In any business, a vast majority of correspondence is done via email. You do most of your communication over email, and it may never have occurred to you to be very careful what you agree to. So this begs the question are emails legal documents, and can you be held liable to anything agreed on via email?
The answer is yes.
While even a verbal agreement these days is considered to be a legally binding contract, although harder to stand up in court, anything agreed to over email is contractually binding.
But What About Signatures?
Many people think that entering into a contractually binding agreement requires a written document and signatures of all parties. This is no longer the case.
As long as terms have been set out and agreed to, the physical contract is not important – in theory, it can be drawn out on a serviette, and signatures are no longer a requirement. If challenged in any way, the terms agreed via emails legally will stand.
How To Protect Yourself
To avoid situations that you or your business are not prepared for, there are a couple of ways that you can protect yourself. Be aware of these few things before sending out emails, or even verbal discussions.
- As mentioned above, contracts do not need to be physically signed to stand
- A contract may be entered into over several emails, not just one single email
- If reference is made to future formals agreements that have not yet been made, preliminary emails legally stand.
- “Implied-in-fact” – be aware of assumptions and implications as these also have to be honored
- Be aware of the terminologies that are being used. Legally binding words such as agree, agreement or accept should be changed for non-binding proposal or preliminary negotiations
- Be sure to state your intentions clearly and leave no room for confusion or assumptions
- If in doubt, read out your email to a third party to see if anything could be misconstrued in any way