Are e-Mail Signatures in New York Real Estate Transactions Legally Binding Yet?

Electronic signatures in general, and e-mail signatures (i.e., a typed name at the bottom of an e-mail) in particular, are widely recognized as legally binding in a variety of legal contexts, and the federal government and many states recognize electronic signatures as legally binding for the purpose of real estate transactions. New York State remains one of the few in which there is no legislation allowing for the use of electronic signatures for the purpose of creating a contract for the sale of real property. New York case law is divided on this issue, and thus fails to provide a clear answer as to whether an e-mail signature or other electronic signature may be used for documents related to real property.

New York State Legislation Governing Electronic Signatures

The Electronic Signatures and Records Act (ESRA), N.Y. State Tech. Law secs. 301-309, effective as of March 27, 2000, governs the use of electronic signatures in New York State. ESRA provides that unless specifically provided otherwise by law, signatures made via electronic means “shall have the same validity and effect as the use of a signature affixed by hand.” According to the act, the decision to accept an electronic signature is completely voluntary, and no one is required to use an electronic signature unless otherwise provided by law.

ESRA defines an electronic signature as “an electronic sound, symbol, or process, attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the record.” Id., sec. 302(3). Although ESRA does not specifically mention e-mail signatures, the act's broad definition of “electronic signatures” can be interpreted to include e-mail signatures. The ESRA Guidelines promulgated by the New York State Office for Technology on May 26, 2004, note that ESRA's definition of an “electronic signature” affords the parties to an electronic transaction “the greatest possible flexibility in selecting an appropriate e-signature solution.” New York State Office for Technology, Electronic Signatures and Records Act (ESRA) Guildelines (May 26, 2004) pg.8 (available at www.oft.state.ny.us/G04-001/G04-001.pdf). The Guidelines further explain that “ESRA provides that a very wide range of digital objects may serve as an e-signature. These objects can be as simple as a set of keyboard characters ' .” Id. at 9. Given the act's broad definition, an e-mail signature will have the full effect of a hand-written signature under ESRA assuming it meets the other requirements outlined in the act (i.e., it was executed with the intent to sign the record).

This rule, however, is subject to certain limitations contained within Section 307 of ESRA. Section 307 provides that ESRA shall not apply to certain classes of documents, including, among other things, any conveyance or other instrument recordable under Article 9 of the NYS Real Property Law.

The New York General Obligations Law (GOL) also governs electronic signatures. Section 5-701(b)(4) of the GOL provides that:

the tangible written text produced by telex, telefacsimile, computer retrieval or other process by which electronic signals are transmitted by telephone or otherwise shall constitute a writing and any symbol executed or adopted by a party with the present intention to authenticate a writing shall constitute a signing (emphasis added).

One could therefore reasonably conclude that an e-mail signature attached by a party with the intention to authenticate the text contained within an e-mail constitutes a signature under the GOL. Of course, general contract law principles will apply to the e-mail “signed” with an e-mail signature, and thus, the question of whether an e-mail with a typed name at the bottom constitutes a legally binding final agreement will depend upon the intent of the parties, i.e., whether the circumstances indicate that a final mutual agreement was reached. Leist v. Tugendhaft, 882 N.Y.S.2d 521 (2nd Dept. 2009).

It is unclear, however, if Section 5-701(b)(4) applies to real estate contracts. This is because conveyances and contracts concerning real property are dealt with separately in Section 5-703 of the GOL. Section 5-703 provides that certain conveyances and contracts concerning real property must be in writing, but contains no provision authorizing electronic signatures, as does Section 5-701.

New York State Case Law

Numerous New York courts have held that e-mail signatures are considered “signed writings” within the meaning of the Statute of Frauds. Most of these cases, however, do not involve real property transactions.

