Can an e-mail exchange create a binding contract?
The short answer is yes!
With the proliferation of electronic communications, it is not surprising that courts are increasingly called upon to address claims alleging the creation of a binding contract based upon an exchange of e-mails.
The Appellate Division, Second Department recently held that e-mail communications between parties were sufficient to create a binding contract. Law Offs. of Ira H. Leibowitz v. Landmark Ventures, Inc., 131 A.D.3d 583, 15 N.Y.S.3d 814 (2d Dep’t 2015) involved breach of contract claims related to services provided by the plaintiff. In examining e-mail communications between the parties, the Court found “[b]y the plain language employed” by the parties in e-mail communications, it was clear that the plaintiff made an offer to provide services for a certain fee and that the defendant accepted the offer, creating a binding contract.
The Appellate Division, Third Department addressed a similar situation in the recent case In re Estate of Wyman, 128 A.D.3d 1157, 8 N.Y.S.3d 493 (3d Dep’t 2015). The decedent and the respondent purchased an improved parcel of real property. After the decedent’s death, her executor commenced a proceeding against the respondent to turn over ownership of the entire parcel to the estate, claiming that a series of e-mails between the decedent and respondent had created an enforceable contract to transfer sole ownership of the property to decedent. Upon examining the e-mails, the Appellate Division found that there was no contract because the e-mails did not establish a necessary term of the claimed contract: the price to be paid for the transfer of the property. It appears from this decision that if the e-mails in question contained evidence of an agreement on price, the Court would have found a binding and enforceable contract in the e-mail exchange.
While communicating by e-mail may seem informal, these cases make clear that parties to an e-mail exchange must exercise care to avoid unintentionally creating a binding contract. An otherwise valid contract cannot be undone simply by concluding with “Sent from my iPhone.”