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Ask Shawn Collins: Online Affiliate Applications Legally Binding?

February 8, 2005 by Shawn Collins

Q: I’m starting an affiliate program for my small online business. Are online affiliate applications legally binding or do I need the affiliate to fax or mail in the original application?

Shawn CollinsA: Let me preface this by saying that I am by no means a lawyer. That said, I have always blindly assumed that they must be binding, as I’ve worked with a number of lawyers that dot all their i’s and cross all their t’s, and they didn’t raise objections about affiliates consenting to agreements with an electronic signature.

Also, I cannot think of an example of a company with an affiliate program that asks for a real signature for the affiliate agreement.

I searched around a bit, and found that President Clinton signed the Electronic Signatures in Global and National Commerce Act (ESIGN) on June 30, 2000.

As it turns out, this federal law made signatures rendered electronically over the Web just as binding as if they were written by hand.

“Online contracts will now have the same legal force as equivalent paper contracts,” according to President Clinton. “Companies will have the legal certainty they need to invest and expand in electronic commerce. They will be able not only to purchase products and services, but to contract to do so. And they could potentially save billions of dollars by sending and retaining monthly statements and other records in electronic form,” Clinton added.

This law, which went into effect Oct. 1, 2000, excludes certain business transactions. Documents excluded include wills and many types of court documents, notice of cancellation or termination of utility services, eviction notices, rental agreements, cancellation or termination of health insurance or benefits or life insurance benefits and some product recalls.

So it sounds like you’re safe to stick with the online signatures for affiliate agreements.

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