QUESTION

Creating a Contract by requiring an E-Signature

Asked on Apr 15th, 2014 on Breach of Contract - California
More details to this question:
I have a small consulting business which locates misallocations/over payments for companies and provides them with details on how to recover these funds. The rule of thumb is, we never give our clients any specific information prior to having a signed contract because they can bypass us and we'll lose our contingency fee. Recently, we stumbled upon our largest find to date, and our attempts to get the company under contract have not panned out. They act as if they're disinterested. We're confident that if we share the details of our discovery that the company stands to recover about 150k and subsequently, we'd get our standard rate of 30%. My question is pretty simple; if we advance the company our information without a contract and they use it to recover these funds and then refuse to pay us, do we have any legal recourse? Also, would requiring an e-signature to access the information be enough to establish we had an agreement?
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1 ANSWER

Appellate Practice Attorney serving New York, NY
If you advanced the information without a contract, I think you'd be out of luck.  However, I believe that you can compromise by reaching an agreement to disclose the information on condition that the company not use it unless it, after seeing the information, decides to engage your company.  These types of agreements are used all the time when businesses are discussing merger or the acquisition of one by the other.  The buyer needs to see all sorts of private information in order to do due diligence, but the seller doesn't want the buyer to back out and then use the proprietary info to the seller's detriment.  As for e-signatures, they are normally sufficient to show acceptance, but acceptance of what?  Just requiring an esignature for access would not give me comfort that you had an enforceable contract, but I think it would be ok if you provided prominent notice that the act of esigning and accessing will constitute consent to the proposed contract. As an aside, there are sometimes good reasons why people will not avail them selves of the types of services you provide, even though they can recover money.  For example, one of my clients, a beneficiary of a will, was approached by a firm such as yours claiming to have information about $10,000 in unclaimed assets of the decedent.  The problem was that $10,000 would have pushed the estate beyond the federal estate tax threshhold, and the tax consequences would have been well more than $10,000. 
Answered on Apr 15th, 2014 at 4:31 PM

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