Email Communications May Create Enforceable Agreements

February 6, 2014

Email has become the preferred method of communication amongst many businesses and professionals. As shown by a handful of recent Massachusetts cases, it is imperative to review and revise e-mail correspondence, being mindful of the commitment-value of the written words. A recent article from Massachusetts Lawyers Weekly discussed this topic.

In 2004, Massachusetts adopted the Uniform Electronic Transactions Act, and both Massachusetts state and federal courts have since held that electronic correspondence may create a binding contract and satisfy the statute of frauds, which requires certain types of contracts to be in writing. Additionally, email conversations may be able to substitute as valid signatures, or may fulfill notice provisions of contracts, even when the contract is silent with respect to electronic communications.

Massachusetts judges have attempted to create a standard with respect to what constitutes a binding email conversation or what is so informal that an email does not demonstrate intent. A widening gray area has developed in the law as different courts come to different conclusions.

In July, Parker Scheer blogged about a federal court decision which held that a relatively informal email exchange constituted a binding settlement agreement. The court's analysis turned on the fact that both parties expressed mutual assent to terms in the email.

A state superior court ruled similarly in Feldberg v. Coxall, a matter involving a real estate transaction. There, the defendant seller argued that the email communications were not signed, and therefore no contract was formed, as the communication failed the standards of the statute of frauds. The judge held that the signature, as required of a valid contract, was present in the "'from' portion" of the email. Sending the email, in effect, was a valid signature.

Courts have routinely analyzed parties' agreements by looking within the "four corners" of the document. Courts are now looking at emails similarly, analyzing all the language within the communications. As this issue most often affects business and real estate transactions, many parties conducting such transactions have adopted the practice of attaching disclaimers to emails. The disclaimers often state that any electronic correspondence does not constitute a valid agreement. This practice may prove effective, but is not fool-proof. Despite not having a set standard regarding this issue, courts will look to the intent of the parties - if the parties appear to have intended to create an agreement, then a court will likely rule that an enforceable agreement exists.

To avoid inadvertently binding oneself to a contract via email communications, businesses and professionals should seek the assistance of an experienced business lawyer when exchanging transaction-related correspondence. Contact a business law attorney at Parker Scheer today for a free consultation.