You’ve got (legally enforceable) mail!

emails as binding agreements contract review

As recent as 10 years ago it was common belief that email was a type of informal communication. In fact, many would argue that’s still the case today. However, as is true with most legal issues, what you don’t know can hurt you. Especially in the case of email threads you may believe to be nonbinding discussions.

E-negotiation

The art of negotiation traditionally follows a regular path: terms are outlined, terms are rejected or accepted, parties work toward a compromise, and an eventual agreement is put in place. But what if this all occurs throughout the course of an email conversation? Have the terms been adequately negotiated? Is there a legally binding contract in place? Often, the answer to these questions is yes.

An example of such misconception of the power of email comes from the New York Appellate Division’s take on the issue. In Forcelli v Gelco, the Second Department stated that due to the prevalent use of email as a form of business communication, finding that emails are incapable of becoming binding documents simply because they cannot be physically signed would be unreasonable. But if you think about it, they have a point.

The elements of a contract

A contract is nothing more than an offer, acceptance, and some sort of consideration. Generally, an enforceable agreement exists if there is an agreement and some exchange of value between the parties. With this in mind,

It’s essential for contracting parties casually negotiating terms via email to understand how to avoid unintentional binding agreements.

Particularly, it’s important to clearly state that any terms negotiated via email are subject to conditions and review by colleagues. Adding disclaimers to the end of email signatures claiming that no information transmitted through this email is evidence of an intention to be bound by any agreement adds further protection.

The importance of contract review by attorney

While these may be helpful tips to certain contracting parties, contract law is a tricky area that is open to wide interpretation and changing law, especially as courts grapple with how to apply existing law to ever-emerging technologies. Because of these changes and obscurities, always be aware of communication with other parties, and if necessary, consult an experienced contract attorney for advice.