Legislature Enacts “5 Second Rule” For Electronic Contracts To Sell Real Property

The Statute of Frauds has been a part of Anglo-American jurisprudence for centuries.  It made its first appearance in the wake of the English Civil War (yes, they had one too but for very different reasons) when King Charles II decided that it was time to crack down on “fraudulent practices which are commonly endeavoured to be upheld by Perjury and Subornation of Perjury”.   Back then, everyone understood what a writing was.  Now, technology has made us far less certain.

The California legislature recently amended California’s Statute of Frauds (Civil Code Section 1624) to provide that an electronic message of an ephemeral nature that is not designed to be retained or to create a permanent record, including, but not limited to, a text message or instant message format communication, is insufficient to constitute a contract to convey real property, in the absence of a written confirmation that conforms to the requirements of Section 1624(b)(3).  AB 2136 (Daly).

I found the legislature’s use of the word “ephemeral”  to be intriguing, and perhaps unnecessary.  The only other time “ephemeral” makes an appearance in California’s statutes is in the Public Resource Code where it is used to describe streams.  The word is a derived from the Greek word, ?f?µe???, which means living but a day.  Thus, something is ephemeral if it is short-lived.  Because the new statute requires that the electronic not be designed to be retained or to create a permanent record, the added requirement that it have an ephemeral (i.e., short-lived nature) seems purely redundant.

 

Topics:  Contract Formation, Contract Interpretation, Statute of Frauds, Text Messages

Published In: General Business Updates, Commercial Real Estate Updates, Residential Real Estate 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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