“I’m not signing that.” “I didn’t sign any contract.” Many of us have been in transactions where the deal has gone awry, and the question becomes what happens after someone’s breach or non-performance. In other words, which terms and conditions control the deal?
The natural response most people have is to ask whether there is a signed contract. Ohio law, however, provides that written contracts may be enforceable regardless of whether they are signed. A party can prove the existence of an enforceable contract not only through a written signature, but also “in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.” Recent cases in Cleveland and southern Ohio enforced the terms and conditions of unsigned contracts because the parties performed the services required in the contract and failed to reject the contracts before performing. The most common example is a purchase order: an HVAC contractor submits a proposal to perform maintenance work at a factory. The factory owner then issues a purchase order to the contractor to perform the maintenance, and the P.O. contains “standard” terms and conditions. If the contractor performs the work without rejecting the P.O.’s terms and conditions, it is bound to those terms, regardless of whether the P.O. is signed.
Now apply these principles in the digital world. Many of us have already ordered products or services online that automatically bind us to the seller’s terms and conditions. But the ease of digital communication in business, through emails, text messages, web interfaces or otherwise, can more easily expose companies to doing business on someone else’s terms. Businesses must be attuned to how they are communicating with their customers and vendors, and whether there are contract terms attached to any of those communications. We can evaluate your contracting procedures and help to avoid binding your company to unwanted terms.