Under US law, the creation of a signature includes an element of intent. For example, Article 1 of the Uniform Commercial Code defines a signature to include "any symbol executed or adopted with the present intention to adopt or accept a writing." ESIGN and UETA both adopt this emphasis on intent to the digital environment by defining an electronic signature as "an electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record." Failure to establish intent means that while the person's actions may manifest assent to, or agreement with, a record, the record has not been signed. If the intent is not established and the underlying law governing the transaction requires that the record is signed, then the record may not be enforceable.
Because the intent requirement originated in the era of manual signatures – where the conventions used to manifest intent are well established, such as signing in ink on a signature line at the end of a document – companies employing electronic signatures have often needed to create new conventions to prove intent. Frequently, websites and mobile apps rely on a "process" eg, a click-through or check-box action by the signer captured as part of a computer audit log to create an electronic signature. Conventions created that help establish intent for such signatures include replicating the manual signing process (entering the signer's name on a signature line in a record), or placing language in immediate proximity to a checkbox or "I Agree" button informing the signer that by taking the requested action the signer is creating an electronic signature.
Not only must the process used demonstrate the signer's intent, but the company using the process must later be able to prove such intent if the signature is challenged. To do so, the party seeking to enforce the signature will need to keep accurate records, including a tamper-evident audit log (see a previous analysis on the importance of audit logs here) and copies of records eg, screenshots of the "Agree" language representing all relevant steps that the signer took to create the signature and demonstrate intent. Failure to have records establishing intent may undermine the ability to enforce a contract.
A recent Ninth Circuit case (covered briefly here) highlights the dangers that companies face if the process used for creating or memorializing an electronic signature are inadequate. In Carlos v. Patenaude & Felix A.P.C., 2018 WL 2714576 (D. Oreg. 2018), the defendant filed a lawsuit on behalf of a national bank seeking to collect on defaulted credit card debt, and the issue was whether Virginia's five year statute of limitations for written contracts applied. Per a Virginia Attorney General advisory opinion, the statute of limitations for written contracts applied to credit card agreements when the agreement consists of a series of documents where at least one of the documents incorporating the others was signed by the cardholder. The court concluded that there existed a triable issue of material fact as to whether the credit card agreement was signed, and thus whether it constituted a written contract.
While the defendant made three arguments that the plaintiff signed the cardholder agreement, none of which were convincing to the court, the first two arguments were the most important for demonstrating the importance of establishing intent in an electronic environment. First, the defendant argued that the plaintiff signed the agreement when he submitted his application online. In support of that argument, defendant offered a declaration from an employee stating that the consumer must click a box affirming that the consumer read the disclosures. The defendant further offered screenshots showing that plaintiff signed something, but with no indication of what the plaintiff signed. The court highlighted that the defendant did not provide a screenshot depicting the screen the plaintiff would have seen when submitting his application. The plaintiff claimed that he did not sign anything. The court concluded that because the parties submitted conflicting testimony – noting that the defendant only offered "circumstantial evidence" – there was a genuine issue of material fact as to whether the plaintiff signed the agreement.
Second, the defendant argued that the plaintiff electronically signed the agreement when he activated his account over the phone using an automated system. While the court noted that such a process constitutes acceptance of the terms, the court stated that the defendant failed to show that such a process created an electronic signature.
In short, a jury may ultimately conclude that the defendant's process created an electronic signature, upon consideration of all the evidence. But because the defendant's online contracting process did not provide clear evidence demonstrating the plaintiff's intent to sign, the court ruled that there was a triable issue as to that fact.