Thanks to the growing popularity of smartphones, it is not uncommon to conduct the bulk of your business over email, including contract negotiation. While corresponding via email can help close a deal more quickly, it can also lead to unintended consequences.
For instance, many business owners don’t realize that an email can form a binding agreement. Courts across the country have found that a series of messages can still meet the requirements of an enforceable contract.
In fact, the test for a valid contract is the same whether the court is looking at a paper document or an electronic one. In order for a contract to be enforceable, there must be a valid offer and acceptance, supported by consideration.
If one party proposes alternative terms in response to an email, the offer is considered rejected and the negotiations continue. In addition, the parties must still intend to be contractually bound. While intent need not be explicitly expressed in the email correspondence, it just must be evident that both sides were planning to be bound by the terms discussed in the email.
Given the fact that it may be difficult to infer the parties’ intent from a string of emails, it is advisable to be explicit regarding whether you intend to form a legally binding agreement over email. To err on the side of caution, business professionals may want to consider including a disclaimer stating that any email negotiations must be confirmed by a separate written contract executed by the parties.
How We Can Help
If you are concerned about the validity of your business contracts, it is imperative to consult with an experienced business attorney. Contact us today at 832.510.2900 or click here to schedule a free consultation.