"I Agreed To What?!" - Emails As Binding Contracts

"I Agreed To What?!" - Emails As Binding Contracts

 
What does the average person envision when they think about the process of preparing and entering in a contractual arrangement? Well, based on every movie I saw in the 80’s, it consists of numerous people in business attire sitting across from each other in a board room, working ‘til all hours of the night over draft over draft of a written agreement. When an agreement has finally been reached, all the parties shake hands, sign the document (now the size of a phone book) in front of witnesses, and then go smoke cigars and drink brandy out of snifters (Wikipedia definition of Snifter -  globular glass with a small top; used for serving brandy).
 
Well, as you may have guessed from the title of this article and perhaps your own experience – the times they are a changing. The US Government recognized that much of today’s business was conducted via email and other instantaneous forms of communication and decided to set a national standard for these types of transactions through The Uniform Electronic Transactions Act of 1999 (since adopted by over 47 States – including California). The “UETA” explicitly provides that electronic records can constitute legally binding agreements/contracts and are not required to be in writing. It also indicates that electronic signatures (it can simply be your name in the email) are legally recognized as valid for purposes of entering into electronic transactions.
 
So what does this mean to you? Through the UETA and the other electronic transaction laws that have been enacted/adopted by the federal government and the states, it is entirely possible to enter a legally binding agreement solely though email communications. If your email or chain of emails clearly shows that there has been an offer/deal and all the materials terms of the deal are contained in the email and the other person responds by email accepting the terms – you sir/madam very well may have entered into a valid contract without ever meeting face to face or signing a physical document.
 
How many emails do you send and go through every day? How often do you pay careful and close attention to the proposals you review or even the ones you send? Maybe you are reading your emails late at night, you’re tired and you simply want to get through them and get to bed and simply type “that’s fine” in response to some proposal. Did you just enter into an agreement? Obviously, the legal implications of an email contract will be different depending on the situation. Reneging on a promise to your cousin to watch her/his kids will not have the same implications as a promise to buy a car or accept a shipment at a certain price. The point is that you must be intelligent about all professional correspondence and recognize that if you are asked to agree to something in an email, it might be legally binding. If you are presented with such an offer and are unsure of how to proceed, respectfully decline and wait until you have all of the facts to decide exactly how best to go forward and then request a formal document laying out your agreement step by step. Only in that way will you be sure you do not inadvertently agree to something when you haven’t been paying attention.

This article appeared in the March 2011 issue of The Valley Business Journal

Jason E. Gallegos is an associate at our Indian Wells office. He concentrates his practice on the defense of healthcare professionals and general civil litigation defense. Mr. Gallegos may be reached at (760) 568-9959 or jegallegos@neildymott.com
 

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