Court Says Sending Email Can Create Binding Contract
October 4, 2021
Be careful before you press send—what you write in that email could be legally binding, as held by a New York state appellate court in July.
The case involved settlement negotiations that occurred over an email exchange between two attorneys. The attorneys were negotiating a settlement and one of the messages contained a certain dollar amount for settlement. That email contained a standard signature block but did not include the attorney’s typed signature. The other attorney confirmed the agreement.
A trial court ruled that the email exchange did not create a binding agreement because the sender did not type their name in the email message. Previous cases have stated that as well.
But on appeal, a higher court reversed that ruling.
“This case means that pressing ‘send’ on an email is now potentially equivalent to signing a piece of paper containing whatever statements appeared in the email,” Forbes.com columnist Joshua Stein reports on the case. “An actual typed signature is not necessary.”
The court also ruled that for an email to bind parties, it must summarize all “material” terms of the deal. In this case, that constituted the amount of money to be paid.
Senders may want to make it clear in writing that your email does not intend to create any form of a binding agreement. Many standard email disclaimers state that automatically on every message. But still, even with a disclaimer in place, watch your messaging before you press send, Stein cautions.
“Yes, Sending an Email Can Create a Binding Contract,” Forbes.com (Sept. 28, 2021) and NYcourts.gov
Updated: October 15, 2021