With technological advancements and business interactions through electronic communication, it is also natural to want electronic contracts as well. Given social distance guidelines and remote working, more businesses have shifted to electronic contracts. In this article, we will discuss what you need to know about electronic contracts that could impact your business.
What is a Contract?
A contract is an agreement between two or more parties exchanging goods and/or services for something of value.
What Makes a Contract Binding?
The courts hold that for a binding contract, it must have at least four elements:
- Offer
- Acceptance
- Intent
- Consideration
What is an Offer?
Under contract law, an offer is something that a party wishes to sell to another party in exchange for goods and/or services. The party that makes the offer is “the offeror”. The party that receives the offer is “the offeree”.
What is an Acceptance?
When a party or offeree agrees to the offer made by the offeror, this is called acceptance. When the offeree accepts the offer, they become known as the acceptee. The offer and acceptance are the two most basic forms of the contract. For the acceptance to be considered valid, however, there has to be a meeting of the minds between the offeror and the acceptee. This means that both parties understood what they were offering and accepting and did not have any disadvantage of coming to the agreement.
What is Intent?
Under contract law, both parties of the agreement must have an intent to abide by the terms of the agreement.
What is Consideration?
Under contract law, consideration is something the two parties agree has a value that is given by one party to the other in exchange for something else the two parties agree has a value. For example, one party agrees to sell a car to another party in exchange for cash. In this situation, both the car and the cash have value to the parties involved and therefore are considered a consideration.
Can a Contract Be Electronic?
Yes, the courts have ruled that electronic contracts that meet the basic elements under contract law have a binding effect. Florida courts have adopted the Uniform Electronic Transactions Act (UETA) which recognized electronic signatures to have the same legal effect as handwritten signatures. Florida Statute 668.50(7)(b) codifies the UETA and states, “a contract may not be denied legal effect or enforceability solely because an electronic record was used in the formation of the contract.” Additionally, Florida courts have held that the signature can be any symbol that is intended to mark the agreement as binding.
Need Assistance With an Electronic Contract
If you need assistance interpreting or creating an electronic contract for your small business, contact Thompson Law for a consultation. The attorneys at Thompson Law have years of experience in drafting and interpreting contract law and can ensure that the document will be upheld in case of a breach.