And I've Got the E-Mail to Prove It (and the Court Agreed)

And I've Got the E-Mail to Prove It (and the Court Agreed)

I read a very interesting article on Realtor® Magazine online today.  It presented a case whereby a buyer filed a lawsuit against a seller for backing out of a contract for sale. The gist of the lawsuit was that via email, there was apparently an implication that an offer was accepted by a seller.  Prior to obtaining signatures on the contract, the seller received a higher offer and then reneged on the agreement with the first buyer.

Fast forward, the first buyer took the seller to court on the grounds that, via email, they had a binding agreement.  The seller contested on the basis that a contract had not been signed as required by law  under the Statute of Frauds.  The seller vehemently denied the existence of a binding contract and filed a motion to dismiss.

I have touched on this subject before and certainly there has been a lot of discussion on ActiveRain about this very subject.  Of course there have been staunch supporters of the binding effects of emails as well as staunch supporters holding the opinion that emails cannot bind contracts based on contract law. 

Well in this case, it ended up being decided outside of court, but prior to that, the low court judge had denied the sellers motion to dismiss.  This particular case was before a Massachusetts court and the judge ruled that "under a state law called the Massachusetts Uniform Electronic Transactions Act, an email signature block or even the 'from' portion of the e-mail may constitute a valid electronic signature in cases where parties are conducting a transaction electronically."

Since the case was settled out of court, precedence was not set, but according to the article, this case left the door wide open for future lawsuites pertaining to agreements made via email.

So what's the moral of this story:  It doesn't not matter whether your state current recognizes emails as being acceptable forms of binding contracts.  What really matters is:

1. What you say and how you say it in an e-mail AND
2. Be sure that your emails contain a disclosure stating that email agreements are not binding and that contracts shall not be considered binding until such time that a contract has been signed by both parties via a wet signature or approved and recognized electronic signature service such as Authentisign, DocuSign or the like.

Below are sample disclaimers that the article suggest that you include in your emails:

Watch what you say in e-mails. If you're representing the seller, always say that the terms of the deal must be approved by the seller and that negotiations are preliminary until an offer or contract is signed. Conversely, if you are representing the buyer, it's prudent to push for confirmation that a deal has been reached, to avoid a situation, like the Massachusetts case, in which the seller jumps at a higher offer at the last minute.

Use a disclaimer. You can insert a disclaimer in your e-mail signature that looks something like this: "E-mails sent or received shall neither constitute acceptance of conducting transactions via electronic means nor create a binding contract until and unless a written contract is signed by the parties."

 

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Charita Cadenhead, Your Metropolitan Birmingham, Alabama Real Estate Broker of Choice

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