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Email, a Legally Binding Contract? 206

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.
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Email, a Legally Binding Contract?

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  • That's ridiculous. Email can be easily forged. And I would think a legally binding contract would somehow involve a lawyer.
    • In this case I don't think anyone doubts the authenticity of the emails (it appears to have been a long running series of emails discussing the selling and purchasing of a house, in a way that it is doubtful anyone is going to forge), but rather the defendant is claiming basically that because it wasn't a signed document that they are not bound by it. Yet just as the oft-known verbal contract, you don't have to sign a contract in many cases. Seems pretty clear to me.

    • That's ridiculous. Email can be easily forged. And I would think a legally binding contract would somehow involve a lawyer.

      Then it was incumbent upon the seller to demonstrate that the email was in fact forged. Such was not the case, he did not contest that the emails were in fact from him, he merely argued that the emails do not represent a legally binding contract.

      I think the seller and his lawyer would have been wise to contest the emails on the grounds of forgery (wise, though sleazy). Lacking a real signature it is impossible to prove the emails are not fogeries.

      I think this is also a point of warning for people who use email to discuss the terms of a contract, although such emails may at some point be legally binding, such a contract would be very weak in the face of an attack on the grounds of forgery.

      -josh
      • It is not impossible to prove that the emails were genuine. People have a "voice" in email just as they have in real life, and it's difficult to fake the 'voice' just as it's difficult to forge a signature.

        Think about it. We all have the words we misspell frequently, the misplaced punctuation, the way of phrasing things, our capitalization or lack thereof, and words we unwittingly switch. (There-their, effects-affects) People have been 'caught' by their writing style before (I'm thinking Unibomber?)

        If there are enough emails over a long enough period of time, then forgery becomes quite impossible. On the other hand- forgery is easy to fake--Simply alter your way of writing and avoid the things you usually say-- throw in a few mispelled words that you never would have 'accidentally' mispelled, misplace a few commas. Just randomly. It might throw someone off track if you say "Hey, that doesn't match my 'print'."

        Of course there's still records from your ISP. I think it would be easier to falsely claim a verbal contract.

        -Sara
      • Under Federal Rules of Civil Procedures 11, an attorney is supposed to verify with every document that they sign and file with the court that it is filed in good faith and based on valid legal theory.


        You are suggesting that the attorney commit fraud on the court. Of course to prove that you did send it, they may require you to produce your computer so their experts may search it. Of course, if they were smart, they would submit a request for admission first. Then if you deny that you sent the email, they can hit you with the costs of recovering the data and investigating and deposing the ISPs to confirm that it was your email.

    • It can be forged, but the origins of the email was never in doubt. Both parties admitted they had sent the email, so the only question was whether you could have an "email contract". It does in some ways make sense, since you can have a "verbal contract", and "email contract" isn't much different.
    • So can hand written signatures. That doesn't make them any less binding.

      Besides if negotations were done by phone or f2f which is how most deals are worked out today, there would be no communication records at all....

    • by AgTiger ( 458268 ) on Saturday March 16, 2002 @12:08PM (#3173171) Homepage
      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. :-)

      • There is a statute of fraunds in many jurisdictions. The statute of frauds require that certain types of contracts be in writing, because the likelyhood or the temptation of fraud.
        • Large amounts of money.
        • Contracts to pay the debts of another.
        • Contracts that cannot be completed in a year.
        What exactly is covered by the statute of frauds depends on the jurisdictions.
        • IANAL, but I am under the impression that this often includes any contract to buy/sell real estate.

          • You are correct. I thought I included that on the list.


            IANAL until, after I go to law school, pass the bar, and confirm that your retainer check cleared.

    • IANAL, but in many states a handshake is a legally binding contract as as any verbal agreement-- all that is required is an agreement of terms of exchange. Now, verbal contracts are not very enfoceable because they are hard to prove that they exist, and email may be a bit easier to prove, but because it can be easily forged. If you did not write the email and it was forged, then it is more like a verbal contract. If I deny writing the email, then there is no proof of assent. That is where witnesses come in handy (and why most contracts are signed by them).
      • Verbal and handshake agreements are binding here in Massachusetts, but real estate is an exception. The "parol evidence" rule that generally permits oral contracts does not apply to real estate. Where land is concerned, it has to be in writing. I actually had to invoke that once when a seller claimed after the fact that he had intended to change a clause in the purchase and sale agreement, and that I had orally agreed to it. He was lying, but that didn't have to be proved, because that type of contract has to be in writing.