Thus, in the recent case of Williamson v. Delsener, 874 N.Y.S.2d 41 (1st Dept. 2009) the First Department held that e-mails exchanged between counsel which contained their printed names at the end were “signed writings” within the meaning of the Statute of Frauds, and thus entitled the plaintiff to a judgment based on a settlement agreed to in the e-mails. Similarly, in Stevens v. Publicis, 854 N.Y.S.2d 690 (1st Dept. 2008) the court held that the plaintiff's e-mails in which he accepted a proposed modification of his employment agreement constituted “signed writings” within the meaning of the Statute of Frauds. The court found that “[t]he e-mails from plaintiff constitute 'signed writings' within the meaning of the Statute of Frauds, since plaintiff's name at the end of his e-mail signified his intent to authenticate the contents ' ” Id. at 692. The court further found that the parties' typed names at the end of the e-mails satisfied the requirements of the employment agreement that any modification be signed by all parties.

In real property cases, however, courts are divided as to whether an electronic signature, such as an e-mail one, is legally binding, and the issue has never been addressed directly by a higher court.

In Rosenfeld v. Zerneck, 776 N.Y.S.2d 458 (2004), Justice Herbert Kramer of New York State Supreme Court (Kings County) held that although e-mails between the seller and purchaser were insufficient to satisfy the writing requirement of New York's Statute of Frauds because they lacked several essential terms of the transaction, an e-mail signature sent by the defendant to the plaintiff accepting the plaintiff's offer to purchase real property does fulfill the writing requirement of the Statute of Frauds, citing Section 5-701(b)(4) of the GOL. As previously mentioned, GOL Section 5-701(b)(4) provides that electronic submissions executed with the intent to authenticate a writing constitutes a writing and signing.

However, in Vista Developers v. VFP Realty, 847 N.Y.S.2d 416 (2007) a later case decided by Justice Joseph P. Dorsa of New York State Supreme Court (Queens County), the court held that GOL Section 5-701(b)(4) does not apply to “conveyances and contracts concerning real property,” which are governed by GOL Section 5-703, and therefore do not fall within the realm of the provisions concerning electronic transmissions. The court held that the apparent intent of the legislature was to amend the method for establishing agreements required to be in writing, but not those involving contracts and conveyances regarding real property, which are dealt with separately in Section 5-703. The court explained that “the purpose of the Statute of Frauds is to remove uncertainty, and to distinguish in real estate sales, provisional agreements to agree from final binding contracts.” Id. at 421.

Vista Developers concerned a contract for the sale of a house, and Rosenfeld concerned an offer letter for the purchase of real property. At present there are no New York court decisions regarding the use of electronic signatures for other real estate documents, such as brokerage agreements.

Trends Elsewhere

States other than New York have recognized the validity of e-mail signatures in real property transactions. The Uniform Electronic Transaction Act (UETA) (1999), which has been adopted in all but four states authorizes electronic signatures in real estate transactions. See http://www.law.upenn.edu/bll/archives/ulc/fnact99/1990s/ueta99.pdf (Prefatory Note). Numerous states have case law indicating that e-mail signatures may be sufficient to consummate the conveyance of real property. See, e.g. Brantley v. Wilson, 2006 WL 436121 (W.D.Ark. 2006); Shattuck v. Klotzbach, 14 Mass.L.Rptr. 360 (Mass. Super. 2001). Moreover, the federal Electronic Signatures ion Global and National Commerce Act (ESIGN Law), 15 U.S.C. sec. 7001 et seq., authorizes electronic signatures and applies to real property transactions (sec. 106(13)(B)), albeit only those affecting interstate or foreign commerce.

Conclusion

Electronic signatures, and e-mail signatures in particular, are widely recognized as viable alternatives to hand-affixed signatures. When dealing with documents related to real property transactions, however, there is no such widespread acceptance of electronic signatures in New York, and thus it cannot be said for certain that an e-mail signature would be sufficient to effectuate a contract for the sale of real property in New York. Most other states are signatories to the UETA, which provides that electronic signatures are to be recognized for the purposes of real estate transactions.

Of course, when examining the validity of e-mail signatures, one must remember that an e-mail that fails to include all of the material terms will not be regarded by the courts as a valid contract, despite the fact that an e-mail signature was attached to the bottom of the e-mail.

Mindy H. Stern is a member of Schoeman, Updike & Kaufman, LLP, Ronit D. Appel is an associate of the firm.

