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Email, a Legally Binding Contract?
slashrot writes "Boston.com has a story on a dispute between a home buyer and seller in which they agreed on terms in a series of email messages. Superior court judge Ernest B. Murphy decided that even though these messages only contain typewritten names instead of signatures, they still constitute a binding contract. It's said to be a first in Massachusetts." The particulary look to me like a home seller trying to weasel
out of a deal, but the ramifications of the decision are substantial. This is
really worth a read.
That's ridiculous. Email can be easily forged. And I would think a legally binding contract would somehow involve a lawyer.
"ph34r my 1337 n3kk1d ski11z!" - largo of megatokyo
I get there, and the person and her brother basically shove the animals in my boyfriend's truck, without me really getting to see them. Right then, red flags should have gone up in my head, but I had talked to the seller extensively and thought I could trust her.
I get the animals home, and it is clear that they are not at all what they were made out to be. One of the ferrets was extremely unfriendly and agressive, every time I would go near her, she would bite me, and she drew blood consistently. I emailed the girl back the next afternoon (a little less than 24 hours later, Michigan state law allows 72 hours to back out of a contract), telling her that I was backing out of the contract due to her untruthfulness. She emailed me back saying that she had contacted her lawyer (on a sunday, no less) and fed me a bunch of legal mumbo jumbo as to why she wouldn't take them back.
Turns out, the girl wasn't even 18 (she had lied to me). I tried to call her parents several times but was never able to get into contact with them. I wanted to take it to small claims court and get my money back, but I didn't think that the emails alone would be enough to prove my side, and finally just let it go and sold the ferrets to someone experienced with agressive ones, for a substantial loss.
I wish I would have known that my emails would have held up in court, I don't even think her parents had a clue what was going on. Ovbiously, it was partially my fault for being so trusting, but I found it hard to believe that someone I had talked to so extensively (probably 50k worth of email) would be so dishonest.
I learned my lesson from the experience, but knowing that my emails could have backed up my story might have made for a different ending for me.
One thing that worries me about this decision is that I'm not sure whether your average judge knows how easy it is to forge emails. I could come to court with a bunch of ASCII that I claim you sent me. If the judge isn't techno-savvy he'll think that's "proof" that you sent it. The other thing that bothers me is mentioned in the article. People think about email as an informal medium like conversation. They'll be afraid to use it if they think that it's legally the same as writing a formal contract. Or they'll have to put a stupid .sig: "this email does not represent a legally binding contract."
My concern is the legal ramifications of this case. If email were to become legally binding as a form of contract negotiation and agreement, will we begin to see many e-mails begin with legalese that's as complicated as a Microsoft EULA? I can see it now... Overnight, e-mail from lawyers would multiply in length by over 300%, making email servers perform double duty. Maybe an exaggeration, but lawyers are a cautious bunch.
Here is a question for you: How can email be legally binding by adding your full name to the end of the email, but I still can't fax contracts with a clearly legible signature? At least, last I heard, you could do that for intent, but the actual document had to still be snail-mailed. Here's another good question: Don't most contracts have to be signed by a public notary or a witness? Maybe this isn't the case for realestate purchases.
One final question: If the plaintiff wins, does that mean that all the "super" deals I can get from those who spam me would now be legally binding? If so, great! I've always wanted to "Be Debtfree at no cost to you..."or "Be in a positive cash flow in 48 hours", or even "Add 3-6 inches to your penis with this miracle pill."
This struck me as a weird ruling at first, then I realized the judge actually has a better insight into the situation than us!
The weirdness is the "Statute of Frauds." Verbal contracts are not binding in a handful of situations, and sales of Real Property are one of them. (Real Property is real estate, easements, etc., transactions that still need to be traceable hundreds of years from now.) In these cases you *must* have a written contract.
But then I remembered that a "written" contract just means that it was reduced to "tangible" form. This usually means something written on paper, but email is just as good as long as all parties stipulate that the contents of the messages have not been altered. (If the messages where PGP-signed, this wouldn't be an issue since you could detect alterations. Otherwise paper is still a far better choice.)
