Wednesday, May 28, 2008

Binding Contracts Created by Email

As e-mail exchanges become more and more prevalent in our everyday lives, the courts are beginning to hold that e-mails can create binding, written, contracts. As noted here:
[F]or good or for ill, parties now can conclude a contract, or amend an existing contract, via e-mail....

As ... recent decisions reflect, e-mail contracting can be an effective way to form an enforceable contract. They can however be a boon or curse. E-mail is a casual and speedy form of communications, previously unheard of in the practice of law and which belies its potential legal import.

Parties wishing to avoid the impact of a ruling that e-mail communications have created contractual obligations (or have amended an existing contract) should do what parties do in the traditional context: Make it clear that they do not intend for a contract to be formed until all documentation is fully completed and signed.

In other words, everyone should stop and think before hitting "send."