E-mail Could Be Binding

Guest contributor Richard D. Vetstein of REALTOR®Mag says:

Imagine you're negotiating a purchase transaction by e-mail with the real estate agent representing the buyer. The price has been agreed to, and you're working out the buyer's financing options. The buyer is able to be preapproved, and you e-mail, "We're almost there." A draft purchase offer is written up and e-mailed to the buyer's agent, but before anything is signed, a better offer comes in. The seller wants to go with that one, so you immediately inform the buyer's agent of the situation. The buyer is upset and wants to enforce the deal. Much to your horror, the e-mails you exchanged may be enough for the buyer to sue to enforce the deal. This was the case under a ruling last year in Massachusetts.

In that case, Feldberg, et al. v. Coxall, attorneys representing the buyer and seller exchanged a series of e-mails about the deal, the last one attaching a revised, but unsigned, offer to purchase. When the seller pulled out of the deal, the buyer sued, claiming the deal had been sealed in the last e-mail.

The seller argued that nothing had been signed, as required under a law called the Statute of Frauds, which varies by state but generally requires certain agreements to be signed, and sought dismissal of the claim. The judge ruled against dismissal, though, saying that, under a state law called the Massachusetts Uniform Electronic Transactions Act (similar laws exist in other states), an e-mail signature block or even the "from" portion of the e-mail may constitute a valid electronic signature in cases where the parties are conducting the transaction electronically, as these parties by all appearances were doing. The judge denied the seller's motion to dismiss, opening the door for the court to look at whether the e-mails in fact constituted a binding agreement.