SSA Blog

The Unsigned Contract

What is the effect of an unsigned rental agreement? In a nutshell, a judge won’t enforce the paragraph you hoped would win your lawsuit and will instead declare that very provision unenforceable. That is what happened in Vitale-Renner v. Sixt Rent-A- Car, 2022 U.S. Dist. LEXIS 121322. The plaintiff brought a class action lawsuit alleging that Sixt overcharged its customers for its supplemental insurance product. Sixt moved that the suit be dismissed and the dispute decided by individual arbitration as required by the car rental agreement. The plaintiff countered that she never signed a paper or electronic contract. While Sixt had a procedure in place that was designed to make sure that every vehicle rental agreement was signed, it was unable to provide proof that the plaintiff had signed her rental agreement. The court concluded that there was no enforceable agreement to arbitrate claims because Sixt failed to prove that the plaintiff reviewed and signed the rental contract.

Had Sixt proved that the plaintiff signed the rental contract, this class action lawsuit would have ended with its motion to compel arbitration. A similar result is possible when a self storage operator asserts that a tenant suit should be dismissed based upon the release of liability or recovery limited to $5,000 based upon the limitation of value paragraph. The failure to have a paper rental agreement signed by the tenant or an electronically signed rental agreement provides a legal basis for a judge to deny a motion to dismiss and require the dispute to go to trial. Operators should institute procedures that make it difficult for tenants to access their space without executing rental agreements in ink or electronically. It is also wise to audit new rental files to verify that the rental agreement has been signed. If a rental agreement is unsigned, a process to remedy the problem should be instituted. It is not too late to fix an unsigned rental agreement, even if the tenant will not cooperate by signing. A series of communications from the owner pointing out that the rental agreement was not signed and allowing the tenant to correct this error can make a difference.

Alternative Proof of Acceptance

The New York Supreme Court, Appellate Division decision in Weissman v. Revel Transit, 2023 N.Y. App. Div. LEXIS 2929, demonstrates that proof of agreement to contract terms can be established by means other than a signature. The plaintiff rented an electric moped on his phone. The rental process required that the renter go through a series of screens that led him to Revel’s clickwrap contract. The site required that he “agree” to the terms of service before inputting his information and using the moped. The terms of service required claims to be individually arbitrated and that the plaintiff release Revel from liability arising from his use of the moped. The plaintiff claimed he never saw the terms of use or liability release. Since he never saw the contract, he could not have agreed to its terms. The court rejected this argument. The court noted, “There is no requirement that the agreement be signed by the parties as long as there is other proof that the parties reached an agreement, which was present here.” The plaintiff was notified that there were important contract terms to be reviewed, and the fact that he chose not to do so did not make the contract invalid. The court ruled the contract’s terms bound him, including the requirement that his claim go to arbitration. Bottom line: Storage operators want every rental agreement signed, but they may be able to repair a signature failure after the rental.