        Now Congress has legalized electronic signatures, and doesn't require any specific technology. And the authenticity here was undisputed. So holding that this email is "writing" seems pretty logical.
        • I once had a somewhat sleazy dealer "forget" to put a key clause into the written contract on a mobile home, but I read it carefully and called him on it before signing. It did get written in. I suspect that he'd actually made the price a bit more attractive than he could really afford, expecting to make it back and quite a lot more on that one change. So he scr***d himself.
    • Nope, sorry, a legally binding contract does not need to have a lawyer involved at all. Think of how much worse the world would be if this were true! IANAL, but I believe you need the following to have a legally binding contract:

      1) An agreement as to the goods being sold. A & B must both understand the contract to cover the same thing, and they must both have the same understanding of the thing.

      2) An offer

      3) An acceptance of that offer

      Now if the the goods are worth more than a certain amount, a written contract may be necessary and there are a lot of clarifications. But certainly no lawyer is needed.

      Someone who did better than I did in Contracts in Law School can get into the specifics. Just don't forget to mention Rose of Aberlone.

    • Not mine. I sign every one digitally. They can be forged, but only if you break into my box and hack my GnuPG secret keyring passphrase.

      Walk into court with a forged email from me, and I'll walk in with my sent-mail folder, showing I've signed every email for a long time, with every exception being documentable as to why.

      Oh, maybe the US government could forge my signature, but then again, they could also hold a gun to my head and make me sign anyway.
    • And I would think a legally binding contract would somehow involve a lawyer.

      Hey, if EULA's are legally binding despite the fact that no sane person would actually agree to such a one-sided deal, E-Mail exchange has got to be 10^40 times stronger grounds for establishing a legal contract.

    • That's ridiculous. Email can be easily forged.

      Sure, but hey, so can a signature on a piece of paper, or a recording of a telephone call.

      If you make certain sorts of agreement with someone, whether they are written down on a piece of paper or not, they can constitute a legally binding contract in many places. The concept of a verbal contract wouldn't exist if everything had to be written down. If there is some disagreement and you have to fall back on the contract, then clearly someone's going to have to prove to a court that their claims (including whether or not a contract exists and what it says) are valid, but that's a very different matter.

      And I would think a legally binding contract would somehow involve a lawyer.

      And you would be wrong, and in need of getting a clue before discussing legal matters. There are certain things that, in certain places, must be overseen by a lawyer, or sometimes some other reputable authority; wills and such tend to fall into this group. But a lawyer is certainly not necessary to form a contract in pretty much any jurisdiction I know about. If one were, shopping would be a very tedious experience.

      Insert standard disclaimer here: IANAL, if you get your legal advice on /. you're a fool, this post is not legal advice, etc.

    • There would be severe consequences for any type of forgery, if it were presented in court as authentic.

      Besides, the defendant didn't argue that the e-mail was faked. He just said that it wasn't legally binding. If the defendant argued that the e-mail was faked things might have gone differently, but with his admission that the conversation was authentic, that seems to solve the problem of authenticity. Dosen't it?

      Other e-mails have specified the requirements for a binding contract better than I could.
  • Terrific! (Score:4, Funny)

    by cascino ( 454769 ) on Saturday March 16, 2002 @11:55AM (#3173121) Homepage
    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!
    • This might mean those companies are bound to remove you from their mailing lists if they offer to do so at the end of their messages--which most do.

      But then, I'm not a lawyer... Anybody with some legal background have thoughts on this?

    • Oh, I would so dearly love to see spammers prosecuted for breach of contract if they can't show in court that their products really do make you lose weight, increase your penis size, get rich quick, etc., etc ... Aggressive enforcement in the US and other countries (and I think just about every civilized country has breach-of-contract laws) would probably reduce spam volume to nearly zero in a matter of months.
  • But then again, filing my taxes electronically this year, the feds accepted three pieces of information to make up the e-signature: last years tax amount, a pin (5 chars long), and my ssn

    Perhaps the judge wouldn't feel so certain of the ruling if someone had sent a nastygram from his email addr, with his name typewritten to prez@whitehouse.gov
    • Perhaps the judge wouldn't feel so certain of the ruling if someone had sent a nastygram from his email addr, with his name typewritten to prez@whitehouse.gov

      No, according to the story the home seller is not disputing the fact that he was the one who actually sent the email.

