Question

If a contract is faxed to both the seller and buyer and both the seller and buyer sign the faxed copies, what is true?

1) After negotiations have been accepted via the fax, originals must be signed by buyer and seller within 7 days.
2) Faxed contracts cannot be considered 'originals'.
3) There is a binding contract if the contract states facsimile signatures are accepted.
4) The broker must get one signature at a time when using the fax so that the faxed contract has both signatures.

Answer 1

If the contract states that facsimile signatures are accepted, the faxed signed copies by both parties constitute a binding agreement. There is no legal requirement that originals must be signed after nor that a broker must collect signatures one at a time.

Step-by-step explanation:

When dealing with contracts, the validity of faxed signatures can be subject to the contract's terms and the laws governing such agreements. According to current practices, if the contract expressly states that facsimile signatures are accepted, then the faxed copies with signatures from both the seller and the buyer can create a binding agreement. Option 3 from the question is true: 'There is a binding contract if the contract states facsimile signatures are accepted.'

It is not necessitated by law for originals to be signed after faxed agreements unless the contract specifically requires it, thus making statement 1 incorrect. In regards to statement 2, although faxed copies are not 'originals' in the typical sense, they can serve as original signed documents for legal purposes when facsimile signatures are acknowledged by the parties involved. The requirement for a broker to get one signature at a time (statement 4) does not hold legal significance for the validity of signed faxed contracts.