It is no surprise that it is common for agreements to be made electronically via e-mail given the “on the go” lifestyle of many. What if you found yourself liable for something simply because you had typed your name at the end of an email?
This is the situation that a businessman recently found himself in. He was in the midst of a lawsuit brought by the other Members of an LLC, of which he was the Manager. Through various email exchanges with opposing counsel of those Members, he agreed to whatever settlement offer was included in the email. He stated that he agreed, although with some hesitation, but did not think the email exchange would amount to a formal agreement since he did not sign anything. Unfortunately for him, he did write his name at the end of the email, and opposing counsel relied on this as an electronic signature, and thus, as evidence of his agreement.
What ensued was a rather lengthy court battle to determine whether or not simply writing your name at the end of the email would constitute agreement to the terms in the email and thus an enforceable contract. Opposing counsel relied on Cal. Civ. Code Sec. 1633.1, et seq., which states that “a record or signature may not be denied legal effect or enforceability solely because it is in electronic form”.
The Court of Appeal in the First District of California held that because the businessman did not intend to be bound by what he wrote in the email, simply writing his name at the end of the email did not constitute a signature. Consequently, placing his name at the end of the email did not cause the email to suddenly become an enforceable contract.
The lesson to take away from this situation is given the digital age we are in, it is not uncommon for any party to rely on what we send electronically. Luckily for the businessman, the court delved deeper into the email exchange to make certain of his liability. We urge all of our clients to make sure you have stand-alone written agreements instead of exchanging emails to form any type of agreement. If your business needs help with drafting such agreements, please contact us for a complimentary consultation. 818.956.9200
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