Can an exchange of emails create a contract?

Contract LawShort post and cannot go into too much depth for obvious reasons however I approached a company to buy a domain name, I offered £3000 to which I received a reply.

I advise that we are happy to accept your offer in the sum of £3,000 plus VAT

Excellent, that was 23rd April and I was over the moon so sent a cheque which was presented at their bank the next day and I later received an email to confirm receipt of payment and that the forms would be completed and sent on to myself, almost 4 weeks later I get a letter through the door this morning stating that

I apologise for the delay in this matter, however whilst discussing this matter with our solicitors we have been advised that we are not in a position to sell the item.

Argh, now what is just as worrying is communication with my local solicitor seems extremely at odds with what I have read, I was told:

An exchange of e mails is not sufficient to form a binding contract. I assume you did not have any written agreement other than the e mails. At first glance I would say you have no remedy here.

What?…that just doesn’t ring true, the main criteria for a contract would be

  • Offer
  • Acceptance
  • Consideration
  • Intention to create legal relations

From what I can find in reference to a binding agreement is that it can be done by email, especially seeing as they accepted my money, so now I have a refund cheque which I am unsure whether to cash as would that be acceptance of my refund, the reason I am frustrated is the domain is worth a lot more than £3k to myself especially if I could develop it.

So, don’t accept the first bit of advice you get from a solicitor!
I really need to find out whether there is a real reason they cannot sell or whether it’s a change of heart, I shall pursue it.

I am gutted, I have a list as long as my arm of deals which have not come off recently.

About Scott Jones

Scott hails from the north east of Scotland and started earning online at the end of 2000 building websites for local businesses during which time he won an award from Lord Alan Sugar for Excellence in Enterprise. After having quite a bit of success with domaining Scott mainly runs educational evergreen websites which generate over 3 million visitors per month but is always on the lookout for a fresh thinking out of the box way to turn a buck. Follow on Twitter.

Comments

  1. Scott at least here in India, an email is considered by law to be official form of communication and thus any agreement done through it is official, as long as there is a digital signature present to verify the identity.

    • Well, that’s exactly the issue. 99.9% of emails are not digitally signed, and I’m guessing Scott’s weren’t either. Emails can be spoofed if you know your way around an MTA. So it would be hard to tie this to a binding contract

  2. Good luck,it’s certainly worth the extra effort to see if you can get it.

    I had a very similar thing yesterday with one of my advertisers, where I needed an amendment to their TOS. This is the email they sent me:

    Is it possible that you still accept the clause? Unfortunately, it is something that is hardcoded in our system to sign into your account that we can’t get around. However, I have written on file that you are not required to be exclusive with us. It is also written in this email chain as proof. I can promise you, that it will not be a problem for you. If it would make you more comfortable having me sign something and fax it over saying that you are not exclusive with ******, I would be more than happy to do that so we can get things started again.

    In the end I asked them to fax it to me and after reading what you just posted I’m pleased I did.

  3. I spoke a different solicitor who agrees that in certain circumstances an exchange of emails can produce a binding contract and he has agreed to look into it for me. {shrug}

  4. If you are trying to get the domain do not cash the cheque. Whilst it is harder to confirm a legally binding contract through email, here in the UK its quite good in the fact that the law will be on your side.

    One of the biggest defences that you come across in a case like this is proof of ownership of email. Since a decision maker actually cashed your cheque into a company account not only did they acknowledge the offer and accept it. They pretty much sealed the deal by depositing the cheque.

    Give em hell.

  5. Find a better solicitor your first one clearly does not know contract law.

    There is absolutely no doubt that they entered into a contract here and an exchange of emails is more than adequate, contracts can be formed verbally or even just by responding to an advert (Google Carlill v. Carbolic Smoke Ball Company for info on that).

    • Thanks John, I remember doing a tiny bit of law as a trainee accountant in a past life and thought a contract can be made verbally or by letter and felt sure this case had merit with the acceptance and correspondence by email.

      • Palgrave’s Contract Law by Ewan McKendrick is an excellent reference on the subject.

        … and I really need to get some better bedtime reading material!

        • The only suggestion i can give is not to encash the check and meet someone who can help you out in getting the domain name at the price you had a email contract. There is no point they can move back now since they have already recieved your complete payment.

      • I’m with you on this one. One possible exception, though, is if the person with whom you corresponded did not have authorization to act on behalf of the owner. You and I could establish an agreement for me to sell you Google.com, but it wouldn’t be valid because I can’t act on their behalf.

        I didn’t ever think about this until the last contract I signed included a clause that stated that both parties were authorized to enter into the agreement. I thought, “Well that’s unnecessary,” but then I realized that it covered both of us for yet another thing that could go awry.

  6. srsly.

  7. That’s really annoying – you might find this Nominet appeal interesting reading although not particularly encouraging for your case

    http://www.nic.uk/disputes/drs/appeals/?contentId=4590

  8. The ireland dot co dot uk DRS was similar. The ‘consideration’ part of the contract is critical apparently.

    My 2p.

