Email Salutation Creates Legally Binding Offer To Settle, NY Sup. Ct. Rules

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You can lose a great deal with the click of a send button, especially since the New York Supreme Court handed down a ruling affirming that an email salutation was sufficient to create a valid and binding offer to settle, enforceable against the defendant insurers, in Forcelli v. Gelco Corporation on July 24 2013. Despite the fact that the defendant’s attorney submitted the offer to settle via email and the correspondence was subscribed via e-signature rather than by handwritten signature, the unanimous New York Supreme Court reasoned that:

Given the widespread use of email as a form of written communication in both personal and business affairs, it would be unreasonable to conclude that email messages are incapable of conforming to the criteria of CPLR 2104 simply because they cannot be physically signed in a traditional fashion.

The ruling is significant to New York business owners, executives, CEOs, managers, sales agents, attorneys and employees everywhere.  Email communications may be construed as valid written offers to settle a dispute when there is evidence of intent to make an offer.  So, how do you protect your business when your agents and employees are usually on the frontlines of negotiating deals with suppliers, vendors, retailers, wholesalers, clients and customers?  It may be possible to mitigate your risk by:

  • Considering whether the content of your email communication contains the essential elements of a valid legal contract including (a) an offer, (b) acceptance of an offer, (c) an exchange of consideration which is either a promise to do or provide something in exchange for something of value and (d) intent to enter into an agreement.
  • Qualifying your emails with words such as “This communication does not constitute an offer, nor does it demonstrate an intent to create a valid or enforceable legal contract.”   Depending on your type of business, other language may be necessary to protect your business and cover your assets.

When in doubt, consult an experienced contracts lawyer in the New York area.

Posted in Civil Litigation

Tagged contract, e-signature, legally binding agreement, New York Supreme Court

Topics:  Contract Formation, Email

Published In: General Business Updates, Insurance Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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