Before you send that next email when negotiating a real estate transaction, keep in mind that, pursuant to the Uniform Electronic Transactions Act, Massachusetts General Laws, chapter 110G, an email may satisfy the Statute of Frauds, and, therefore, bind parties to a real estate transaction. That point was driven home by a recent Middlesex Superior Court decision in the case of Feldberg v. Coxall (May 22, 2012).
In that case, plaintiffs Ian Feldberg and Michael Rodgers claimed that, through a series of emails, they had entered into a binding agreement to purchase undeveloped land owned by defendant Harold Coxall. Coxall claimed that the parties’ email exchanges did not constitute a sufficient writing to satisfy the Statute of Frauds, which requires that a contract for the sale of real estate be, “in writing and signed by the party to be charged.” Coxall, therefore, moved to dismiss the plaintiff’s complaint as frivolous.
Not so fast said the court. As the court noted, “whether an email exchange can satisfy the statute of frauds” was “an issue of first impression.” The court further noted that:
In truth, the Courts have not yet set forth rules of the road for ‘the intersection between the seventeenth-century statute of frauds and twenty-first century electronic mail.’
However, the court then noted that, in fact, the Uniform Electronic Transactions Act is an attempt to set forth such rules of the road. Section 5 of the Act applies to, “transactions between parties each of which has agreed to conduct transactions by electronic means.” This section further provided that, “Whether the parties agree to conduct a transaction by electronic means is determined from the context and surrounding circumstances, including the parties’ conduct.” Section 7 is the heart of the Act, which provides that:
Section 7. (a) A record or signature may not be denied legal effect or enforceability solely because it is in electronic form.
(b) A contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation.
(c) If a law requires a record to be in writing, an electronic record satisfies the law.
(d) If a law requires a signature, an electronic signature satisfies the law.
Given this language, the court in Feldberg v. Coxall found that plaintiffs at least stated a non-frivolous claim that the email exchange between the parties satisfied the statute of frauds. The court noted that the parties’ email signature block or the “from” portion of the email may satisfy section 7 of the Act. Whether in fact the parties’ email exchange did satisfy the statute of frauds will never be determined because the parties have settled their dispute and dismissed the case.
However, given the plain language of the Act, email exchanges may satisfy the Statute of Frauds. To avoid this outcome, therefore, when negotiating a real estate transaction by email, parties and their counsel should add a disclaimer to their emails that provides that electronic communications, including e-mails, do not constitute acceptance of conducting transactions via electronic means, nor shall electronic communications, including e-mails, create a binding contract without a signed written contract.