Agents need to be aware and protect their clients and themselves! Please read this important post by Martha Brown, regarding an email she received from Capitol Title. Are you putting yourselves at risk for a lawsuit by emailing without a disclaimer?
Thanks for sharing Martha!
Maryland Mortgage Mama
Can An E-Mail Become A Binding Agreement To A Contract?
So today while reading my emails one popped up from Capitol Title, a well known and respected Title Company here in Maryland. Like everyone I use email quite often and have found it to be a great way to keep track of what was said. But now after reading this I am certainly going to use the disclaimer if and when ever discussing an offer or anything that could be construed as such. You may want to do the same.
Below is what was said in the email from Capitol Title including the disclaimer suggestion.
We are all familiar with the requirement that a contract for the sale of real estate must be in writing to be enforceable. This requirement arises from a law called the "Statute of Frauds" which has been enacted in most states, in various forms, and provides that certain types of contracts are required by law to be in writing to be enforceable. The types of contracts generally included are contracts involving interests in land, contracts that cannot by their terms be performed within one year from the date of formation, promises to answer for the debt of another, promises made in consideration of marriage and contract (over a certain, stipulated amount) under the Uniform Commercial Code for the sale of goods.
The Maryland Statute of Frauds provision relating to real estate contracts (§5-104 of the Real Property Article, Annotated Code of Maryland) states:
"No action may be brought on any contract for the sale or disposition of land or of any interest in or concerning land unless the contract on which the action is brought, or some memorandum or note of it, is in writing and signed by the party to be charged or some other person lawfully authorized by him."
In light of the recent proliferation in electronic communication (e-mail in particular) litigation has occurred in several states on the issue of whether an e-mail, sent by a party to a transaction or that party's agent, can unwittingly satisfy the requirements of a "written agreement" and result in the formation of a contract between the parties.
Examples of cases in which emails have resulted in a finding that an agreement was formed that satisfied the statute of frauds can be found in cases decided in New York and Massachusetts in which the courts held that e-mails sent by parties or their agents in connection with a real estate sale, upon which the defendant had typed his name or which contained a salutation consisting of the defendant's name, satisfied the requirements of the statute of frauds and resulted in the formation of a contract.
As a result of these developments parties to real estate transactions and their agents may want to consider including, in any e-mail communications transmitting an offer, counteroffer, term sheet, contract, lease or other real estate related communication, an appropriate disclaimer to the effect that the e-mail in question may not form the basis of a binding agreement unless and until incorporated into a separate, mutually acceptable, written agreement signed by the parties. If a broker or agent is initiating or transmitting the e-mail, they may also want to include a statement that the broker or agent has no authority to bind their client and any terms must be incorporated into a separate, written agreement signed by their client to be enforceable.
Can an E-Mail Become a Binding Agreement To A Contract?
Seems The Answer Could Be YES!!
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Martha Brown CRS
Long & Foster Real Estate, Inc
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