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Electronic Contracting White Paper

CNCDA commissioned a legal white paper by preeminent experts at the Munger, Tolles & Olson LLP law firm on the use of e-signatures for vehicle sales and lease contracts in California. The chief author of the memo – Donald Verrilli – is one of the nation’s premier Supreme Court and appellate advocates. He served as Solicitor General of the United States from June 2011 to June 2016 for the Obama Administration. 

The white paper unambiguously concludes that “the use of electronic signatures and records in connection with the sale and leasing of automobiles is lawful in California.” You can download it by clicking on “Download PDF” above.

The white paper’s conclusion is supported by recent statements by the California DMV Director on the use of electronic signatures for vehicle purchases. Following the DMV’s approval of electronic submission of odometer statements, Director Gordan proclaimed: “Buyers can now complete their purchase from anywhere – no ink or paper required.” Click here to read more.

CNCDA understands that some dealers are hesitant to adopt the use of electronic signatures for vehicle sales and lease transactions, as such transactions are not expressly authorized by the California Uniform Electronic Transactions Act (CalUETA). CNCDA sought to provide clarity on this issue by introducing legislation to amend CalUETA in 2021. However, our bill was blocked by trial attorneys and other special interest groups, who sought to use our bill as leverage to impose additional onerous restrictions on dealers. 

If you have hesitated to adopt the use of electronic signatures at your dealership, please review the attached white paper with your counsel, as we believe it provides a strong basis to move forward with a fully electronicprocess at your dealership. 

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