Electronic signatures in general, and e-mail signatures (i.e., a typed name at the bottom of an e-mail) in particular, are widely recognized as legally binding in a variety of legal contexts, and the federal government and many states recognize electronic signatures as legally binding for the purpose of real estate transactions. New York State remains one of the few in which there is no legislation allowing for the use of electronic signatures for the purpose of creating a contract for the sale of real property. New York case law is divided on this issue, and thus fails to provide a clear answer as to whether an e-mail signature or other electronic signature may be used for documents related to real property.

New York State Legislation Governing Electronic Signatures

The Electronic Signatures and Records Act (ESRA), N.Y. State Tech. Law secs. 301-309, effective as of March 27, 2000, governs the use of electronic signatures in New York State. ESRA provides that unless specifically provided otherwise by law, signatures made via electronic means “shall have the same validity and effect as the use of a signature affixed by hand.” According to the act, the decision to accept an electronic signature is completely voluntary, and no one is required to use an electronic signature unless otherwise provided by law.

ESRA defines an electronic signature as “an electronic sound, symbol, or process, attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the record.” Id., sec. 302(3). Although ESRA does not specifically mention e-mail signatures, the act's broad definition of “electronic signatures” can be interpreted to include e-mail signatures. The ESRA Guidelines promulgated by the New York State Office for Technology on May 26, 2004, note that ESRA's definition of an “electronic signature” affords the parties to an electronic transaction “the greatest possible flexibility in selecting an appropriate e-signature solution.” New York State Office for Technology, Electronic Signatures and Records Act (ESRA) Guildelines (May 26, 2004) pg.8 (available at www.oft.state.ny.us/G04-001/G04-001.pdf). The Guidelines further explain that “ESRA provides that a very wide range of digital objects may serve as an e-signature. These objects can be as simple as a set of keyboard characters ' .” Id. at 9. Given the act's broad definition, an e-mail signature will have the full effect of a hand-written signature under ESRA assuming it meets the other requirements outlined in the act (i.e., it was executed with the intent to sign the record).

This rule, however, is subject to certain limitations contained within Section 307 of ESRA. Section 307 provides that ESRA shall not apply to certain classes of documents, including, among other things, any conveyance or other instrument recordable under Article 9 of the NYS Real Property Law.

The New York General Obligations Law (GOL) also governs electronic signatures. Section 5-701(b)(4) of the GOL provides that:

the tangible written text produced by telex, telefacsimile, computer retrieval or other process by which electronic signals are transmitted by telephone or otherwise shall constitute a writing and any symbol executed or adopted by a party with the present intention to authenticate a writing shall constitute a signing (emphasis added).

One could therefore reasonably conclude that an e-mail signature attached by a party with the intention to authenticate the text contained within an e-mail constitutes a signature under the GOL. Of course, general contract law principles will apply to the e-mail “signed” with an e-mail signature, and thus, the question of whether an e-mail with a typed name at the bottom constitutes a legally binding final agreement will depend upon the intent of the parties, i.e., whether the circumstances indicate that a final mutual agreement was reached. Leist v. Tugendhaft , 882 N.Y.S.2d 521 (2nd Dept. 2009).

It is unclear, however, if Section 5-701(b)(4) applies to real estate contracts. This is because conveyances and contracts concerning real property are dealt with separately in Section 5-703 of the GOL. Section 5-703 provides that certain conveyances and contracts concerning real property must be in writing, but contains no provision authorizing electronic signatures, as does Section 5-701.

New York State Case Law

Numerous New York courts have held that e-mail signatures are considered “signed writings” within the meaning of the Statute of Frauds. Most of these cases, however, do not involve real property transactions.

