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Court rules sending email could create binding contract

by Lindsey Wells

Email users should be mindful of what they write, as the contents of electronic messages could be legally binding, according to a report by the National Association of Realtors. 

The report cites a court case involving settlement negotiations that occurred over an email exchange between two attorneys. One of the email messages contained a specific dollar amount for settlement and a standard signature block without 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.

However, in July, a New York state appellate 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,” said Joshua Stein, a Forbes.com columnist, in the report. “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.

While many standard email disclaimers state that messages are not intended to create any form of a binding agreement, Stein encourages users to be cautious with what they send. 

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