In today's fast paced business environment, decisions seem to be made instantaneously because of the wonders of e-mail and the fax machine. Must business be slowed in order to wait for the original signed contract, agreement, or instrument which is needed to close a loan or contract for services or products?

If it becomes necessary for a party to enforce its rights will a facsimile signature be enforced by the courts? In about 30 states this question has been answered by the adoption of legislation. Most of the 30 states have adopted laws which allow the introduction into evidence of a facsimile signature for disputes involving transactions concluded in the ordinary course of business, whether there is an original signature or not.

However, Illinois is not among the states which have adopted such an act. It is unclear whether a facsimile signature is enforceable in the states, such as Illinois, which have not adopted a statute to address the enforceability of facsimile signatures.

Because of the lack of case law concerning the validity and enforceability of facsimile signatures in states which have not adopted the uniform act, it is wise for the parties to express in writing the parties' intent that facsimile signatures shall be deemed to be of the same force and effect as an original executed document. Lacking any conflicting statutory or case law on the issue, the parties' agreement in a contract should buttress the enforceability of a facsimile signature.

The federal rules of evidence will allow the introduction of facsimile signatures in cases where the federal courts have jurisdiction. But other legal questions remain unsettled. For instance, if a document is signed in a state, which has adopted the uniform act, and the document is faxed to Illinois, where the act has not been adopted, is it enforceable? The question will likely be settled by a decision as to whether the entire contract or transaction is governed by Illinois law.

Caution should be exercised when entering into business contracts when reliance is placed on a facsimile signature. Form contracts and purchase orders should be reviewed for the appropriate language and an evaluation of whether the contract would be controlled by Illinois or another state's law.

For additional information regarding your particular business issue contact George Bellas.