    Thks

    MZ

  9. They have ceased any communication with myself since the receipt of the letter with proposed refund, I cannot get any reply from them, however I have asked for a VAT receipt 🙂

  10. At least here in the U.S., an exchange of email absolutely can create a binding contract. And their cashing of your check followed by the communication attempting to back out of the deal is great evidence of a contract.

  11. Had a similar problem two years ago so know how you feel.

    The point is an exchange of emails CAN constitute a contract, but doesn’t necessarily do so. The same is true of a verbal contract (I had a verbal agreement too, but it emerged that the person wasn’t “authorised” to make such as angreement . . . ).

    Best of luck, but personally I would cash the cheque and get on with your life. There are countless opportunities out there.

  12. John Parry says:

    I had a similar experience with my rental lease agreement – the agent sent me a rent increase notice by email and the tribunal stated that email was not a legal form of delivery. Transposing that into your situation I suppose it would relate quite well in that email would not be accepted as a method of entering into a contract.

  13. I know this topic is a little old, but yes, it’s my experience through legal advice that email can be a vehicle for a binding contract. What’s evident here is that the contract is implicit; i.e. there would have been no deal unless the emails were sent/received. As George points out, the other party has to be legally ‘qualified’ or ‘authorised’ to enter into a contract; i.e. not a minor or not the owner or bona fide agent for the property, but I would throw £100 to another solicitor if I were you Scott. Unless of course this is now dead and buried.

    • Yes I did seek representation Dale, they confirmed I had a binding contract, it now turns out the Administrator had previously sold the goodwill & other intangible assets(which included the domain) so was not in a position to sell – so I am now trying to buy from the new owner. I could take the administrator for breach of contract but it would not bring me the domain so a long and frustrating episode that rumbles on, hopefully one day I can secure it!

  14. Samantha Price says:

    Yell UK cheated me into a contract with an email that asks for a password and if you provide them with a random password in the email then you “SIGN” a contract. This is whilst the rep told me the password provided holds a specific price for the service.. Not that it binds me into a contract! Completely cheating me and my company. DO NOT DO Bussiness with Maria Baker, Sarah Jane Hornet or http://www.yell.co.uk / http://www.yell.com.

    • Joanne Brown says:

      Hi Samantha, Im sorry to hear about your experience with Yell, but I must disagree. I currently have two Sponsored listing weblinks with them online in addition to 2 full page adverts in the Yellow pages book amongst other things. Initially when I began advertising with Yell in 2001, everything was signed for using faxes / post. I now only use the encrypted email to agree to orders. I must say, it is laughable that you name these specific reps’ when it was yourself that actually put in your password – thus agreeing to a contract. I willl always ask the rep to ring back to give me time to read the email properly, however I generally like them staying on the line to talk me through what im signing for. I have only ever had great dealings with Yell.com & Yellow pages book & have had excelent responses to the adverts. I think the lesson here is that it is 2009 & if somthing is agreed for by an email, then you have effectively signed for it. I question how Yell ‘cheated’ you into signing a contract, possibly you got cold feet?? Regards, Joanne.

    • Samantha I think it’s disgraceful that you named the two individuals you dealt with – as one of yell.co.uk’s many satisfied customers, I have to say the encrypted password system is a great time saving device, and it is unfair of you to blame others for your own incompetence.

    • I have started up a new company,
      I registered on-line to put up a free ad on yell.com, they called me then and spent 40 minutes on the phone selling me a better ad ,gave me all the facts and figures of how this could help my business and i sucked in well. That has happened last October (2009). I was miss-leaded all the way ’till the “confirmation” e-mail. I was thinking of starting a cleaning company and I’ve set-up a trial website as well.
      When I’ve agreed on the price which the consultant told me over the phone (around £500) for one year he asked me to replay on his e-mail saying that this is to confirm identity. I asked him is I should read the email first and he said that there is no need and it is the same that he told me already so I stupidly believed and confirmed.
      Straight after that I have got an e-mail with all details including the full price which was higher than the originally quoted by the salesman. He just forgot to mention about the VAT. You can imagine how that small detail makes all the difference. I called him straight away and ask about why I was miss leaded. And so on and so on. Finally I told him that I don’t want the service any more.(and I didn’t even start to use it, never log in). He promised to get back to me with solution but never did so.
      Next week I’ve decided not to proceed with the company (I have never register such a company really) so I’ve cancelled the website (that includes the e-mail accounts) and just for the record they do not have my real tel. number as I gave them (by mistake) lucky me, my old number which does not exists any more.
      After I have got the first paper pack from them asking for my signature I ignored it because I was thinking that if I don’t sign there won’t be a contract
      And so the money chasing letters started to coming. Now they are saying that they will give my details on a debt collection agency.
      I am not entirely sure what they are really able to do and should they prove first that there is such an agreement between them and me or should I prove all that what I said above (that I’ve been miss-leaded and did not agree those conditions) and take them to court.
      I will be happy to hear your opinion….

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