Time is money in the construction and real estate industries, so even when it is sage advice to document agreements, changes, and conversations in writing, the reality is that projects and deals often move so quickly that it is impractical, if not impossible, to do so by traditional means and methods. The growth of electronic communications has made this easier, however. And utilizing electronic means of communicating and documenting agreements is not only permissible, in many instances it is critical to keeping a project or deal on target.
The Uniform Electronic Transactions Act (UETA) is a uniform act that has been adopted by most states, including Minnesota (Minn. Stat. Ch. 325L). The act gives legal recognition to electronic signatures and contracts if the parties agreed to conduct business electronically. The parties do not have to make an express statement to transact business electronically. There agreement can be gleaned from the parties’ conduct. In the construction and real estate industries, it can streamline and speed up business.
One purpose of the UETA is to keep conducting business up to date with technological advancements and the practical realities of how business is performed these days. The UETA removes barriers to electronic commerce, and it likely plays a role in how you do business without you even knowing it.
Importantly, the UETA is procedural, not substantive. Therefore, it does not change or impact contract law that would otherwise apply (e.g. state law, statute of frauds, agency law). For instance, if a contract is required to be in writing and signed, the UETA does not eliminate or change those requirements. It simply permits electronic means of producing a “writing” and “signing” a contract.
Many construction and real estate contracts/documents are required (by law or by the terms of the documents) to be signed. The UETA permits electronic signature of those documents. Per the UETA, a signature is defined as “an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record. “Placing your name at the end of e-mail could be enough to satisfy this requirement. Hitting send on a text message could likewise constitute a signature, as this could be construed as a process logically associated with a record that a person performs with the intent to sign that record.
While it is unlikely that parties would have a complicated construction project or real estate deal solely documented by solely by electronic means, the ability to document portions of a project electronically could serve a very useful purpose (e.g. a cloud-based portal for execution of change orders that can be accessed and executed through smart phones by the representatives with proper authority).
If you have questions about how to incorporate the provisions of the UETA into your real estate or construction business and dealings, we would be happy to speak with you.