Can an E-mail Agreement be a Binding Contract?

Much of today's business is conducted over e-mail, and
it's possible to bind yourself to a contract through
email, either deliberately or inadvertently.

If an e-mail or chain of e-mails clearly states an
offer for entering into a deal with all of the
material terms, and the other side responds by email
accepting the terms, then there's a good chance that a
valid contract has been formed -- even though no
signatures have been exchanged. So be careful. If all
you intend is to negotiate the issues leading to a
formal written and signed contract accepted by both
parties, make sure you say that in your e-mails.

In addition, in June 2000, President Clinton signed
the Electronic Signatures in Global and National
Commerce Act, which set a single national standard for
using electronic signatures in contracts and other
legal agreements. The law allows businesses to send
co pies of signed documents electronically and to store
archived copies of these documents in electronic form.
Although there are certain exceptions, many routine
commercial transactions are covered under this law.
The law even allows for the electronic notarization of
legal documents.

The most important consequence is the fact that
consumers can now "sign" contracts over the Web by
simply pushing a button, clicking a link, or
completing some other simple action. This means that
two parties can negotiate, sign, and exchange copies
of a contract without ever meeting face to face,
signing a physical document, or producing a hard copy
of an agreement. And, as far as the law is concerned,
such an agreement can be just as valid as a written
agreement using actual signatures.

The law specifies a list of documents that cannot be
signed electronically, including wills, trusts and
estates; marriage, divorce, adoption, and o ther family
agreements; court documents and filings; utility
service terminations; eviction, foreclosure, and
repossession notices; health and life insurance
termination notices; and documents referring to the
handling or transportation of hazardous materials.
State laws may also require that certain types of
contracts, such as real estate purchase agreements,
need to be in writing and signed by the parties.

 

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