      • And probably the crucial issue -- and I agree with former posts, the seller looks like a weasel, smells, like weasel, probably tastes a weasel :)
    • 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.
  • Huh? (Score:5, Informative)

    by Ozan ( 176854 ) on Saturday March 16, 2002 @11:58AM (#3173133) Homepage
    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.
    • That was my first reaction as well. A contract can be made over ordinary text e-mail if the identity and intention is clear. Yes, an e-mail can be forged, but that is covered the same way a forged signature or impersonation. There doesn't seem to be any question of identity or intent here. After all, e-mail is just communication. Signing something just helps ensure identity, but it is not the only way to establish it.
    • IANAL, but a contract (enforcable at law) requires several things:

      1. The parties must be capable of entering into a contract. This generally means being of legal age and not judged incompetent (i.e. being found incompetent by the court), but not necessarily: in Canada (at least) minors can enter into contracts that are legally binding on the other party, but not on the minor. There are also certain situations where one can not refuse to enter into a contract with a minor (generally for "necessaries" or tools of a trade) if one is generally in business.

      2. Legal Consideration. There must be something of value exchanged between the parties. However, certain considerations are not legal: for example promising to not marry in exchange for payment. Generally things not viewed in the public interest (like this) can not be the consideration of legally binding contracts. They may still be contracts, just not enforcable by the courts.

      3. A meeting of minds. The parties must have actually agreed to the terms. Contracts need not be in writing: verbal contracts and even handshakes are perfectly valid, but generally frowned upon because the terms may be difficult for a court to determine, and whether both parties agreed to the same terms (i.e. the "meeting of minds"). A series of email exchanges, therefore, can serve as strong evidence that a meeting of minds occured.

      Now, you're all probably arguing that email can be faked, and this is true. However, in civil cases, the burden of proof is not on the plaintif: only a preponderance of evidence to back the plaintif's claims is necessary. Generally, in this case, if there were any non-email contact between the parties to suggest that some of the email was genuine, that would be pretty damning evidence: i.e., "oh yeah, they were talking about the house sale, and exchanged emails about it" sworn under oath, would be pretty strong evidence.

  • The case, Shattuck v. Klotzbach, is scheduled to be heard in May in Plymouth Superior Court by Judge Ernest B. Murphy.

    I guess we'll really find out the importance of being Earnest.
  • Erm... (Score:2, Troll)

    by Levine ( 22596 )
    The particulary look to me like ...
    I think I speak for all of us when I say:

    Uh, what?

    Regards,
    levine
  • After all, if there isn't a dispute about whatever the messages were forged or not, then I don't see any reason for this not to be a binding contract.
    What *is* the difference if I sign my name or type it?

    And before you get to forging, it doesn't appear to be the case here, but email forging is not much easier than signature forging, and that can be verified by digitally signing the email.
  • IANAL, but I always thought any agreement could be enforced, whether it was in writing or not. I've certainly heard of verbal contracts; of course, without any written record you'll generally have trouble proving that any agreement was actually made.

    While I'm sure people will bring up the risk of forged email, that isn't really any more of a legal issue than forged signatures on written contracts.
    • IANAL, but I always thought any agreement could be enforced, whether it was in writing or not.

      Most agreements, but not all. Real estate contracts generally are required by law to be in writing.

      • Most agreements, but not all. Real estate contracts generally are required by law to be in writing.

        The legal definition of "in writing" (indeed "signature") is rather wider than common useage, however...
    • While I'm sure people will bring up the risk of forged email, that isn't really any more of a legal issue than forged signatures on written contracts.

      Signatures are somewhat hard to forge, you need to gain a skill, risk having an expert conclude it was forged and going to jail. Using a text editor on a mail folder is normally quite easy, undetectable, and the only thing an expert can say is "there is no way anyone can tell if it was forged -- either of these documents could be the original".

  • by jc42 ( 318812 ) on Saturday March 16, 2002 @12:01PM (#3173148) Homepage Journal
    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.
    • by Anonymous Coward
      This means:

      "I reserve my right not to be compelled to perform under any contract or commercial agreement that I did not enter knowingly, voluntarily and intentionally. And furthermore, I do not accept the liability of the compelled benefit of any unrevealed contract or commercial agreement."
    • 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.

      Corporations do pretty terrible things everyday, but they are mostly *legal* terrible things. What you suggest is fraud. They don't work that way.

      I'm more worried about unscrupulous employees of these corporations that have access to such databases and might sell them to scammers. These digitized signatures can be easily inserted into faxes and used for identity theft.
      • Corporations do pretty terrible things everyday, but they are mostly *legal* terrible things. What you suggest is fraud. They don't work that way.

        Corporations, particularly large corporations, also do a great many illegal things every day. One household name corporation in the US has even committed numerous murders. Unfortunately such corporations always have friends in high places (or can buy them if they don't have them) who can make the problem go away, and even in the unlikely event that they get charged, they can afford armies of the best available lawyers to ensure they never get convicted.

