Article courtesy of Andrew Thomison (of Baker Botts)
Contract executed with an electronic signature held to be enforceable.
In Kamel v. Ave. Insights & Analytics LLC, 2020 WL 4679574 (E.D. Tex. 2020), the Eastern District Court of Texas (the “Court“) was asked to decide, among other things, whether an electronic acknowledgment, rather than a physical “wet ink” signature, on a contract was valid (and therefore, whether the contract was enforceable) under Texas law.
Ted Kamel (“Kamel”) was an employee at Avenu Insights & Analystics, LLC (“Avenu”). Upon his departure from Avenu, Kamel was asked to acknowledge an agreement containing non-disclosure, non-solicitation, and non-competition clauses. Kamel thereafter began working for one of Avenu’s competitors and sought to have the agreement declared unenforceable (including because it was not validly executed with a “wet” signature).
The Court rejected Kamel’s claim and held the agreement enforceable. In reaching its decision, the Court noted that although Kamel did not “wet” sign the agreement, he accessed and acknowledged the agreement in his employee resources portal. Kamel argued that since the agreement contained a signature block and previous documents between Avenu and Kamel were executed with “wet” signatures, an electronic acknowledgement was insufficient to validly execute this agreement. The Court disagreed, noting that, as a general matter, electronic signatures are valid under Texas law as long as they constitute the act of the person signing. Further, a signature block is simply proof that a document may be “wet” signed, not that it must be “wet” signed. Instead, the Court held, there must be explicit language within the contract that a “wet” signature is required in order for an electronic signature to be invalid. Because the other elements necessary for valid contract formation were also satisfied, the Court held that the agreement between Kamel and Avenu was enforceable.
