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
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Slide1Slide2
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
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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
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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.
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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.
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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.
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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
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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
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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
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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.
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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
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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
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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 |
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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.
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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
?
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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.
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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.
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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
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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.
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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)?
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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).
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