Knight

[1969] 2 NSWLR 79.

The risk of non-communication of acceptance is on the accepting

party.

For Example, in

Latec

the service provider reversed the onus (

ie

made the customer the

offeror

) and, by

not communicating its acceptance back to the customer, the customer was held not to be bound to the service provider even though they had filled out and submitted the requisite form.

Do We Have a Deal? | 16 March 2016

Page

7Slide8

Signatures – Courts’ flexible approach

A signature can:

be a rubber stamp;

Lazarus Estates, Ltd. v. Beasley [1956] 1 QB 702; London County Council v. Vitamins, Ltd., London County Council v. Agricultural Food Products, Ltd. [1955] 2 QB 218; Goodman v J Eban [1954] 1 QB 550

be initials, a cross or any mark that identifies the act of the person;

(

Morton v Copeland

(1855) 16 CB 517;

Baker v

Dening

(1838) 8 A&E 94;

Hill v Hill

[1947]

Ch

231;

Newall

v Tarrant

[2004] EWHC 772)

be a name typed or printed into an agreement;

Durrell v Evans (1862) H & C 174, Brydges v. Dix (1891) 7 TLR 215; France v. Dutton

[1891] 2 Q.B. 208, Newborne

v.

Sensolid (Great Britain), Ltd. [1954] 1 QB 45, Neill v Hewens (1953) 89 CLR 1, Torrac Investments Pty Ltd v Australian National Airline Commission (1985) ANZ ConvR 82 but cf Russell v Slater [1912] QSR 237

Do We Have a Deal? | 16 March 2016 |

Page

8Slide9

Signatures – Courts’ flexible approach

A signature can:

appear at any part of the memorandum of terms not just at the beginning or

end; and Heppingstone v Stewart (1910) 12 CLR 126be applied by an agent. Newall

v Tarrant [2004] EWHC 772

Do We Have a Deal? | 16 March 2016

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9Slide10

Signatures – Courts’ flexible approach

Authenticated Signature Fiction

Someone’s name typed in a contract could be construed as their signature if

the person so named “recognize[d] the instrument containing his name as the final and complete expression of a contract he then or there entered into as a party” this would satisfy Statue of Frauds requirement notwithstanding there wasn’t signature in the traditional sense. Neill v

Hewens (1953) 89 CLR 1 following a line of authorities such as Knight v

Crockford

(1794) 1

Esp

190 (170 ER 324);

Saunderson

v Jackson

(1800) 2

Bos

&

Pul

238 (126 ER 1257); Schneider v Norris (1814) 2 M & S 286 (105 ER 388); Johnson v Dodgson (1837) 2 M & W 653 (150 ER 918); Durrell v Evans (1862) 1 H & C 174 (158 ER 848); Evans v Hoare (

1892) 1 QB 593; Cohen v Roche (1927) 1 KB

169 and

Leeman v Stocks

(1951) Ch 941Accepts but then finds a way around the form over function view of signaturesDo We Have a Deal? | 16 March 2016

Page10Slide11

Signatures – function over form

A signature, as a legal concept, bears no relationship to the popular conception of a name, on paper, in the signatory’s own handwriting. A signature is not a “thing” but a process. If that process produces sufficient evidence that a person has adopted a document as his own, and that document before the court is the same document to which the process was applied, then the document has been signed

.

Prof Reed C, “What is a Signature”, 2000(3) The Journal of Information, Law and Technology (JILT). Cf – Firstpost

Homes Ltd v Johnson [1995] 1 WLR 1567 - the term “signature” must be given its ordinary linguistic meaning such that the parties must write their names with their own hands upon the document.

Do We Have a Deal? | 16 March 2016 |

Page

11Slide12

Electronic Signatures

It makes no difference whether that operator writes the…acceptance…with a steel pen an inch long attached to an ordinary penholder, or whether his pen be a copper wire a thousand miles long. In either case the thought is communicated to the paper by the use of the finger resting upon the pen; nor does it make any difference that in one case common record ink is used, while in the other case a more subtle fluid, known as electricity, performs the same office

.

Howley

v Whipple

, 48 N.H. 487 (1869) – Supreme Court of New Hampshire

Do We Have a Deal? | 16 March 2016

Page

12Slide13

Electronic Signatures

Definition in Australia

An electronic communication satisfies an obligation to provide a signature if:

a method is used to both identify the signee and indicate their intention;the method is as reliable as is appropriate; andthe counterparty consents to the method used.Section 10 of Electronic Transactions Act 1999 (Cth

) and section 9 of the Electronic Transactions (Victoria) Act 2000 (Vic) Which largely follows the approach suggested by the UN in the UNCITRAL Model Law

Do We Have a Deal? | 16 March 2016

Page

13Slide14

Electronic Signatures

Definition in United States

A

signature is an electronic process logically associated with a record that is adopted by a person with the intent to sign that record.Section 206 of the Electronic Signatures in Global and National Commerce ActSection 1710 of the Government Paperwork Elimination Act Section 2 of the Uniform Electronic Transactions Act

Title of presentation | 10 April 2015 |

Page

14Slide15

Electronic Signatures

What does an electronic signing process need to contain to be valid?