    • 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.

      Effectivly this is simply a "rubber stamp". This is hardly a new idea, indeed at one time the norm to authorise a document was by use of a seal or in China by use of a stamp known as a "chop".

      It is, of course, not terribly difficult to forge email.

      But how easy is it to forge email and have it not stand out amongst genuine emails between the same parties.
    • 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.

      ...which is only trivially easier than scanning your signature from the receipt.
      • Yeah; I was wondering if someone would point that out.

        (As for the claim that corporations never do anything illegal: What wasn't that moderated as "funny"? The only way I can think that someone would seriously make such a claim is that they just arrived on this planet. If that was truly posted by a human, it had to have been with tongue in cheek.)
  • Not surprising (Score:2, Insightful)

    by JordanH ( 75307 )
    IANAL.

    However, I don't believe there's anything magic about a signature. Verbal contracts are often enforceable, so why not email?

    It doesn't appear that either side are disputing that these emails are not authentic. Seems like it would have at least the same force as a verbal contract.

    This would all be subject to various local laws. I know that in Texas, only written contracts are enforceable for real property. Verbal contracts, even when witnessed, are not.

    As I said, I am not a Lawyer and I'm not giving legal advice, just making observations.

  • For the emails to be binding they have to examine the ISP logs really. That is assuming the ISP keeps accurate logs of traffic.

    I doubt the judge assumes that nobody could impostor others in the "from" field of an email.

    Tom
  • From the article...

    Using e-mail, Shattuck and Klotzback had settled on the price; the e-mail referred to the purchase and sale agreement that would be prepared.

    Um, agreeing to prepare a contract is not the same as agreeing on a contract.

    According to the article the only thing they accomplished via email is what the initial contract arrangements would be, he never agreed to sell his house.

    Either I read that wrong, the article is wrong or there isn't a case.

    Tom
  • Did the defendant agree that they really wrote the mail? Not only is it easy to forge email, but it is trivial to change your record of the email (the sender could edit messages in his sent folder, the receiver could edit the messages in their 'home sale' folder).

    It may suck to agree to pay $1.86mil and be asked to pay $1.92mil, but it would suck just as much to ask $1.92mil and have to accept $1.86mil just because the plaintiff knows how to use vi!

    I don't think email is a workable contract medium. Too trivial to alter. With a precedent that email can form a contract I don't see how anyone who wanted to weasel out of a contract would admit to "signing" the real thing rather then edit up their copy and claim that is what they "signed"!

    • E-mail has reciept notification. In this case the sender of an e-mail recieves an e-mail telling when the sent e-mail was recieved. If the reciever of the e-mail edited the mail the date and time at which the file was last edited will be different than the time and date it was recieved. Therefore the reciever has edited the mail. Which is now, just as illegal as editing a contract without the other partys' consent. Also If you send an e-mail you keep a copy of it in your sent folder. If it doesn't match what the other guy's got, then hoo hah! Nobody will be able to get away with using vi to get millions of dollars.
      • by stripes ( 3681 ) on Saturday March 16, 2002 @01:01PM (#3173347) Homepage Journal
        E-mail has reciept notification. In this case the sender of an e-mail recieves an e-mail telling when the sent e-mail was recieved.

        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.

        If the reciever of the e-mail edited the mail the date and time at which the file was last edited will be different than the time and date it was recieved

        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).

        [editing the mail]
        is now, just as illegal as editing a contract without the other partys' consent

        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!

        Also If you send an e-mail you keep a copy of it in your sent folder. If it doesn't match what the other guy's got, then hoo hah!

        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 be able to get away with using vi to get millions of dollars.

        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.

  • Email Contracts (Score:4, Interesting)

    by ZuG ( 13394 ) on Saturday March 16, 2002 @12:09PM (#3173174) Homepage Journal
    I had a similar (although less important) situation arise. I had agreed on a deal for two young ferrets (found through yahoo classifieds). We had extensive e-mail communications about what the animals' personalities were, that they were friendly and would not bite/attack people, etc. We had agreed on a set time and I made the hour drive to meet them and possibly purchase them.

    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.

    • 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.

      That an agreement reached by email can be a valid and enforceable contract is a no-brainer. The difficulty is an evidentiary one - that is, the court must be satisfied that there has been no tampering with the messages. As long as the court is satisfied that this is the case, the email would clearly evidence any agreement reached.

  • Forgery (Score:3, Interesting)

    by smallpaul ( 65919 ) <paul@@@prescod...net> on Saturday March 16, 2002 @12:10PM (#3173178)
    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."
    • Re:Forgery (Score:3, Informative)

      by tomstdenis ( 446163 )
      That's what expert witnesses are for.

