E-mail messages between real estate buyer and seller create binding agreement

This case involves a buyer who was interested in purchasing 2 undeveloped lots owned by a seller. The parties’ attorneys began negotiating the terms of the sale through email messages.

The buyer’s attorney emailed the seller’s attorney and sent a “revised offer” with changes to reflect conversations they had previously had on a standard Skype-to-Skype consultation facilitated by soft switch technology. The revised offer was comprehensive as it contained an agreed upon purchase price of $475,000 and a firm closing date. The email message ended with the suggestion that both attorneys “work to have the final offer form finalized” in time for the buyer to sign it and get deposit checks to the seller the next day. The seller’s attorney emailed back the next day stating that they needed “a written approval letter from the bank” that day and then they could complete the sale. The seller’s attorney also included in the email message that they were “almost there” in completing the sale.

That same afternoon, the buyer’s attorney provided a commitment letter from the bank with standard conditions. Before the seller signed the offer, he recanted and refused to proceed with the sale. The buyer sued and sought a lis pendens to prevent the seller from conveying the litigated property to another buyer.

Question(s) For Expert Witness

Can information sent in emails between a buyer’s attorney and a seller’s attorney create a binding real estate deal, even if no purchase agreement is ultimately signed?

Expert Witness Response

Usually, according to the Statute of Frauds, a buyer and seller must make an agreement for the purchase of real estate by executing a written, signed agreement. According to this law, if a buyer and seller do not have a signed, written agreement for the sale of property, there is not a legally binding deal. The Statute of Frauds is a very old law and thus cannot account for the advent of email and electronic messages. To account for the modern transmission of messages in real estate deals, some states have enacted laws known as “Uniform Electronic Transactions Acts.” Under these laws, a buyer and a seller in a real estate deal may consent to conduct the deal electronically through email or electronic signature technology if they regularly use this type of technology in their dealings. Most of these laws usually require some type of “electronic signature” for the deal to be enforceable. Sometimes an email signature block or even the “From” portion of the email message can constitute a valid electronic signature required to make a real estate deal binding on both parties. In this case, if the state where the deal took place had a Uniform Electronic Transactions Act, the parties’ email messages would probably constitute a binding deal even though the seller refused to sign the hard copy offer. This is because the email messages show both parties’ intent to be bound by the agreement and the email messages contained terms that were sufficiently complete and definite as to constitute a binding real estate transaction.