Is a faxed document enforceable?

Has this ever happened to you? A closing is scheduled. All of the parties, and their respective counsel assemble to execute documents and fund the loan. However, as matters progress, it becomes apparent that one or more of the documents is missing, or improperly executed. But not to worry. The solution: simply fax the document to the appropriate party for execution and have that party fax it back. And, in most cases, to insist that the faxed copy be followed by a manually executed version of the document.

Seems simple enough, doesn't it? But is the faxed document, which the lender relied upon in funding the loan, legally enforceable? After all, there is no absolute assurance that the manually executed document will be sent.

The question is simply this: If it becomes necessary to enforce the lender's rights, will a court recognize the legal validity of a document signed outside the presence of the lender and merely faxed to the lender?

In approximately 30 states*, the problem has been solved through legislation. The statute, which was approved by the National Conference of Commissioners on Uniform State Laws in 1949, is the Uniform Photographic Copies of Business and Public Records and Evidence Act ("Act").

The Act allows a document to be introduced into evidence if it records an "act, transaction, occurrence or event" that occurs in the regular course of business, and it makes the document admissible "whether the original is in existence or not." The Act specifically refers to faxed documents.

However, such important commercial states, as Illinois, Ohio, Florida, Texas and...