Text Messages Can Create A Binding Contract – Sometimes - Sun and Planets Spirituality AYINRIN
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Author:His Magnificence the Crown, Kabiesi Ebo Afin! Oloja Elejio Oba Olofin Pele Joshua Obasa De Medici Osangangan Broadaylight.
People
in the real estate business, and other businesses, often agree to
things by email or even text messages. Are those agreements legally
binding?
A recent New York case
involving a lease dispute seemed to recognize the possibility that an
exchange of text messages could bind the parties. Under the facts of
that case, however, the court decided the text messages in question
didn’t quite do it.
In
the litigation, a property owner had sued a tenant for about $200,000
of unpaid rent. (It must have been a pretty nice apartment.) The
property owner’s representative and the tenant exchanged text messages
confirming a “settlement amount” of $143,000, with the security deposit
to be credited against it. The tenant said he would prepare a settlement
agreement. The property owner’s representative said he wanted to
inspect the apartment.
The
tenant argued that the exchange of text messages entitled him to
conclude the dispute by paying $143,000. The property owner didn’t
agree, based on two arguments, which the court accepted.
First,
the exchange of text messages didn’t contain all the “material terms”
of the settlement agreement. Presumably the property owner’s caveat
about inspecting the apartment implied the inspection might result in
additional terms of the settlement, such as an obligation for the tenant
to remove broken furniture from the bedroom or repaint the bathroom.
On
the other hand, if the court had wanted to treat the text messages as
binding, the court might have concluded that the property owner simply
wanted to check that the apartment was in reasonable shape, a fairly
standard requirement that the court didn’t necessarily have to conclude
was “material.” The court could have said – but didn’t say – it was a
sufficiently trivial loose end that the parties could still be bound by
their text messages.
The
second reason the text messages weren’t binding, according to the
property owner and the court, was the fact that they acknowledged the
parties would still enter into a formal agreement to memorialize the
settlement. If such an agreement was necessary, then implicitly the
exchange of text messages couldn’t stand on its own as a binding
agreement.
On
that question, too, the court could have come out differently. Maybe
the court could have inferred that the future settlement agreement was
merely a formality to implement an agreement that was already binding.
It’s hard to tell whether the facts would have supported that.
Although
the court decided this particular exchange of text messages didn’t bind
the parties, the court came to that result based on the specifics of
these particular text messages, and not because of a general principle
that text messages can’t be binding. To the contrary, the case implies
that in some cases text messages can be binding. That’s hardly new law,
but it may come as a surprise to some.
If
one’s goal is for text messages to be binding, one should avoid
suggestions that any binding agreement requires further documentation.
On the other hand, if one wants text messages not to be binding, the
messages should unambiguously state that additional steps need to occur
before there’s a binding agreement. The right approach can help prevent
surprises. No one should ever assume that text messages are always
binding or always not binding.
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