Yes. Electronic signing of contracts is generally legal and enforceable in Texas. The Texas Uniform Electronic Transactions Act (UETA), found in Business & Commerce Code Chapter 322, gives electronic records, electronic signatures, and electronic contracts legal recognition. A contract generally cannot be denied legal effect merely because it was created or signed electronically. However, the parties must satisfy applicable contract requirements, and some documents are excluded from UETA or have additional formalities.
What Is an Electronic Signature?
Texas law defines an electronic signature broadly as an electronic sound, symbol, or process attached to or logically associated with a record and adopted by a person with the intent to sign it. This can include a typed name, a signature drawn on a screen, or a signature created through an electronic-signature platform.
The important issue is whether the electronic act was intended to authenticate or sign the document. Texas law expressly recognizes this form of signing.
Are Electronic Contracts Enforceable?
Yes. Section 322.007 provides that an electronic record or signature cannot be denied legal effect or enforceability solely because it is electronic. It also states that a contract cannot be denied legal effect merely because an electronic record was used in its formation. If another law requires a record to be in writing or a signature, an electronic record or electronic signature generally satisfies that requirement.
The parties must still form a valid contract, including any applicable requirements concerning offer, acceptance, consideration, capacity, and the statute of frauds.
Do Both Parties Have to Agree to Electronic Transactions?
Generally, yes. Texas UETA applies to transactions between parties who have agreed to conduct transactions electronically. That agreement can be determined from the surrounding circumstances and the parties’ conduct.
Businesses should therefore make their electronic-signature procedures clear and preserve evidence showing the parties’ agreement to transact electronically.
What About Real Estate Contracts?
Electronic signatures can be particularly important in Texas real estate transactions. Texas law recognizes electronic real-property documents, and Chapter 15 of the Property Code addresses electronic recording.
If a law requires a document to be signed as a condition of recording, Section 15.004 provides that an electronic signature can satisfy the signature requirement. It also addresses electronic notarization, acknowledgment, verification, witnessing, and oaths.
Can an Electronic Signature Be Notarized?
Yes, when applicable requirements are satisfied. Texas law recognizes electronic notarization and online notaries. An electronic notarial certificate can include the online notary’s electronic signature, seal, commission information, and other required details.
Not every electronically signed document requires notarization, while some instruments may require acknowledgment or another formal act before recording.
Are All Documents Eligible for Electronic Signing?
No. Texas UETA contains exclusions. Certain transactions and documents are outside its scope, and other laws may impose special requirements. For example, the Texas Secretary of State explains that wills, codicils, and testamentary trusts are excluded from UETA and cannot simply be executed through electronic signing or online notarization.
Accordingly, parties should not assume that an electronic signature is sufficient for every legal document.
What If Someone Denies Signing?
An electronic signature is not automatically conclusive proof that a particular person signed a contract. If a signer later disputes the signature, the parties may need evidence showing authentication and intent.
Electronic-signature platforms can preserve signing dates, authentication records, document versions, and audit trails. Texas law also provides that electronic records and signatures are not excluded from evidence merely because they are electronic.
Maintaining the original electronic document and related transaction records can therefore be important if enforceability later becomes disputed.
Can a Contract Require a Handwritten Signature?
Yes. Texas UETA generally facilitates electronic transactions; it does not force a person or business to use electronic signatures. Parties can agree to require handwritten signatures or other procedures when appropriate.
The contract’s terms and the parties’ agreed signing process should therefore be reviewed before assuming that electronic signing is acceptable.
Conclusion
Electronic signing of contracts is generally legal in Texas. Under the Texas Uniform Electronic Transactions Act, electronic records, signatures, and contracts generally receive legal recognition, and they cannot be rejected solely because they are electronic. The parties must still satisfy ordinary contract requirements and any special rules governing the particular document.
Real estate transactions can also be completed electronically in many circumstances, and Texas law expressly provides for electronic real-property recording and electronic notarization. Nevertheless, important exclusions exist, including certain estate-planning documents such as wills and codicils.
Businesses and individuals should preserve the signed electronic document, audit trail, communications, and other evidence establishing who signed and intended to be bound. For significant transactions, reviewing the applicable statute and contract requirements with a Texas attorney can help prevent enforceability disputes.