      I could bring a piece of paper in with your "signature" on it. A hand writing expert would examine it.

      Similarly a computer scientist of some sort would examine the logs of the various networks involved and see if the email could be real.

      Tom
      • Yes, expert witnesses will be available in high stakes cases. But in most of high stakes cases people will learn to be careful and do negotiations through lawyers anyhow. The problem is going to be in the small claims cases where the judge is in a hurry, the parties don't have lawyers, etc. Those cases often seem to come down to he said/she said already and if "he" or "she" happens to be a computer person they could make their side of the story much more believable quite cheaply with a forged email.
    • Re:Forgery (Score:3, Insightful)

      by md_doc ( 8431 )
      Forgery has nothing to do with this case though. He is not saying he did not send the e-mails what the guy is saying is that it is not a contract... which is incorrect. If I called him up and said "Hey I will buy your house for 1.895 million." and he said okay... then we have a verbal contract so why would it be any different if it is in an e-mail or a hand delivered letter or by the phone. A contract is a contract.

      Now this would be a totally different case if he said he was not the one that was sending the e-mail. I think it would also be a totally different case if he said "You know what... I don't want to sell it anymore". But the simple facts are he wants to sell it, he did send these e-mails, and someone came and offered him more money and now he wants the extra money.

      • Blockquoth the poster:

        If I called him up and said "Hey I will buy your house for 1.895 million." and he said okay... then we have a verbal contract so why would it be any different if it is in an e-mail or a hand delivered letter or by the phone.

        Except that every state, I believe, requires that certain contracts -- including, most especially, real estate transactions -- to be written in order to be enforceable. You can't just verbally agree to buy a house; you have to go through the closing procedure.


        The defendant is basically arguing that email is more like a phone conversation than an exchange of letters. In terms of how people view it, he might well be correct. Legally, it's less clear.

  • Instead of "Click here to agree to the Microsoft EULA", I guess we'll start seeing "Type your full name here to agree to the Microsoft EULA".
  • Although I'm certainly no MA lawyer (or any kind of lawyer).

    In most day-to-day contracts, no one cares if you sign your name in cursive. As long as you make some kind of mark that definately identifies you as a party to it, that's enough. Even printed names are sufficient, so email headers ought to work fine.

    The signature requirement is not a formality to closing a contract, though it can act as one. Rather, it is intended to ensure that people aren't accidently made parties or not made parties. This objection is only valid if he claims someone else was trying to sell his house, and pretending to be him.

    The only tricky bit is whether or not property contracts require certain formalities that this doesn't comply with. Sounds like there aren't any, though.
  • by nuggz ( 69912 )
    This is my opinion, IANAL.
    Verbal or implied contracts are valid in many jurisdictions. When you order food at a restaurant, you have entered into an implied contract to pay for the meal.

    If you make a verbal contract or agreement you are also bound by it, however it is difficult to prove and dispute. "I didn't say that" can easily shift the burden of proof.

    Email should come out as a documented verbal contract, not as strong as a signed notarized contract, but at least at the level of implied or verbal.

    To avoid this you have to be careful what you say ALWAYS. If the seller had just put any disclaimers that this wasn't a final agreement to sell, or that he had to check with his wife, or look into some other issues, he'd probaly be okay.

    Personally, when I explain a simplified situation (big part of my job) I always add a nice disclaimer, that this advice/opinion is dependant on many assumptions and specifics to this application. You would be surprised how often people take "what you said" and apply it to something else.

  • 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."
  • Said Beth Mitchell, a partner in the Boston law firm Nutter McClennen & Fish

    No wonder he lost, he was being defended by a squirrel and a fish...

    Actually, the first thing that came to my mind was a MST3k [mst3kinfo.com] sketch where Tom Servo and Crow play a game of squirrel and some sort of under water creature :-)

    Episode was number 816, Prince of Space

    /ex
  • by coyote-san ( 38515 ) on Saturday March 16, 2002 @12:24PM (#3173217)
    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.
    • by danb35 ( 112739 ) on Saturday March 16, 2002 @12:57PM (#3173331) Homepage
      Exactly what I was about to say. Note that Uniform Commercial Code, Article 2 only applies to contracts for the sale of goods (not land), but most of the principles in the UCC reflect the common law. In particular, from section 1-201:

      (38) "Signed" includes any symbol executed or adopted by a party with present intention to authenticate a writing.

      . . .

      (45) "Written" or "writing" includes printing, typewriting, or any other intentional reduction to tangible form.

