Email Messages Can Create Binding Contracts
In Shattuck vs. Klotzbach , the Plymouth Massachusetts Superior Court determined that a seller, who negotiated and agreed upon terms of a purchase and sale agreement via e-mail, could not default simply because it lacked a script signature. This case could still be appealed, but it’s concept and decision should be of importance to all REALTORS® in Berkshire County and beyond.
When the buyers sought to enforce their rights to purchase the property, and the seller refused to sell, the seller brought a motion to dismiss arguing that any promise to sell could not be enforced, because e-mail communications were not a “signed” writing, as required by the Massachusetts statute of frauds.
The Superior Court found that a “typewritten signature” could suffice to bind the parties to this transaction.
Negotiations for the sale of property began when the buyer e-mailed a $2 million offer to the seller. The sellers responded via e-mail, countering with an offer of $2.225 million. The sellers also indicated that e-mail was their “preferred” manner of communication.
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1. Negotiations and promises made between a Seller and Prospective Purchaser via email were deemed an enforceable agreement. 2. Several weeks of back and forth negotiations occurred. 3. Seller indicated his preference to communicate via e-mail 4. Both parties agreed on a price and contingency terms and referenced a purchase and sale agreement to be drawn according to those terms 5. Each communication was signed with the typewritten name of the parties 6. Telegram Precedent 7. All writings, read together, contained all necessary elements needed for transfer of property according to Statue of Frauds |
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The parties then entered into a purchase and sale agreement for $2.2 million, but this agreement was later terminated because the buyers could not secure a “wharf license” required by the purchase and sale agreement.
Negotiations picked up again several months later when the buyers e-mailed another offer, this time for $1.85 million, stating that they could close within thirty (30) days.
The seller again responded via e-mail, and informed the buyer that he would sell the property for $2 million if the buyer agreed that there would be “no contingencies”. This offer was not accepted. Several weeks later the seller sent yet another e-mail to the buyer stating that the property had not yet been sold and that if the buyer was still interested in a clean deal at $1.825 million”, to let the Seller know. The following month, the plaintiff buyer sent another e-mail to the defendant stating that he was still interested, and that he only wanted a “quick walk through inspection” before signing a “simple” purchase and sale agreement.
Using e-mail communication again, the plaintiff buyer told the defendants that their attorney would draft a purchase and sale agreement containing “no usual contingencies” with the closing to be as soon as possible. In every instance, e-mail communications between the parties ended with the typewritten name of the sender.
When the closing did not occur, the buyer sued to enforce the purchase and sale agreement and the seller brought a motion to dismiss, claiming that e-mail communications did not satisfy the writing requirement of the Statute of Frauds, since no agreement technically had been signed. The Massachusetts Statute of Frauds, (G.L.c 259, §1,) states that “no action shall be brought… upon a contract for the sale of land… unless the promise, contract or agreement upon which action is brought, or some memorandum or note thereof, is in writing and signed by the party to be charged therein or by some person thereunto still lawfully authorized.”
FINDINGS:
The Plymouth Superior Court judge cited prior case law holding that a telegram was a “writing sufficient to indicate that a contract or sale [had] been made and signed by the party whom enforcement was sought”. The judge then held that the “typed name at the end of an e-mail was more indicative of a party’s intent to authenticate than that of a telegram, as a sender of an e-mail typed and sent the message on his own accord and types his own name as he so chooses”. Since the seller had sent e-mails offering to sell his property with his signature typed at the bottom “intentionally and deliberately”, the judge found that a reasonable trier of fact could conclude that the e-mails sent by the seller regarding the terms of the sale of his property were “intended to be authenticated by the defendant’s deliberate choice to type his name at the conclusion of the e-mails”.
The judge also found that the e-mails contained all essential elements necessary for the sale of the property and that all of the writings related to the subject matter could be read together in order to satisfy the memorandum requirement of the Statute of Frauds.