05 May Email Changing Terms of Binding Agreements
Years ago, the terms of a contract were commonly determined in a face-to-face meeting. Negotiating parties would sit across from each other in a board room referencing piles of paperwork littered about the conference table until terms were agreed upon. Today, that scenario runs a little differently. Real estate agents have replaced the boardroom, table and paperwork with just a computer, effectively altering the way a contract is made into a binding agreement.
One of the biggest alterations to the process of agreeing to contract terms is email. With the increased use of electronic forms of communication, email has become an acceptable form of a binding contract.
Under the Uniform Electronic Transactions Act of 1999, electronic records can constitute legally binding agreements/contracts and are not required to be in writing. The act also stipulates that a name in an email can constitute as an electronic signature and can be legally recognized as valid for purposes of entering into electronic transactions.
Just last year, this issue was brought to court in Massachusetts in the case of Feldberg, et al. v. Coxall. The conflict escalated when a series of emails was exchanged between the attorneys of the buyer and seller of a property deal, including one last email with an attachment containing a revised offer of purchase. Leaving the document physically unsigned, the seller pulled out of the deal prompting the buyer to sue on the grounds that the deal had been agreed upon in the last email.
The seller moved to dismiss the case citing that nothing had been signed, however the judge threw out this dismissal thus inviting the court to look at whether emails are considered forms of binding agreements. Eventually the buyer and seller settled out of court some time later so the question was never formally brought before a judge. Legally speaking though, by his refusal to throw out the claim, the judge was effectively indicating that email could indeed be binding.
Avoid Inadvertently Binding Clients to a Deal
While email is an exponentially important tool that the busy professional simply can’t operate without, it is important to protect yourself from binding to a deal through careless communication. In order to avoid inadvertently agreeing follow these two suggestions when dealing with communications regarding contractual agreements:
Take care in what you say in emails. Explicitly state in emails the specific terms that will render an agreement official and binding. If you are on the selling end of the deal, explain that all negotiations are preliminary until an offer or contract is signed. If you are on the buying side, push for confirmation from the seller that a deal has been reached so as to avoid a last-minute back-out if another offer is made.
Use a disclaimer in your email signature. Including a statement indicating that email is not an acceptance of contract until explicitly agreed upon via signature is a great, automatic way to always make your intentions known when dealing with parties.