Catholic sites and blogs may rely on agreements to purchase web hosting, hire freelance writers, or post terms of service. Getting the contracts done online will save time and trouble, but the convenience can be as much a curse as a blessing if not approached with care. A good example is a recent ruling by the Tennessee Supreme Court finding that an exchange of emails can create a binding agreement.
Forty-seven states have adopted the Uniform Electronic Transactions Act. The other states, Illinois, New York and Washington, are bound by the federal version known as the E-Sign Act. Both laws acknowledge agreements in electronic form are just as enforceable as agreements signed on paper. The following principles apply:
- The parties must agree to transact electronically.
- The parties must be able to keep and print a copy of the electronic agreement.
- The contract can be “signed” electronically busing any electronic sound, symbol, or process that is logically associated with an electronic contract.
- Something as simple as clicking “I Agree” or relying on a more elaborate digital signature process.
- The party “signing” the electronic agreement must express some intent to “sign” the agreement. For example, a statement such as “by clicking ‘I accept,’ you agree to the terms that will result in an enforceable contract, just as if you had signed your name to an agreement on paper.”
Be careful when you negotiate deals online; even an exchange of emails can create a binding contract. A fascinating example is the story of a feuding niece and aunt in which the Tennessee Supreme Court enforced a settlement accomplished by an exchange of emails.
In Waddle v. Elrod, octogenarian Earline Waddle and her niece, Lorene Elrod quarreled over rights to four acres of land in Tennessee. The day before their dispute went to trial, the attorneys for warring family members exchanged emails to settle the dispute. Ms. Waddle’s attorney sent the following email to Ms. Elrod’s attorney:
This confirms that we have settled this case on the following terms:
Elrod deeds property interest back to Waddle, Both [sic] parties sign full release, Waddle bears no court costs. Let me know if I have correctly stated our agreement.
Ms. Elrod’s attorney replied:
That is the agreement. I understand that you will draft the deed and take a shot at the court’s order. No admission of guilt is to be included.
Three weeks later, Ms. Elrod told her attorney that she changed her mind. She no longer wanted to settle the case. Ms. Waddle then sought to enforce the settlement in court. Ms. Elrod argued there was no binding agreement, but the Tennessee Supreme Court disagreed. “The UETA, recognizing that all sorts of transactions are now routinely conducted by electronic means on a daily basis, obviates the need for a handwritten signature,” the court added. “The parties, through their attorneys, evidenced an intent to finalize the settlement by electronic means; thus, the UETA applies,” the court concluded.
Make sure that each party is clear when it intends to agree to terms of a contract. Extra caution is needed when negotiating by email. Any declaration that an offer is accepted could create a binding agreement.