Contracts need to be signed, though, and email isn't signed is it? Then I remember the research I did when a few particularly clueless individuals gave me grief about my illegible signature.
According to the UCC, a "signature" is any tangible mark indicating consent. Nowhere does it say it has to be a cursive representation of your own name in your own hand. It could be printed, it could be completely illegible. It could be a mechanical reproduction applied by your secretary with a "signing machine." This is also why your bank will cash one of your "unsigned" checks - if you hand-wrote the rest of the information, *that* becomes your signature since it indicates an intent to pay. Viewing the bodies of email as self-signing, in a legal sense, isn't a far stretch. In this particular situation (negotiating terms of a contract), the alternative is to believe that one party was attempting to defraud the other.
The only remaining question is whether the other party is who they claim to be, but this isn't a one-off message. This was an exchange that discussed something personally known to both parties (the property being sold), so the risk of impersonation is low. More importantly, it sounds like the issue is whether email can be viewed as a written contract, not whether any of the messages were forged.
For every complex problem there is an answer that is clear, simple, and wrong. -- H L Mencken
IANAL -- I am not a lawyer.
Several people have commented already that email is "easy to forge." It is if you only have one side of the conversation. Easily fixed. We already know from literally hundreds of cases that e-mail is discoverable in a lawsuit. So as Plaintiff I would demand "all electronic mail purporting to be to or from account@domain.name on any computer owned by Defeadant", take all my messages to and from the Defendant and get it on CD-ROM, and when I have both CD-ROMs together start matching my e-mail list with his e-mail list. Because you can demonstrate that there was indeed a conversation, you can then verify the authenticity of the e-mail exchange.
For mail stored electronically, there is a wealth of verifying information contained in the headers to a mail message. You have the path the mail took through the Internet, so that it's tracable to the first Internet-connected Mail Transfer Agent, and sometimes even to the originating computer if the MTAs do their job of adding Received: header lines properly. Depending on the level of logging at the various MTAs, you may well be able to obtain third-party verification of the transfers, the length of the letters, and the purported From: and To: headers. Successfully forging every little piece of information is possible, but it's hard to also jerrymander the server logs and the electronic copies on the other side. Very persusasive in an argument of authenticity.
Think why there has traditionally been signatures on documents. The point was to ensure the identities of the parties, that the parties had the intent to enter into contract, and that the parties were aware of the contract. The signature provides all three points.
Now, with the e-mail exchange, do we have a contract? That would depend. In order to have a contract, you need: an offer; an unqualified acceptance; specificity as to subject matter; and, consideration. That's one thing the judge will have to decide.
Now, how many people save all their electronic mail at home? I know that more than 3/4 of my non-spam mail ends up in the electronic trash can, which is religiously emptied multiple times a day. That said, *any* incoming business traffic gets filed in a mailbox folder specific to the client. All outgoing traffic is saved automatically by my mail client in the "Out box", timestamped with the time the MUA sends the mail to my MTA. In turn, the backup system takes the mail and saves it to a file server, and eventually makes it to a back-up CD.
Now for the fly in the ointment: was there the required intent to contract on the part of both parties? This is where part of the argument may well lie. Did the seller in question, in the reasonable belief that the ONLY valid contract was one one paper signed by both parties, intend during the e-mail exchange to enter into contract by virtue of the e-mail? I believe the seller could argue that the e-mail discussions were preliminary negotiations, and not the contract itself, based on his belief that until he puts pen to paper there is no contract. The argument isn't perfect, but with the right support it should win.
Ah, but dung heaps rarely attract only a single fly. The Plaintiff Buyer may well have a complaint against Defendant seller because, according to the article, the two parties did agree to terms and had MADE A SPECIFIC PROMISE to each other to execute a real estate contract. Now we go to the intent of Plaintiff and what Plaintiff did because of the promise. Things get sticky, because if Plaintiff did something (like sell his/her existing house in anticipation of being able to move into Defendant's house) then there is a problem.
A lot of the judge's decision is going to turn on MASS law, both statute and case law, and I'm a long way from that state. I'll let people who know the law in the neighborhood discuss these points further.
In any event, this case will test some legal precepts about electronic mail and how to verify its authenticity. Well worth studying.