Should you start accepting electronic signatures?


    electronic signatures for vacation rental contractsThe best method for confirming that your guests fully understand and acknowledge the terms of your rental agreement is to require a handwritten signature to be scanned and sent back to you. But in this day and age, where everything has gone electronic, you might consider electronic signatures (or e-signatures) for your vacation rental contracts. But before you start shredding all your printed contracts, consider the possible ramifications of moving to e-signatures.


    What is an electronic signature?

    An e-signature offers a way for you to submit your vacation rental agreements to prospective guests online and receive confirmation without requiring them to mail or fax back a handwritten, signed copy. An electronic signature can come in a few different forms, including a scanned image of your signature, a checkbox acknowledging terms and conditions, or a digital signature that involves some kind of cryptography to verify. (Digital signatures are not as widely used because they require a third party to certify for a fee, which could create a barrier for your guests.)

    The important thing to remember when creating a contract, whether it is signed electronically or by hand, is to consider the worst-case scenario (even though most of us would rather not.) In other words, make sure your contract is extremely thorough and that you have included everything prior to getting any form of signature. The fact is, it won't matter what type of signature you have if you are missing critical information in your contract.


    Are electronic signatures legal?

    According to ESIGN (the Electronic Signatures in Global and National Commerce Act), electronic signatures are considered legal and valid in the United States, with some exceptions based on individual state statutes.

    One of the most difficult problems when it comes to vacation rentals is that, in many cases, there can be up to three states involved: one where the vacation rental is located, one where the homeowners reside permanently, and one where the renters reside permanently. So, if a dispute were to arise, it would be difficult to determine the state with jurisdiction. (You can try specifying this information in your contracts, but it may not be enforceable.)

    For the most part, though, e-signatures are enforceable unless they are poorly executed. A poorly executed e-signature would include, for example, a signed contract that does not include information about the cancellation policy. If your cancellation policy was stated elsewhere but not signed on this particular electronic document, it would likely not hold up in court.



    Last Updated April 11, 2018




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