Business development · 2 October 2020

Are emails legally binding?

email legally binding
To decide whether an exchange of emails forms a legally binding contract, you have to look very carefully at the words used
Grid Law founder David Walker explores the conditions that could turn an exchange of emails into a contractual agreement.

In this article:
1. Can an email form a legally binding contract?
2. Is a promise made in an email legally binding?
3. Are admissions made in an email legally binding?
4. Do you want emails to be legally binding?

Can an email form a legally binding contract?

Yes, emails certainly can be legally binding. But whether they are or not, depends on their context and what is said within them. For contracts to be legally binding, five essential elements must be present:

  1. An offer
  2. Acceptance of the offer
  3. Consideration (i.e., some form of payment)
  4. An intention to be legally bound by the contract
  5. Certainty as to what the parties have agreed
In simple terms, two people must reach an agreement between them. So, one email on its own can’t be a legally binding contract. However, there’s no reason why an exchange of emails can’t contain all of these elements. Therefore, an exchange of emails can form a legally binding contract.

To explain this further, let’s say you’re involved in a payment dispute regarding a product you sold to a customer. The customer is making excuses and doing all they can to wriggle out of their obligation to pay you.

The first argument they may make is that there isnt a legally binding contract between you. They say that all you had was an exchange of emails where they enquired about your products.

The trouble is, when two people exchange emails, their language tends to be more relaxed than when they’re preparing a formal contract. This can lead to ambiguity in what they say and important details could be missing. Because of this, there may not be sufficient certainty to form a contract.

To decide whether an exchange of emails forms a legally binding contract, you have to look very carefully at the words used.

An enquiry along the lines of Im interested in your product, can you send me some more details?? is not an offer.

Even a statement as specific as I would like to buy your product? may not amount to an offer.

If you respond saying Great, would you like it in red or blue?? this indicates there are still important details to agree.

It may then take several emails back and forth to clarify the offer, for it to be accepted and for all of the other details to be agreed.

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contracts

Does a handshake form a legally binding contract?

Whilst a handshake is very symbolic, it means very little from a legal perspective. Therefore, we need to put the handshake aside and see what we are left with.

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Is a promise made in an email legally binding?

Next, the customer may argue that the product wasnt what they were expecting so they shouldnt have to pay for it.

During a sales pitch and negotiation, the customer will likely ask many different questions about the product. You will answer them and try to persuade the customer to make a purchase.

Your comments about the product will fall into one of three categories.

There will be:

  1. ‘sales puffs?;
  2. Representations; and
  3. Statements of fact.
I explained what these three statements mean in a previous article: Are statements made during contract negotiations legally binding?

So, you need to look back through the emails to see exactly what was said and determine how much reliance your customer placed on that statement.

Again, the exact wording is very important.

If the customer asked a general question such as Does your product do X?? and you replied It should? this may be a representation.

Representations are not binding terms of the contract. However, if they induced your customer to make the purchase, they may have a claim for misrepresentation if it turned out to be untrue.

If your customer made a specific comment such as I need your product to do X? and you replied It does? this will be a statement of fact.

Statements of fact, such as these, are legally binding.

Are admissions made in an email legally binding?

Knowing that your customer is being difficult and just making excuses not to pay, you dig back through your emails. You find one in which they say how much they love their new product.


 
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ABOUT THE EXPERT

David Walker is the founder of Grid Law, a firm which first targeted the motorsport industry, advising on sponsorship deals, new contracts and building of personal brands. He has now expanded his remit to include entrepreneurs, aiding with contract law, dispute resolution and protecting and defending intellectual property rights.

Business development