The short answer is yes, but there are many considerations that need to be accounted for in determining whether an agent’s actions have bound their client.

The first question to address in the analysis is whether the agent had authority to bind their client. The agent may have express actual authority, which means that the client has explicitly indicated through words and or actions that the agent may act to bind the client. There could also be apparent authority, which is determined by analyzing the actions of the client and whether those actions would cause a third party to reasonably believe that the client intended to be bound by the actions of the agent.

The second half of the analysis comes into play if it has been determined that the agent did in fact have the authority to bind their client. The question then becomes, does the electronic communication satisfy the statute of frauds? The statute of frauds is a legal doctrine that requires contracts for the sale of land to include all essential terms and be in writing signed by the party against whom enforcement is sought. Emails or text messages from an agent laying out the specific terms of a deal may be sufficient to satisfy the requirements of the statute of frauds. In fact, even incorporating by reference to a document containing the essential terms may be sufficient.

With the prevalence of using technology in negotiating today’s real estate transactions, it is easy to see how an agent could easily bind a client. The simplest way to avoid this potential pitfall is to preface email and text messages regarding a transaction with a simple statement that the communication is for negotiation purposes only and that anything said by the agent does not create a binding transaction. It is also advisable to have a similar disclaimer attached to all email communications. Best Practice is to negotiate in person or over the phone.

For more information regarding these topics authorized callers should contact the MAR legal hotline at 800-370-5342 or e-mail at legalhotline@marealtor.com.