February 25, 2012

Signatures on fax & email - if you did not intend to be bound, why did you bother to write it?

(Cambridge University Press writes:)

Electronic Signatures in Law is now its third edition (published in January 2012 by Cambridge University Press). This edition provides an exhaustive discussion of what constitutes an electronic signature, the forms an electronic signature can take and the issues relating to evidence, formation of contract and negligence in respect of electronic signatures.

Case law from a wide range of common law and civil law jurisdictions is analysed to illustrate how judges have dealt with changes in technology in the past and how the law has adapted in response.

For those who are unfamiliar, Stephen Mason's tome is *the comprehensive text* dealing with how cryptographic digsigs and other forms of technology interact with the law of agreement and contract. It's big, expensive, authoritative, and essential -- I've reached for my 2nd Edition dozens of times to resolve real dilemmas in business and tech.

And on this occasion, Stephen Mason has written a short essay on why real-life signing and agreement can be simplified from the idealistic view of the cryptographers:

Signatures on facsimile transmissions and e-mail

By Stephen Mason

The manuscript signature has a number of purposes, one of which is to provide evidence that the signatory approves and adopts the contents of the document, and that the content of the document is binding (for a more detailed discussion of the various purposes of the signature see chapter 1 of Stephen Mason, Electronic Signatures in Law (3rd edn, Cambridge University Press, 2012)). It is also possible to use a signature as a means of authentication, although what has become important in the virtual world is the process of verification, which Bruce Schneier illustrates in his article in Wired, ‘Why Do We Accept Signatures by Fax?’[1] dated 29 May 2008.

A signature sent by facsimile transmission is a mechanical mark, and the cases relating to facsimile transmissions (with one exception, for which see below) reach the same conclusions as for the telegram cases: that a name typed or written and then communicated over a telegram wire or telephone line is capable of proving intent. Evidence of intent is the point. Security is not the issue. Security has never been the issue in common law countries. Judges make decisions based on the way people in business conduct their affairs. If the record is signed with the requisite intent, that is sufficient.

Concern for the security of the signature largely came about because we started trusting the communications between bits of software. However, from the practical point of view, people in business have again left the issue of security behind. Millions of contracts are entered over the internet every day using a popular form of electronic signature – the ‘I accept’ icon. In such cases, the seller is only interested in whether the buyer is good for the money.

There is one case that does not follow the decisions of the other judges. In the New York case of Parma Tile Mosaic & Marble Co., Inc. v. Estate of Fred Short, d/b/a Sime Construction Co [2], it was decided that the automatic imprinting by the facsimile machine of the name of the sender at the top of each page transmitted did not satisfy the requirement under the Statute of Frauds that writing shall be subscribed.

I suggest that this decision was not correct (for my reasoning, see pp 80 – 81). On reflection, I have further concluded that the decision is also not correct because of the case law relating to the use of a printed name (see pp 39 – 48), where the name printed on a letterhead has been held to be a signature by judges in England and the United States of America.

The reasoning is as follows: a human being instructs a printer to print letterheads as official stationery. When the person or legal entity sends out an item of stationery with their details printed on the paper, they are stating who they are, and that they are responsible for the contents recorded on the paper. It is the same for facsimile transmissions. A human being programmes the machine to print the same information contained on the letterhead of a piece of stationery, and the information is printed on the paper that emerges from the recipient’s machine. Conceptually, there is no difference between the stationery and the facsimile transmission. Naturally, both can be misused or forged, but these are separate issues.

The same can be said of a form of electronic signature that is widely used: typing the name in an e-mail. Judges from across the world have accepted this form of electronic signature (see pp 193 – 215 for case law). In business, the general practice is to write a ‘signature’ or a number of different ‘signatures’ into the e-mail software, each to be used for a particular purpose. The user then instructs the software to include the signature block each time they send an e-mail.

That this signature block is included automatically is not relevant to the issue as to whether the person intended to sign the e-mail or not. What is relevant is whether, when writing and sending the e-mail, they intended to be bound by the contents. If they did not intend to be bound by the content of the e-mail, why did they bother writing it?


[1] http://www.schneier.com/essay-220.html. See also a discussion at Financial Cryptography: http://financialcryptography.com/mt/archives/001056.html.

[2] 155 Misc.2d 950, 590 N.Y.S.2d 1019 (Supp. 1992), motion for summary judgment affirmed, 209 A.D.2d 495, 619 N.Y.S.2d 628 reversed 663 N.E.2d 633 (N.Y. 1996), 640 N.Y.S.2d 477 (Ct.App. 1996), 87 N.Y.2D 524).

© Stephen Mason, 2012

Electronic Signatures in Law, 3rd Edition
Author: Stephen Mason, Chambers of Stephen Mason
Format: Hardback
Series: Law Practitioner Series
ISBN: 9781107012295
Publication date:January 2012
Extent: 408 pages

Posted by iang at February 25, 2012 08:35 AM | TrackBack
Post a comment

Remember personal info?

Hit preview to see your comment as it would be displayed.