Contracting by Email...Legal?

These days, it's pretty common that a REI might find himself negotiating some property agreement-buy, sell, or lease-by email.



I certainly have done so, and actually find myself doing so daily and routinely.



As the experienced REI knows, just because there is a "first" set of docs signed on a Purchase/Sale deal, that does NOT necessarily mean that ALL negotiations on that deal have been finalized or closed forever, or as the law says: "In Perpetuity".



There are frequently last-minute items that aren't negotiated until closing day...such as "do the appliances that I saw in the RE, come with it?"



So just how legal or enforceable might continuing negotiating by email be?



This is one area where the law has come close to keeping up with real life-instead of drifting in its wake and only becoming law lots of years later.



In 1999, a body of law known as The UNIFORM ELECTRONIC TRANSACTIONS ACT came into being, and its provisiopns have, since, been passed into law by 36 states.



The UETA effectively says that email or other electronic communications are just as good, valid and legal as any other writing...and if there is a provable meeting of the minds

(legal agreement) that came about through the exchange of email, that is as good as any other agreement in writing.



So if your deal has been modified by further agreement by email, subsequent to the original P&S docs that were signed, and your state is one of the 36 "adopting" states*, then you may have a legally enforceable "modified" agreement.



While no prudent lawyer would recommend you put much reliance on such "subsequent" email agreements, and a prudent lawyer would recommend that any significant agreements actually be put into a written, formally signed P&S Addendum...which is then delivered to the title/escrow co. for its use in preparing the legal docs relating to your P or S deal.



Just be aware that if you find yourself having some real substantial deal that's been agreed by email, the law does say you may indeed have it " in writing". And that you may not be totally out in the cold having NO written agreement.



I can visualize the deal that's been done with Sam & Sally Seller on Monday, by such email contact, where both Sellers and Bob Buyer have reached a real agreement by email...then Tues, the Sellers, or one of them, is "taken home" by the Lord.



Bob Buyer might then have to, or be able to, prove his written agreement to the Probate Court.



There is even language in the UETA to the effect that a Notary's Acknowledgment, all by email, would be as provably valid as if the NP had signed his/her real signature witnessing the deal.



It would of course, have to be proven that the NP had been right there, had personally witnessed that person's "signature" (or having agreed to the deal by email).



So if you're 6 states away, and it's critically important that your deal is signed & notarized TODAY, then all parties might proceed with such elecronic (email) approval.



I'd want to personally talk to the NP and make sure he/she is right there, has witnessed the agreement, etc...and such a NP has probably been tutored on this kind of deal by his own NP organization or State licensing body so knows how it should work.



*Even if your state hasn't enacted the UETA, it may very well have enacted its own version of this law, to the effect that email communications are as good as any other agreement in writing.

Comments(1)

  • JohnMerchant3rd January, 2004

    Faxes are also included in and under UETA.



    Just realized I forgot to mention fax transmitted docs, but they are equally included in the UETA and its state enactments around the country.



    Just remember to save important faxes as they come in so you can prove their receipt, also whatever cover sheets are incldued.



    Thus a contract might be built or modified or come together via fax & email & original signed docs...all of which could paint a very good picture of a complete & very tight contract.



    John Merchant

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