Reference no: EM131556767

The Validity of E-Signatures on Agreements with Online Colleges and Universities

The number of online institutions offering bachelor's, master's, and even doctoral degrees has grown dramatically in recent years. Enrollment for these online colleges and universities is conducted online. Most, if not all, of these schools ask enrolling students to agree that any disputes will be solved by arbitration. How valid are these enrollment agreements when the students simply indicate their assent via electronic signatures, or e-signatures?

Two Students Claimed That E-Signatures Were Invalid

One student, Scott Rosendahl, alleged that online Ashford University's enrollment adviser claimed that Ashford offered one of the cheapest undergraduate degree programs in the country. In fact, it did not. Another student, Veronica Clarke, enrolled in the doctor of psychology program at the online University of the Rockies. She alleged that its enrollment adviser told her that the doctor of psychology program would qualify her to become a clinical psychologist in the U.S. military, but that statement was false.

Rosendahl and Clarke sued their respective universities for violation of unfair competition laws and false advertising laws, fraud, and negligent misrepresentation. These students claimed that their e-signatures were invalid.

The Online Universities Argued for Arbitration

The universities pointed out that each student had electronically assented to the enrollment agreement, which clearly required that all disputes be arbitrated. Each agreement stated, "Such arbitration shall be the sole remedy for the resolution of any dispute or controversies between the parties to this agreement."

One issue was whether the e-signatures on the agreement were valid. Each application form had an "acknowledgment and signature" paragraph that stated, "My signature on this application certifies that I have read, understood, and agreed to my rights and responsibilities as set forth in this application."

Both students had to click on an electronic box acknowledging that they had read the agreement and consented to it. When they clicked on the box, the phrase "Signed by E-Signature" appeared on the signature line.

The Court Ruled in Favor of the Online Universities

The universities submitted copies of Rosendahl's and Clarke's online application forms to the court. Both forms contained the arbitration agreement and were signed with e-signatures. Rosendahl and Clarke provided no proof that they had not consented to the enrollment agreements. Thus, the court held that the online universities had proved the existence of valid arbitration agreements.

Critical Thinking

Would the fact that the arbitration agreements were valid have prevented Rosendahl and Clarke from pursuing their claims for negligent misrepresentation and fraud? Why or why not?