Why You Should Think Before You Sign – Part II

This is the second
installment in a three part series exploring liability concerns and challenges
that we all risk facing by signing our name, clicking “I Agree,” or even simply
browsing or accessing a particular website.

Are Electronic Signatures (or e-signatures) Really Binding?

As more and more transactions take place via the internet, it is important for
individuals to understand, and be aware of, liability that may be associated
with electronically signing a document. Virginia, like many other states, has
adopted the Uniform Electronic Transactions Act (“UETA”); see Virginia Code § 59.1-479, et seq. The UETA makes it clear that, with few exceptions, one cannot contest the validity of a contract based solely upon one’s electronic signature. Rather, “if a law requires a signature, or provides for certain consequences in the absence of a signature, an electronic
signature satisfies the law.” Virginia Code § 59.1-485(d). Therefore, unless an
exception applies to the document in question, it is important to understand
that an electronic signature has the same strength and validity as a hard copy
signature.[1]

Additionally, not only does an electronic signature bind the signor, but the Fourth Circuit
Court of Appeals has held that by clicking “I Agree” at the end of an online
terms and conditions agreement, one has electronically signed that document and
is bound by its provisions; Metro. Reg’l Info. Sys., Inc. v. Am. Home Realty Network, Inc., Case No. 12-2102, 2013 WL 3722365 (4th Cir. July 17, 2013).

Wait, I’m Liable for JUST BROWSING Online?!

Now that you know that by clicking “I Agree” you consent to the terms and
conditions provided, whether you ignore them, scan them, or read them in detail
(which you should be doing after reading this article), would you be surprised to learn that you may be held to similar terms and conditions just based upon your visiting a popular online shopping site, or “accessing or using” a popular photograph sharing service? It’s true – based solely upon those acts, you may be held to the term and conditions of such site based upon a so-called “browsewrap agreement.” This type of agreement purports to
bind the website user to its terms and conditions, which are generally accessed
by clicking a hyperlink found, often, at the bottom of the first page of the
website, and for which there is no requirement that the user expressly agree or
assent to the terms. The key feature of such agreements is that, simply by
continuing to use the website, the user becomes bound by terms of the
agreement. See AvePoint, Inc. v. Power Tools, Inc., 981 F.Supp.2d 496, 510 (W.D.Va. 2013); and Cvent, Inc. v. Eventbrite, Inc., 739 F.Supp.2d 927, 937 (E.D.Va. 2010).

I can already hear your astonishment and disgust at the validity of such agreements
and, it seems, that some judges agree that it is not right to hold one to terms
and conditions that, more often than not, they have never read, and likely
never even noticed prior to accessing or using a particular website. While
there is not yet any Virginia caselaw specifically dealing with the validity of
browsewrap agreements, both the United States District Court for the Western
District of Virginia, Roanoke Division, and the United States District Court
for the Eastern District of Virginia, Alexandria Division , have indicated that
the existence, or lack thereof, of the website user’s “actual or constructive
knowledge of the site’s terms and conditions, and [manifestation of] assent to
them” is crucial in determining the validity of the agreement; Id. at 938. While making this
determination will be incredibly fact specific, the two cases cited above showcase circumstances in which the user was deemed to have actual or constructive knowledge of the site’s terms and conditions (AvePoint, Inc. v. Power Tools, Inc.) and when such knowledge was not deemed to have existed (Cvent, Inc. v. Eventbrite, Inc.). While this post will not delve into the details of those cases, I highly encourage you to review them for, if nothing else, a lesson in what not to do in these types of situations!

This series will wrap up next week with an exploration of how you may be personally liable
for the obligations of a contract even when signing as a business owner or
employee. There is often a good deal of confusion concerning this topic, so be
sure to check back for the final installment in Why You Should Think Before
You Sign.



[1] The UETA does not apply to certain
types of documents including, but not limited to, wills, codicils, testamentary
trusts, and many provisions related to the U.C.C.

Leave a Reply