Making Contracts By Email

With emails being the preferred method of business communication, I’m often asked if they can be relied upon to prove the existence – or more commonly, non existence! – of a binding contract.  The short answer is that email is just another method by which the terms of a contract can be communicated and agreed, and generally unless you can show that the email has been deliberately “doctored” or that the chain of communication through email correspondence has been interfered with, then email correspondence will be good evidence of agreeing a contract.

You do, however, need to be wary of what your email says.  In a recent case (Caroline Gibbs v Lakeside Developments Ltd [2016]) the High Court had to consider a chain of email correspondence where the parties had agreed to settle a dispute between them. One party sent an email to the other setting out what they wanted and by when.  The second party replied saying they accepted, but attaching a document which included a different date.  In this case, the court said this second email was a counter offer.  So what?  Well, if an offer is not accepted, and the second party’s communication is deemed to be a counter-offer, the original offer can be withdrawn.  The effect of this is that the parties may find themselves back to square one without any agreement.

The moral of the story here is that to minimise your contractual risks, treat your email communications as if they were letters sent out on your letterhead, signed by a director.

If you would like more information, please contact Jane Rudge (jrudge@thursfields.co.uk / 0121 227 3885) or Stuart Price (sprice@thursfields.co.uk / 0121 227 3850)