Tennessee Supreme Court Relies on UETA to Uphold Contract Formed by E-Mail Signatures

Electronic Signatures

On April 24, the Supreme Court of Tennessee upheld an appellate court decision enforcing a settlement agreed upon by an e-mail exchange between the parties’ attorneys. Waddle v. Elrod, No. M2009-02142-SC-R11CV, 2012 WL 1406451 (Tenn. Apr. 24, 2012). The case involved a family dispute over an interest in real property. After counsel exchanged email setting forth terms of the settlement (which included agreement to transfer a property interest), one party recanted and refused to sign the written settlement documents. In the ensuing litigation, the trial court enforced the settlement agreement, but failed to address arguments that Tennessee’s Statute of Frauds (the Statute) precluded enforcement or that the state’s Uniform Electronic Transactions Act (UETA) satisfied the Statute. In addressing both questions, the Tennessee Supreme Court rejected a lower appellate court’s reasoning that the Statute only applied to land sale contracts, and held that the Statute also applied to agreements to transfer land. The court nonetheless opined that that the exchanged e-mails were sufficiently definite writings for purposes of the Statute, and were validated as such by UETA; the court also found that the parties “through their counsel evidenced an intent to finalize the settlement by electronic means,” that UETA “obviate[d] the need for a handwritten signature[,]” and that counsel’s “typed name at the end of the e-mail constitute[d] an ‘electronic signature[,]’” thereby satisfying the signature requirement of the Statute.