      Doesn't mean the guy's going to win, just that it's not going to be thrown out on the grounds that the contract isn't contained in a "signed writing".
    • But then I remembered that a "written" contract just means that it was reduced to "tangible" form. This usually means something written on paper,

      It certainly need not be paper. One way in which people have been known to make a protest about paying something is the like of carving a cheque onto a paving slab. Perfectly legal but a big hassle for someone to take to the bank.

      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."

      It could be a stamp or seal. A lot of corporate headed paper has a disclaimer to the effect of "by default this isn't a contract". Because otherwise this could be considered a signed document.
    • 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.

      I don't agree. Other people have already said that the UCC definition may not apply, and I'm not sure that a mere typewritten name is sufficient to meet the requirements of the statute of frauds (the property law of my jurisdiction does require tat the contract be marked 'by the hand' of both parties, IIRC).

      Instead, the ruling can be explained by the doctrine of unconscionable reliance on the statute of frauds. Basically, although the courts recognize the requirement for a signed, written agreement for the sale or transfer of real property, they don't allow people to abuse the statute of frauds to engage in unconscionable behaviour, such as gazumping, which is exactly what happened in this case.

      Of course, I haven't read the ruling, so I can't be sure ;).

  • by jdcook ( 96434 ) on Saturday March 16, 2002 @12:27PM (#3173229)
    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.
    • 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.
      • 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.

        By a "legal partnership" I assume you mean those entities that the law regards as a "person" suchas a corporation, partnership, etc. A married couple is composed of two persons (since wives are no longer chattel). What I meant by "odd" was that it is almost certain that the husband cannot commit the wife to the transaction without her consent. Because of the Statute of Frauds, that consent will have to be by a signed writing or it is unenfoceable. The judge, according to the article, seems to think that the wife's written consent is not necessary. If that's true, the case is a moderately interesting bit of cyberlaw but a critical bit of family and real property law.

    • 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).

      You're right, but as I posted in another comment, the statute of frauds can be overriden in situations where the court would regard its enforcement to be unconscionable. Since the defendants are relying on the statute of frauds to try and gazump the plaintiffs, the judge has evidently decided that would be unconscionable.

      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.

      The doctrine of unconscionable reliance on the statute of frauds is part of the branch of general law called equity. Equity developed as a fuzzy, morality-based system of jurisprudence that sought to ameliorate the sometimes harsh consequences of the common law's desire to uphold strict legal rights. As such, equity sometimes plays fast and loose with the law, binding people where no legal obligation exists. There is a maxim of equity that states, "equity looks to intent rather than to form". Although there is no form (i.e. evidence of a legally-binding agreement) to indicate the wife's consent, the judge has decided that there is evidence of intent on the wife's part, and as far as equity is concerned, that is sufficient to bind her.

      • We're pretty far off on a tangent here so I'm not going to quote your response. I figure you remember.

        "Unconscionability" could conceivably allow the court to find that a writing satisfying the statute of frauds was not required for the enforcement of a contract concerning real property. Unconscionability can let a court do anything. But it is a high standard. The article certainly doesn't reveal anything about the wife's behavior that would so "shock the conscience" as to obviate the writing requirement. It reveals nothing at all about her behavior.

        Property Law was a long time ago but I don't recall a single case where unconscionability was used to enforce a contract against an individual who did not themselves contribute to the unconscionable action. It is easy to imagine that someone negotiating with a husband would reasonably believe the husband's assurances that he spoke for the wife as well. But frankly it is even easier for me to believe that someone buying an extremely expensive home would know that a writing is a key requirement for enforcing such contracts.

        I suspect that the article is leaving out important details. Most likely IMO, is that the emails help show how the plaintiff acted in reliance on the contract to his detriment. There are lots of cases where this additional, detrimental reliance is sufficient to get around the statute of frauds.
        • Hmmm. Where I come from, unconscionable reliance is backing out of a real property agreement containing all relevant details and lacking only in proper form. The actions of the vendor create an equitable estate in the property in the name of the purchaser. The only defence a third party holding a legal estate in the property can raise, IIRC, is lack of (constructive) knowledge of the dealings. The wife surely ought to have known about her husband's plans to sell the property, given the nature of their relationship.

          At any rate, it would be fruitless to speculate without access to the ruling.

  • "One of the very unfortunate things about this is that by allowing consumers to casually enter into what might be the most legally important transaction of their life, consumers are not benefitted," Lapatin said.

