LegalTender3
Junior Member
Washington:
In a Purchase-Sales/Release of Interest transaction, all parties agreed to use electronic signitures in leu of driving across town to meet and sign. The Contrats Payment Terms and the attorneys in structions both stated that the Seller was to be paid upon signing the contracts, and the signatures of the other purchasers would be collected later. When the Seller signed, thmanaging Purchaser said that a new contract had to be created with a non-compete "I forgot to do my due dilligence", and that that no funds would not be disbursed until after the new contracts were signed.
Q) Since the Signed contracts and the attorneys instructions state the Seller is to be paid once the Seller signs the document, is the LLC contractually obligated to pay the Seller even if one of the Purchasers decides not to sign.
Q) Does the Purchasers agreement to use e-signatures in leu of a physical signing constitute a signature? And if the Purchasers indicate that they will sign the contracts after the Seller signs it, can they back out after the Seller actually signs it?
Details:
1. 5 Siblings inherited fathers business. A new LLC is formed.
2. One of the siblings decides not to participate in the buiness and offers to sell thier intest in the business and the other siblings (the LLC) agree to purchase.
3. A Purchase-Sales Agreement and a Release of Interest are prepared and the LLC's Manager (a sibling) explains that they will be using digital signitures (scanned signitures).
In the Purchase-Sale agreement, the payment terms state that the Purchaser promises to pay the seller after signing the documents:
Payment Terms. Purchaser promises pay the Purchase Price by paying $5000.00 to each Seller after he/she has signed this Agreement and an assignment and release of interest.
The LLC's attorneys instructions reflect the same:
"Attached are two documents for your Chuck to sign. As soon as he signs both you can give him the agreed sum. Then you should have your siblings sign the agreement and give a signed copy to them and me."
Chuck signed and returned the documents to the manager, who responded that one of the siblings wont sing, and an updated contract containing an non compete clause will be created.
Chuck argued that the contracts he signed are legally binding and that his signture is all that is requried to trigger the disbursment because:
1. They all agreed to use the digital signatures in leu of everyone meeting to sign the document at the same time, and represented that the other siblings intended to sign.
2. The Payment Terms and attorneys instructions stated that the money was to be distributed once the Seller signed, and that the signatures of the others would be collected after disbursing the funds.
My questions are,
Q1) Under these circumstances, are the contracts that Chuck signed legally binding?
Q1) Are there any cases with similar circumstances to this?
Q3) Are there procedural rules for when digital signatures are agreed upon in lew of a physical signing?
Q4) Is chuck free to sell his interest to another party? He hasn't signed the LLC partnership agreement, so he is not bound by any of its restrictrions on the sale of his interest in the business.
In a Purchase-Sales/Release of Interest transaction, all parties agreed to use electronic signitures in leu of driving across town to meet and sign. The Contrats Payment Terms and the attorneys in structions both stated that the Seller was to be paid upon signing the contracts, and the signatures of the other purchasers would be collected later. When the Seller signed, thmanaging Purchaser said that a new contract had to be created with a non-compete "I forgot to do my due dilligence", and that that no funds would not be disbursed until after the new contracts were signed.
Q) Since the Signed contracts and the attorneys instructions state the Seller is to be paid once the Seller signs the document, is the LLC contractually obligated to pay the Seller even if one of the Purchasers decides not to sign.
Q) Does the Purchasers agreement to use e-signatures in leu of a physical signing constitute a signature? And if the Purchasers indicate that they will sign the contracts after the Seller signs it, can they back out after the Seller actually signs it?
Details:
1. 5 Siblings inherited fathers business. A new LLC is formed.
2. One of the siblings decides not to participate in the buiness and offers to sell thier intest in the business and the other siblings (the LLC) agree to purchase.
3. A Purchase-Sales Agreement and a Release of Interest are prepared and the LLC's Manager (a sibling) explains that they will be using digital signitures (scanned signitures).
In the Purchase-Sale agreement, the payment terms state that the Purchaser promises to pay the seller after signing the documents:
Payment Terms. Purchaser promises pay the Purchase Price by paying $5000.00 to each Seller after he/she has signed this Agreement and an assignment and release of interest.
The LLC's attorneys instructions reflect the same:
"Attached are two documents for your Chuck to sign. As soon as he signs both you can give him the agreed sum. Then you should have your siblings sign the agreement and give a signed copy to them and me."
Chuck signed and returned the documents to the manager, who responded that one of the siblings wont sing, and an updated contract containing an non compete clause will be created.
Chuck argued that the contracts he signed are legally binding and that his signture is all that is requried to trigger the disbursment because:
1. They all agreed to use the digital signatures in leu of everyone meeting to sign the document at the same time, and represented that the other siblings intended to sign.
2. The Payment Terms and attorneys instructions stated that the money was to be distributed once the Seller signed, and that the signatures of the others would be collected after disbursing the funds.
My questions are,
Q1) Under these circumstances, are the contracts that Chuck signed legally binding?
Q1) Are there any cases with similar circumstances to this?
Q3) Are there procedural rules for when digital signatures are agreed upon in lew of a physical signing?
Q4) Is chuck free to sell his interest to another party? He hasn't signed the LLC partnership agreement, so he is not bound by any of its restrictrions on the sale of his interest in the business.