Digital Signatures in Construction Contracts: Are They As Good As the Real Thing?
A few months ago, I did a webinar on project documentation. At the end of the webinar, one of the participants asked, Are digital signatures as good as hard copy signatures?
I addressed this exact question in a feature article that I wrote for ABC's Construction Executive magazine on the paperless construction project. In the end, the question raises issues involving both contract formation and evidentiary proof.
As to contract formation, some commentators have found a distinction between an electronic signature and a digital signature. However, the real issue depends on whether the parties manifested an intent to be bound by the contract provisions. If it can be shown that the digital marking ... whether by affixing an image of a signature, typing the name of the party on the signature line, or clicking an "I accept the terms of the agreement" button ... then it is likely that the signature will form a valid and enforceable contract.
The next question involves one of proof: Is an electronic document more likely to prove a claim than a hard copy document? The courts respond differently. One appeals court in Montana has held that an email was sufficient to support a finding of increased costs for a change order, while another court in North Carolina concluded that an email promising additional work was not an enforceable contract for purposes determining whether a change order was valid. A case in Florida demonstrates that an electronically faxed release was not the same as the original document because one party demanded the original to be provided.
An electronic document can be the basis of a contract. A digital photograph can be used to demonstrate installed quantities. An electronic schedule (and its logic ties) can be used to impeach a witness. Ultimately, the form of the document may not have as great an impact as the intended purpose of the document.
