“Words, once spoken, can never be recalled.”
This sage guidance from Wentworth Dillon applies with equal force in the world of instant text communication where emails, once sent, can never be withdrawn. Lawyers and parties involved in negotiations of any stripe must be aware of recent and rapid changes to the law governing contract formation. With increasing frequency, courts are enforcing contracts created by the exchange of emails that are surprisingly informal and bear little indicia of having been signed or “subscribed.” This commentary discusses a recent New York decision that broadcasts the sweeping changes that are afoot.
Legal education and practice remain rooted in the common expectation that parties to a contract have not committed to be bound until there is a signed or otherwise subscribed final agreement removing any doubt as to authenticity. Recent statutory shifts and judicial decisions have dramatically changed the landscape as seventeenth century doctrine collides with twenty-first century reality. Whereas courts formally required that certain types of agreements, such as settlement agreements, be evidenced by a written document signed by the parties, this cornerstone of contract law is eroding. Many courts, recognizing the rise of email as the main means of communication, hold that simply hitting “send” from an email address containing the name or “signature” block of the sender constitutes a subscription for the purpose of creating a binding agreement. This may have a noticeable effect on the language that lawyers place in and around their signature blocks. It will certainly have an effect on how lawyers negotiate settlement agreements by email.
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