Did Your Email Create a Binding Contract?

According to many experts, more than 90% of business in today’s marketplace is transacted in electronic form. As you are probably aware, Florida law permits the signing of contracts by electronic signature. In fact, many realtors use electronic signatures to finalize contracts for the sale and purchase of real estate. However, many people do not realize that an exchange of emails can also create a binding contract and even possibly amend a real estate contract, based on the content and circumstances surrounding the email communication.

The Florida Electronic Signature Act (Fla. Statutes §668.001-006) provides that, “unless otherwise provided by law, an electronic signature may be used to sign a writing and shall have the same force and effect as a written signature.” Based upon the definition of an electronic signature under the statute, a signature block in an email could be deemed an electronic signature, binding the sender to the statements in the email. This Act has been relied upon to find that an e-mail exchange between parties constitutes a “writing signed by the parties” as required to satisfy the statute of frauds.

While these Acts provide for a very effective means of conducting business in an efficient, cost and time-saving manner, it can also create problems when parties do not necessarily intend an email regarding a potential business agreement to become a binding contract with enforceable legal provisions.

So, what can you do to avoid unwittingly entering into a contract through an email communication? Under the Florida Uniform Electronic Transaction Act (UETA), whether the parties agreed to conduct business is determined from the context and circumstances of the transaction. As such, if an email communication clearly states that it is not intended to create a binding contract, the communication will not create an enforceable agreement. Those who want to ensure that none of their emails can create a contract can include a disclaimer in the email signature block such as:

“Disclaimer Regarding Uniform Electronic Transactions Act (“UETA”) (Fla. Statutes §668.50): If this communication concerns negotiation of a contract or agreement, UETA does not apply to this communication. Contract information in this matter shall occur only with manually affixed original signatures on original documents.”

As always, should you have any questions regarding the foregoing, please consult with your real estate attorney.

Sincerely,

Berlin-Patten, PLLC

This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.

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