T

he process must identify and authenticate a person.It must indicate the person’s approval of the terms.The link between the signature and the contract must be of sufficient

integrity.

Do We Have a Deal? | 16 March 2016

Page

15Slide16

Electronic Signatures

Questions for practitioners

to ask in determining if an electronic signing process is acceptable:

Can you prove that the approval is genuinely from the person asserting to have provided the electronic signature?Was the signing method used by the accepting party agreed to by the offeror?Is it clear that the person intended to approve the contract terms by

virtue of completing the electronic signature process?

Is the

signed document

provided

back to the

offeror

the

same as that

signed by the

accepting party and initially provided by the

offeror

?

Do We Have a Deal? | 16 March 2016 |

Page

16Slide17

Electronic Signatures – some cases - Email

J Pereira

Fernandes

SA v Mehta [2006] 2 All ER 891Defendant sent an email with an offer of a guarantee. Defendant’s name not included but email header contained defendant’s email address which contained their name.Provided a person inserts their mark into a document with the intention of giving it authenticity, it does not matter if it’s a full name; or a first name prefixed by some or all initials; or by using a pseudonym or a combination of letters and numbers. It makes no difference if a person does so in an electronic document or a hard copy

.

In this case, the automatic insertion of the email address in

the

header was too incidental to be evidence of the defendant’s intention to give the email authenticity.

However, in

obita

, Judge

Pelling

QC held that a person typing his or her

name into an email, including via typing an email address,

into an email could be a sufficient signature for the purpose of satisfying the Statute of Frauds.

Do We Have a Deal? | 16 March 2016

Page

17Slide18

Electronic Signatures – some cases - Email

Legal Services Board v Forster [2010] VSC 192

Legal Services Board circulated a resolution to appoint a receiver to a legal practice which was required to be signed by the members of the Board.

One member sent an email with the resolution and stated: “The signature is typed in as I am away at the moment and don’t have access to a printer”.Emerton J held that the typed signature was intended to stand as the person’s signature. He referred to common law authorities, such as Morton v Copeland, that a signature may be any mark which identifies it as the act of the party.

Emerton J also noted that the method used had been consented to by the entire Board and that, therefore, this form of signing was validated by section 9 of the Electronic Transactions (Victoria) Act 2000 (Vic

).

See also Harding v Brisbane City Council &

Ors

[2009] 196 QPELR 207.

Title of presentation | 10 April 2015 |

Page

18Slide19

Electronic Signatures – some cases – clickwrap and

browsewrap

Bay International AG v Creative Writing Festival Entertainment Pty Ltd

(2006) 170 FCR 450Clicking on “send this order” and “purchase ticket” buttons on an online form (after having provided identification) was held to constitute the signing of an electronic contract.US decisions indicate that browsewrap

agreements will be upheld if the user has actual or constructive knowledge of a website or app’s terms and conditions prior to use. Every occasion that a clickwrap agreement has been considered by the courts in the US, they have been found to be enforceable.

Fitzgerald

, Fitzgerald, Middleton, Clark and Lim, “Internet and E-Commerce Law, Business and Policy”

Lawbook

Co, 2011

Do We Have a Deal? | 16 March 2016 |

Page

19Slide20

Electronic Signatures – some cases – other forms of e-signing

Getup Ltd v Electoral Commissioner (2010) 189 FCR

165

The signing of an electronic document with a conventional signature but using a digital pen on a tablet is one of the few methods considered. The Federal Court held that this method satisfied a legislative requirement to provide a signed form. Justice

Perram noted, as an aside, that whilst such a method of signing could be subject to abuse through forging or manipulation of the signature, he could not discern any greater risk in this situation than with forms provided via fax or email scans.

Do We Have a Deal? | 16 March 2016 |

Page

20Slide21

Electronic Acceptance – Issues for the Future

Does the postal acceptance rule have a place in electronic contracts? - instantaneous communication or does it have parallels with letters – email versus

clickwrap

.Could the “last act” rule become more significant than notions of signatures? – Cheshire & FifootsWhat will emerge as the mainstream form of electronic contracts (and replace email scans of hard copy contracts)? –

Docusign, Echosign

Will digital signatures replace all signatures? –

eg

biometrics versus password, pins, signatures.

How will the law of contract deal with EDI and internet of things (law of agency)?

Do We Have a Deal? | 16 March 2016 |

Page

21Slide22

Tips for Practitioners

Focus on function over form when advising upon acceptances of contractual offers (

eg

agreement via email can be OK).If using an electronic method, ensure the method of acceptance is clearly agreed by parties (eg email agreement prior).Ensure the method of acceptance identifies the parties accepting (eg personal versus group email receipt).

Ensure an acceptance is linked to a clear set of terms that can’t be altered subsequently (eg pdf of whole document verses signing page only).

Do We Have a Deal? | 16 March 2016 |

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