Thus, in the recent case of Williamson v. Delsener , 874 N.Y.S.2d 41 (1st Dept. 2009) the First Department held that e-mails exchanged between counsel which contained their printed names at the end were “signed writings” within the meaning of the Statute of Frauds, and thus entitled the plaintiff to a judgment based on a settlement agreed to in the e-mails. Similarly, in Stevens v. Publicis , 854 N.Y.S.2d 690 (1st Dept. 2008) the court held that the plaintiff's e-mails in which he accepted a proposed modification of his employment agreement constituted “signed writings” within the meaning of the Statute of Frauds. The court found that “[t]he e-mails from plaintiff constitute 'signed writings' within the meaning of the Statute of Frauds, since plaintiff's name at the end of his e-mail signified his intent to authenticate the contents ' ” Id. at 692. The court further found that the parties' typed names at the end of the e-mails satisfied the requirements of the employment agreement that any modification be signed by all parties.

In real property cases, however, courts are divided as to whether an electronic signature, such as an e-mail one, is legally binding, and the issue has never been addressed directly by a higher court.

In Rosenfeld v. Zerneck , 776 N.Y.S.2d 458 (2004), Justice Herbert Kramer of New York State Supreme Court (Kings County) held that although e-mails between the seller and purchaser were insufficient to satisfy the writing requirement of New York's Statute of Frauds because they lacked several essential terms of the transaction, an e-mail signature sent by the defendant to the plaintiff accepting the plaintiff's offer to purchase real property does fulfill the writing requirement of the Statute of Frauds, citing Section 5-701(b)(4) of the GOL. As previously mentioned, GOL Section 5-701(b)(4) provides that electronic submissions executed with the intent to authenticate a writing constitutes a writing and signing.

However, in Vista Developers v. VFP Realty , 847 N.Y.S.2d 416 (2007) a later case decided by Justice Joseph P. Dorsa of New York State Supreme Court (Queens County), the court held that GOL Section 5-701(b)(4) does not apply to “conveyances and contracts concerning real property,” which are governed by GOL Section 5-703, and therefore do not fall within the realm of the provisions concerning electronic transmissions. The court held that the apparent intent of the legislature was to amend the method for establishing agreements required to be in writing, but not those involving contracts and conveyances regarding real property, which are dealt with separately in Section 5-703. The court explained that “the purpose of the Statute of Frauds is to remove uncertainty, and to distinguish in real estate sales, provisional agreements to agree from final binding contracts.” Id. at 421.

Vista Developers concerned a contract for the sale of a house, and Rosenfeld concerned an offer letter for the purchase of real property. At present there are no New York court decisions regarding the use of electronic signatures for other real estate documents, such as brokerage agreements.

Trends Elsewhere

States other than New York have recognized the validity of e-mail signatures in real property transactions. The Uniform Electronic Transaction Act (UETA) (1999), which has been adopted in all but four states authorizes electronic signatures in real estate transactions. See http://www.law.upenn.edu/bll/archives/ulc/fnact99/1990s/ueta99.pdf (Prefatory Note). Numerous states have case law indicating that e-mail signatures may be sufficient to consummate the conveyance of real property. See, e.g. Brantley v. Wilson, 2006 WL 436121 (W.D.Ark. 2006); Shattuck v. Klotzbach , 14 Mass.L.Rptr. 360 (Mass. Super. 2001). Moreover, the federal Electronic Signatures ion Global and National Commerce Act (ESIGN Law), 15 U.S.C. sec. 7001 et seq., authorizes electronic signatures and applies to real property transactions (sec. 106(13)(B)), albeit only those affecting interstate or foreign commerce.

Conclusion

Electronic signatures, and e-mail signatures in particular, are widely recognized as viable alternatives to hand-affixed signatures. When dealing with documents related to real property transactions, however, there is no such widespread acceptance of electronic signatures in New York, and thus it cannot be said for certain that an e-mail signature would be sufficient to effectuate a contract for the sale of real property in New York. Most other states are signatories to the UETA, which provides that electronic signatures are to be recognized for the purposes of real estate transactions.

Of course, when examining the validity of e-mail signatures, one must remember that an e-mail that fails to include all of the material terms will not be regarded by the courts as a valid contract, despite the fact that an e-mail signature was attached to the bottom of the e-mail.

Mindy H. Stern is a member of Schoeman, Updike & Kaufman, LLP, Ronit D. Appel is an associate of the firm.