To date, there has been no statutory authority that allows motor vehicle sales and lease contracts to be signed electronically. Last month AB 380 was introduced in the California Assembly.to amend sections of the California Civil Code to permit conducting such transactions by electronic means. Currently the Uniform Electronic Transaction Act (“UETA”) does not cover motor vehicle sales and lease contracts. As a result, at this time, such transactions must be conducted in person and cannot be conducted electronically. AB 380 would remove the exemption of motor vehicle sales and lease contracts from the UETA.

If enacted, the law would still not permit electronic signatures for certain transactions under the Uniform Commercial Code. For example, the creation and execution of wills, codicils, or testamentary trusts; for specifically identifiable text or disclosures in a record or a portion of a record that, by law, must be separately signed, including initialed, from the record; and any specific transaction described in § 17511.5 of the Business and Professions Code applicable to telephone solicitations would still require personal signatures.

As more transactions are memorialized electronically it is important for businesses to know whether their contracts are legally binding if the signatures are electronic. If you are a business owner and don’t know, check with your legal counsel before using services like Docusign to electronically subscribe your contracts.

The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.