    IANAL - It seems to me that there was NOTHING casual about this transaction. When you buy a house, there is a large group of steps you go through before the P+S. There is however, an agreement that happens before that signing. This seller clearly made that agreement, and asked for the paperwork, and deposit check. He had already agreed to sell at that price. I'm not sure if this is a case of legally binding emails, as much as how much of a scumbag the seller is.

    Fortunately, seeing as the person could afford a house for almost (pinky raises to cheek) 2 MILLION dollars, he could afford a good lawyer to make more fodder for us!

    -Spack
  • IANAL, but I believe the most important thing in a contract is that the two parties have a "meeting of the minds." Which is to say that both parties agree to a set of terms, and understand what they're agreeing to. This is how verbal contracts can exist. Signatures just make it unequivocal that you agree, but a set of email messages where two parties clearly come to an agreement ought to suffice.
  • This is an example of why you should cryptographically sign your emails, whether that be with PGP, S/MIME, or something else.

    In this case, it would have made the plaintiff's case easier to prove, which seems like a bad thing if you're the defendant, but perhaps the defendant would have thought more carefully about what he was saying if he knew it could be proven he said it.

    But more importantly, in countries where digital sigs carry the same legal force as paper sigs (such as the United States), signing all your emails establishes an identity trail so that, if somebody else later forges an email with a forged signature, you can show a body of evidence that you use a different signature, and that therefore it isn't yours, it's just one that says your name.

    Since there isn't a "digital driver's license" to use to "prove" the validity of an esig, this body of evidence could be very useful to you in court.

    Remember the recent episode of identity theft [computerworld.com] Nick Petreley experienced? In part, this happened because he didn't establish an electronic identity in one place where he had a chance. In his case, it was a web account, not a digital sig, but a digital sig case could be far worse, because it would almost HAVE to involve the courts to be resolved.

    Wouldn't you rather have more evidence in your favor, not less?
    • Why would cryptographic signatures have made this easier in court? Nobody is disputing the authenticity of the emails.

      They are disputing whether those emails constitute a contractual agreement.

      • Quoting myself:

        but perhaps the defendant would have thought more carefully about what he was saying if he knew it could be proven he said it.

        If you are going to sign your name to a piece of paper, you think more carefully about what you're writing on it. Perhaps the same might be true of signed emails.

        I know I don't say anything I wouldn't want attributed to my name in my emails since I started signing them.
  • by Anonymous Coward
    IAAL:

    This is a simple 1st year law school question.

    There are no magic words of words or secret handshakes needed to form a contract you simply need 3 things (each with subparts):

    1. Was there mutual assent? (Viewed objectively.)
    2. Was there consideration or some substitute? (i.e. did you give something to get something?)
    3. Are there any defenses?

    Here, the trier of fact (judge or jury) felt that the emails constituted a showing of mutual assent. Mutual assent is traditionally shown by an (1) offer and an (2) acceptance.

    The prima facie case for offer is:

    1. Creates a reasonable expectation in offeree that offeror is willing to enter contract (K).
    2. A promise, or commitment to enter into K.
    3. Certainty and definiteness in essential terms.
    4. Communication to offeree.

    And the prima facie case for acceptance is:

    1. Accepted by party to whom offer is addressed (no assignment).
    2. Acceptance is unequivocal and similar to the offer.
    3. Communication to offeror.

    Of course you need to have not terminated the offer before acceptance. And, meeting each of these elements is a question of fact. So, the judge/jury listen to witnesses and evidence and decide what really happened. This is where "the email was forged" defense comes in, because it negates the YOU made the offer/acceptance.

    Even if you meet the mutual assent element of the traditional contract test, you still need to meet the other two elements.

    So, it is not unreasonable that an email, and handshake or even a pinky-swear would form a binding contract, if that is what you used to get to mutual assent.

    • As one of the many NALs here, I just wanted to offer thanks for the legal opinion (and, no, I would not construe it as advice, etc., since, among other things, individual circumstances vary).
  • by Seth Finkelstein ( 90154 ) on Saturday March 16, 2002 @12:58PM (#3173334) Homepage Journal
    I'm not a lawyer. But look at the "Electronic Signatures in Global and National Commerce Act" (aka E-SIGN)

    It states: [gcwf.com]

    Definitions of Electronic Signature

    The E-Sign Act contains the following definition for an electronic signature: "an electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record." Further, an electronic record is "a contract or other record created, generated, sent, communicated, received, or stored by electronic means."

    Certain seems to be satified here.

    Sig: What Happened To The Censorware Project (censorware.org) [sethf.com]

  • by satch89450 ( 186046 ) on Saturday March 16, 2002 @01:00PM (#3173344) Homepage

    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.

