Post by Sapphire Capital on Sept 5, 2015 6:29:25 GMT 4
Contracts are agreements made to bind the parties for a specific purpose, they can be done in writing but also just over the phone or in the old handshake fashion. Email is just another medium of the exchange between the parties.
A contract must contain 4 elements:
An offer made by one party to another
Acceptance of the offer
“consideration” which is given by each party (normally goods or services by one party are exchanged for payment from the other party)
Intention to create a legally binding relationship
Some people use a clause "subject to contract" but courts have argued that if there was a binding will and all the details under the above 4 points are there than a contract is there. Some people argue that they have written in the email exchange that no contract has been agreed upon without written form and courts have set that aside as well. Even if one party is argueing that they did not put any "consideration" into the exchange courts have set these clauses aside when there was negotiation and agreement about a commission or a fee or anything that is considered "consideration".
Consideration is the concept of legal value in connection with contracts. It is anything of value promised to another when making a contract. It can take the form of money, physical objects, services, promised actions, abstinence from a future action, and much more. Consideration to create a legally enforceable contract entails a bargained for, legal detriment incurred by the promisee OR a legal benefit to the promisor.
A good paper on the principles of contract can be found here:
lscontent.westlaw.com/images/content/CalamariContracts.pdf
If you want to avoid a contract you need clearly say so and not in the small print and act accordingly. You can not negotiate and find agreement for a deal and all its conditions and believe that there is no agreement if you have not made that clear. The fact that these things are difficult to litigate and expensive does not mean someone will not take you up on it.
Remember that for example:
In the 2010 case of Nicholas Prestige Homes v Neal, the Court of Appeal found that an exchange of emails between an agent and a potential client, with the agent's sole agency terms of business attached to it, created a binding contract when the client responded, 'That's fine, look forward to some viewings: The client was held to be in breach by instructing other agents and liable to pay damages equivalent to the full commission.
In the US there is for example the Electronic Signatures in Global and National Commerce Act (ESIGN). ESIGN ensures that contracts entered into electronically will be legally effective and valid, and that consumers who enter into contracts electronically have the same protections they have when contracting in the "brick and mortar" world. To preserve these consumer protections, ESIGN mandates that information legally required to be in writing can be made available electronically to a consumer only if he or she affirmatively consents to receive the information electronically, the business clearly and conspicuously discloses specified information to the consumer before obtaining his or her consent, and the consumer's consent is conveyed in a manner that "reasonably demonstrates" that the consumer can access information in the electronic form that will be used to provide the information that is the subject of the consent.
So if you are using electronic messages in your business or even privately and negotiate be aware that such exchange can have a legal binding effect.
A contract must contain 4 elements:
An offer made by one party to another
Acceptance of the offer
“consideration” which is given by each party (normally goods or services by one party are exchanged for payment from the other party)
Intention to create a legally binding relationship
Some people use a clause "subject to contract" but courts have argued that if there was a binding will and all the details under the above 4 points are there than a contract is there. Some people argue that they have written in the email exchange that no contract has been agreed upon without written form and courts have set that aside as well. Even if one party is argueing that they did not put any "consideration" into the exchange courts have set these clauses aside when there was negotiation and agreement about a commission or a fee or anything that is considered "consideration".
Consideration is the concept of legal value in connection with contracts. It is anything of value promised to another when making a contract. It can take the form of money, physical objects, services, promised actions, abstinence from a future action, and much more. Consideration to create a legally enforceable contract entails a bargained for, legal detriment incurred by the promisee OR a legal benefit to the promisor.
A good paper on the principles of contract can be found here:
lscontent.westlaw.com/images/content/CalamariContracts.pdf
If you want to avoid a contract you need clearly say so and not in the small print and act accordingly. You can not negotiate and find agreement for a deal and all its conditions and believe that there is no agreement if you have not made that clear. The fact that these things are difficult to litigate and expensive does not mean someone will not take you up on it.
Remember that for example:
In the 2010 case of Nicholas Prestige Homes v Neal, the Court of Appeal found that an exchange of emails between an agent and a potential client, with the agent's sole agency terms of business attached to it, created a binding contract when the client responded, 'That's fine, look forward to some viewings: The client was held to be in breach by instructing other agents and liable to pay damages equivalent to the full commission.
In the US there is for example the Electronic Signatures in Global and National Commerce Act (ESIGN). ESIGN ensures that contracts entered into electronically will be legally effective and valid, and that consumers who enter into contracts electronically have the same protections they have when contracting in the "brick and mortar" world. To preserve these consumer protections, ESIGN mandates that information legally required to be in writing can be made available electronically to a consumer only if he or she affirmatively consents to receive the information electronically, the business clearly and conspicuously discloses specified information to the consumer before obtaining his or her consent, and the consumer's consent is conveyed in a manner that "reasonably demonstrates" that the consumer can access information in the electronic form that will be used to provide the information that is the subject of the consent.
So if you are using electronic messages in your business or even privately and negotiate be aware that such exchange can have a legal binding effect.