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Faxed Contracts
As has been pointed out, the law on what the legal requirement for creation of an enforceable contract may vary from state to state and country to country. In the past, the absence of a signed original agreement could very well have been the basis for a claim that a valid contract never existed. More recently, however, courts have come to accept facsimile documents in place of originals, and some courts have even permitted filing facsimiles as official court documents. However, I am sure that in those jurisdictions, the rule would require the sending of an original signed document also. Even if a court were to find that a contract did not exist because of the lack of a valid signature, that does not necessarily end the matter, however. There are other legal and equitable doctrines that could nevertheless come into play to protect the party who relied to its detriment on the faxed document and the course of dealing. As a practical matter, the issue will rarely have any significance, unless, of course, you ever find yourself in a litigation over a contract. Then you can be sure that lawyers will try to take advantage of anything they can. So, while my guess is that in most cases, in most jurisidictions with a well-developed commercial practice, faxed, signed agreements are enforceable, as has been been stated several times here, the best advice is to consider a faxed agreement enforceable, but to arrange to have original signed copies just in case. I know this is a pain, but until the law catches up with practice, it is a wise precaution. One way that might work to get around this problem is to include a clause in the contract that says that no party will challenge the validity of a signed faxed copy on the basis of the lack of an original signature. This is free advice, so take it for what it is worth. The issue will come up again as people and businesses use email and electronic transfer of information more and more to conduct business. Then the issue will be whether a so-called digital signiture is valid. As to the lag time between receiving the fax and the signed original, the issue really is the same. If a jurisdiction accepts a fax as a valid contract, then the time lag is irrelevant. If it does not, then there is a chance that if a party were to somehow repudiate a contract effectively before the signed original arrived, that may be effective to get that person out of the contract. However, if the other party were to rely on the faxed document, there are other equitable doctrines that might come into play to protect that party for any harm that might result from relying on the fax. Although some states have consumer protection laws for certain products that permit the buyer to rescind the contract (even an original, signed one) for a certain number of days after purchase, I doubt that such laws would apply to contracts between large commerical and academic institutions, which are presumed to have access to competent counsel. You ask a simple question, and this is what you get. Lawyers! Very truly yours, Rodney L. Stenlake 655 Orange Street, Unit 5 New Haven, Connecticut 06511 rodney.stenlake@yale.edu
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