By Christopher J. Hanlon Esq. of Hanlon and Niemann P.C.
With the continuing evolution of digital technology, opportunities are available to many businesses to enter into contracts with parties electronically. In fact, given the internet – savvy public’s desire to take advantage of the efficiency of electronic communications, maintaining a competitive advantage may require that anyone marketing any product (including housing) make electronic signatures an available option for contract execution. Many other businesses use this process already.
To facilitate this advance in digital communications, Congress enacted, and on June 30, 2000, President Clinton signed, the Electronic Signatures in Global and National Commerce Act (“E.S.G.N.C.A.”), 15 U.S.C.A. §7001. That law provides that “a signature, contract, or other record may not be denied effect, validity or enforceability solely because it is in electronic form.” Where some other law requires that information be made available to a consumer in writing (such as a window guard notice in an apartment rental) the information may be provided electronically where the consumer consents affirmatively after having received a “conspicuous statement” detailing the consumer’s rights.
If e-signatures on contracts are going to be used effectively, E.S.G.N.C.A. requires the digital data must be stored and reproducible. The Federal Law provides that where some other law requires that a contract be in writing, enforceability of an electronic record of such contract may be denied where the electronic record is not in the form capable of being “retained and accurately reproduced.”
This is a federal law. Usually a federal law will take precedence over, or “pre-empt” state statutes. Not so with E.S.G.N.C.A. Congress has provided an exception to the Pre-emption Doctrine. Congress specifically allows States to enact statutes which would modify, limit or supersede the other provisions of E.S.G.N.C.A. That means a State could enact its own law invalidating e-signatures, or, more likely, requiring more than an e-signature in certain circumstances. New Jersey has not done that.
While there is no case that this author could find on point dealing with the enforceability of e-signatures on residential leases, other cases have ruled that electronic signatures are enforceable. These have precedential value in considering the enforceability of leases executed electronically. That was the case where a Court in another state has ruled that an email satisfies the Uniform Commercial Codes Statute of Frauds.
In the only case this author could find close to the subject matter in New Jersey, Selco Partnership v. Verizon Wireless, 2010 W.L. 1644957 (App. Div. 2010), the Appellate Division enforced an arbitration clause in a cellular telephone service contract which had been signed by the consumer with an electronic signature. This case supports the proposition that electronic signatures in leases would likewise be enforceable.
Screening prospective residents remains a high priority for most housing providers. However, those property owners looking for a competitive advantage in the digital age may want to use the option of electronic execution of documents to continue to take advantage of this efficiency in their marketing process. New Jersey law supports the use of this option.
Christopher J. Hanlon Esq. of Hanlon and Niemann P.C. a law firm located in Freehold, NJ. With over 30 year of practicing lawmost of his experience is in the formal prosecution and defense of claims on behalf of clients. He has litigated cases in the United States Supreme Court, United States Court of Federal Claims, Third Circuit Court of Appeals, United States District Court, and the New Jersey Supreme Court. He has a wealth of experience, having litigated dozens of cases in the Appellate Division of the Superior Court of the State of New Jersey, as well as every Trial Level Court throughout the State, the Office of Administrative Law, Tax Court and Workers Compensation Court. He is an arbitrator for the United States Federal District Court and has been involved in numerous mediations and contested arbitration matters representing clients. He also represents clients before Municipal Boards of various types, including Planning, Zoning and Rent Control. Most of his litigation has focused on personal injury, real estate related litigation, constitutional law, rent control, (including Mount Laurel issues), and commercial litigation. He can be reached via telephone at (732) 863-9900 x108 or via e-mail at chanlon@hnlawfirm.com