USING ELECTRONIC SIGNATURES DOES NOT CHANGE YOUR DUTIES.

November 9th, 2012 at 7:22 pm

As you know, we believe that electronic signatures are the future and, as importantly can be very useful for your business. Products like DocuSign and Digital ink make it easier for you to get your client’s signature no matter where they are. They allow a transaction to move forward more quickly and ensure that copies of signed documents are not misplaced. All in all, we think they are a good thing and strongly recommend that you use them as soon and as often as possible.
On the other hand, however, we are hearing that because of the way DocuSign works, it is becoming more common for documents to be signed by your clients without being read or explained by the agent. As you know, the systems make it very easy for clients to move from signature block to signature block without reading anything in between. If the agent doesn’t ensure that the documents are read by or explained to the client, then when a problem arises, we will invariably hear the “I didn’t read it and would never have agreed to that” excuse. This exact scenario has come up no less than 5 times in the last month.

While I don’t believe saying that “I didn’t read the document” is an excuse for your client, it does point out a problem in our practice. First, as a legal matter, it is your obligation to ensure that your client reads and understands what they sign. As a result, even if you use electronic signatures, which we believe you should, you need to still go over the documents with your client. Of course, there are many ways to do this. As I have said many times, some agents go over all the documents at the beginning of their relationship with a client, like when they get a listing signed. That way they can tell the client what is coming and set the appropriate expectations. Others, especially in the case of electronic signatures, go over the documents on the telephone and emphasize, in an e-mail, that the client needs to read everything before he signs. However you do it, you need to recognize that your obligation to guide and give advice to your client has not changed because they can sign documents electronically.

Furthermore, and more importantly, your business is all about relationships. It is those relationships that make your deals easier to close and results in the referrals that you need to succeed. As a result, meeting with your client to show your expertise and go over documents should be seen as an opportunity, not a burden. By explaining things professionally to your client, you are advertising your expertise, and making them realize why they hired you and why they should hire you in the future. This time with your client can be priceless if used correctly. So, keep up with technology and use electronic signatures. There are many good reasons to do so. At the same time, however, don’t forget to go over all documents with your client. Not only is it your legal obligation, it is one of the best marketing opportunities you have.

As always, let us know if you have any questions.

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