  • Thank you for agreeing to give me 10 bazillion dollars. Please deposit it in the following paypal account...

  • Of course there's a contract. Clearly both sides had reduced the agreement to writing, both sides had agreed to the same terms (a "meeting of the minds"), and there was no accusation of forgery. That's a written contract.

    People have made contracts by telegram for over a century. Why should E-mail be different?

    Either side could still raise the issue of forgery, but in this case, everyone agreed that the e-mails were genuine. So that's a nonissue here.

  • by praedor ( 218403 ) on Saturday March 16, 2002 @01:48PM (#3173534) Homepage

    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.


  • by gilroy ( 155262 ) on Saturday March 16, 2002 @01:50PM (#3173538) Homepage Journal
    ... Is email more like a letter or a phone call? It has the "look and feel" of a letter, but I would argue that most people use email more like a phone conversation: short, quick, and informal.



    Of course, then, sometimes people send out long memos, or detailed documents, or whatever... Either way it's gonna be a mess.

  • an e-mail based contract isn't worth the over million dollar fiberoptic cables it's transmitted over.

    I'm not sure if this proves her wrong.
  • Technically, a handshake can be considered a legally binding contract. The only problem is, when you get to court and one side says something differently from the other, and there's nothing in writing to back it up, its difficult to enforce.

    I'm not opposed to using email as a contract medium, as long as both sides agree that its legitimate. The problem is, when you're signing a contract for a one year ISP dialup service, its less significant if one of the parties fails to hold up their end of the bargian. When you're buying, or selling a house, car, or anything that costs more than the average person makes in a year, you want to make sure that the contract is as binding and unbreakable as possible, which means that NEITHER side should rely on email, espcially unsigned email as a legally binding contract.

    Simple rule of thumb. When you're about to enter a contractual agreement, consider what will happen if the opposite party regegs on the agreement. Are you going to sue? If so, then make sure that the contract will hold up in court beyond any reasonable doubt. If you wouldn't bother sueing, then don't worry about it. A handshake is good enough. Or an email.

    -Restil
  • It's important to note that the judge hasn't said that this definately is a contract, just that there's enough evidence to make this a reasonable case. So now they get to have the actual trial.
  • "You like the pool? Too bad, we're taking it with us."
  • Some are saying "email could be forged".

    Guess what. So can contracts. So can lots of things.

    A contract is a record of a negotiation. A way to show the terms to which all parties agree to. Serious contracts have witnesses also. Some are also notarized by a notary, or other 'important' people. Why? So you can't claim it was forged, or that you didn't understand the terms.

    Now... this person with the email. Yes, email is easy to forge. But is the guy claiming he never wrote the emails? No. He isn't denying that he wrote these...

    A contract does *not* have to be signed in ink. IT can be verbal. It can be written any which way, and it can be on the internet. In fact, it can simply be "Will you do this" "Yes"

    These can all be binding. The point is whether anyone can prove they were real.
  • Most contracts do not require a signature as a legal precondition to their enforceability. It suffices that the plaintiff prove the elements of a contract (offer, acceptance, consideration or a substitute for consideration) and be done, although those elements are often easier to prove where there exists a written and signed contract.

    However, certain contracts are only enforceable if there is a legally sufficient memorandum signed by the party against whom the contract is to be enforced. Among these contracts are those concerning the sale of an interest in real estate. The signature is a substantive requirement -- This so-called "statute of frauds" prevents enforcement of a contract, even when there is otherwise compelling evidence of a deal.

    The question, then, is whether an e-mail can constitute a legally binding memorandum (is it a writing, is its content sufficient to memorialize the deal for the statute of frauds), and whether the e-mail is signed. Depending upon the e-mail -- and the devil is in the details -- the answer can be a clear and unequivocal "yes" in the United States. There is ample common law to support these cases, but the recently adopted E-SIGN legislation and the e-signature statutes adopted in many states make this a no-brainer in many case.

    I don't have any fact sufficient to apply these general ideas to the given case, but that is the framework for analysis of these questions.

    In short, typing your name at the end of an e-mail document can constitute a signature in many or most cases. However, this only starts the analysis -- there is also the matter of proving the alleged e-mails are authentic, and that they are unforged and unmodified. In some cases and statutes, there may also be an obligation to prove an "intent to authenticate."
  • A couple days ago somebody sent me spam with the subject heading, "I owe you lunch."

    Is that a legally binding contract? Maybe if I track down this asshole I can sue him (or her) for a free lunch. Better yet, I'd love to force some spammer to actually produce the hundreds of hot young girls who are horny for me.

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