Corporate & Business/Oct 26, 2015

Contracting By The Internet In Michigan

In 2000, Michigan adopted the Uniform Electronic Transactions Act (“UETA”). In Michigan, the mutual assent of both parties to a contract is required in order to have a valid and enforceable contract. Assent of a party can be demonstrated by an “electronic” signature if the parties have agreed to conduct a transaction by electronic means, including filling out forms electronically over the internet. By Michigan statute, an electronic 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 a record.” MCL 450.832(h).

Many of us unwittingly engage in making contracts over the internet. For example, when updating smart phone operating systems or applications (“Apps”) on a computer, we are often prompted to check the “Agree” box before following certain other instructions. The act of electronically checking the “Agree” box or other electronic procedure may result in a binding contract.

In Harpham v Big Moose Home Inspections, Inc, unpublished opinion per curiam of the Court of Appeals issued October 13, 2015 (Docket No. 321970), the Michigan Court of Appeals held that homeowners who sought to avoid a shortened contractual limitations period in which to file a lawsuit were barred from proceeding because the homeowners formed a valid contract by merely checking a box on the service provider’s website.

Mindlessly checking boxes while surfing the internet can have significant consequences. Beware when checking the “I agree” box on internet websites.

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