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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.
This means that all those companies that send me spam are bound to help me lose weight, reduce my debt, and work in the comfort of my own home!
This is terrific!
I wonder why there is even a discussion over it. A contract never needs a signature, every time you buy a quarterpounder at McD you make a contract. Even multi-million-dollar transactions at the NYSE are made without handwritten signatures. As long as it is clear who the two negotiators are there is no doubt that two declarations of intention are made.
The article makes a bit of a point about the email not having signatures. But "the writing is on the wall" for signatures. There are quite a number of retail outlets (Sears, Home Depot, etc.) that are now using the little electronic gadgets that collect your signature as a graphic and keep it in case they need it. This means that there are a growing number of computers that have collections of signatures in their databases. It is only a matter of time until some unscrupulous corporation starts using these to forge signatures. And it is a matter of an even shorter time after that until a victim proves in court that a signature is a forgery.
This will inevitably destroy the legal usefulness of signatures. An "electronic paper trail" such as was used in this court case will be a much more reliable proof of contract. This case is just one of the first in a series that will change the way that "proof of contract" works.
It is, of course, not terribly difficult to forge email. So we should have some fun cases to study in the next decade or so, as the courts try to come to terms with this brave new world.
Those who do study history are doomed to stand helplessly by while everyone else repeats it.
As the chain of emails grows, the liklihood of one or both of the parties' communication being faked diminishes quickly.
:-)
When you send an email, you can fake the headers, but if you have repeated two way communication, including quoted material, it's obvious you have a communication between two verifiable email addresses.
The questions then become:
1. Do the email addresses track back to the individuals in question?
2. Did the parties involved in the dispute engage in this conversation together, or not?
3. Could someone else have had complete send/receive control of the email account in question at the time over the time of the disputed conversation? (Man in the middle attack possibly?)
Claiming one did not send emails when one did is a dangerous game when testimony under oath comes into play.
What we have is a case of a "verbal" contract, though with written transcription as evidence.
The judge may be breaking some interesting ground with this decision, but I don't think he's too far off the mark.
And yes, digital verifiable signatures would be better.
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."
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
Contracts never need to be in writing. However, enforcing contracts is another matter. Real esate contracts are unenforceable unless they are in writing and signed. This is called the Statute of Frauds (i.e. certain kinds of contracts, including real estate, must be in writing if you want to be able to force the other party to abide by the terms of the contract in court). The part of the article that is odd is that the court appears to think that the email between the husband-owner and the buyer was sufficient to bind the wife-owner because she is referred to. That goes against the Statute of Frauds because the entire point of it is to make the agreement explicit rather than implicit. If there is nothng explicit to show her acquiescence to the agreement and she does co-own the property, I'll be stunned if this court or, more to the point, an appeals court finds that an enforceable contract exists.
Q:How many libertarians does it take to stop a Panzer division? A:None. Obviously market forces will take care of it.
It states:
Certain seems to be satified here.Sig: What Happened To The Censorware Project (censorware.org)
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.
Optional, and I think seldom supported. Definitely not on by default in sendmail. Just as importantly the receipt could be forged, so it isn't real useful.
Many (not all) systems use one large file for each mail folder. The one I used that didn't (MH) still marked up the file and lost the original time stamp (plus one can use "touch" to alter that as well).
Yes it is illegal, and immoral, but it is very hard to prove which party did it! If the two of us are in dispute, how could the court know which of is has the invalid document? In this country they will not just jail us both, nor will they pick at random. You need a lot stronger case then the one that proves at least one of us, but not which one of us forged the mail!
Of corse it doesn't match! The problem is proving which (if any!) was unedited! Is the "contract" saying $1.86mil or $1.94mil the real one?
Nobody will get away with an obviously unreasonable price, but one can claim the price was 10% or 20% higher (or lower) then the real one. You may not get that price, but you may well be able to get out of the "contract" by claiming you agreed to something different then what the other guy has.
So, when I've had sexual discussions with women over email, where we tell each other what we want to do to each other...that is binding? OK, fine by me. I can't wait to start fulfilling these contractual obligations.
In Bushworld, they struggle to keep church and state separate in Iraq as they increasingly merge the two in America.
Of course, then, sometimes people send out long memos, or detailed documents, or whatever... Either way it's gonna be a mess.
The Mongrel Dogs Who Teach
If either of the parties had denied that the emails were valid, then the judge may have ruled differently. However, from what I could tell from the story, neither party denied the authenticity of the email exchanges. Therefor, the judge made a sane ruling and said that the contract was valid.
The part of the article that is odd is that the court appears to think that the email between the husband-owner and the buyer was sufficient to bind the wife-owner because she is referred to.
How is this odd? Marriage laws frequently consider a married couple to be legally equivalent to any other kind of legal partnership... If this was the argument used no longer they lost the case.