Subject to UETA, a contract can be created by any electronic means, not just by e-mail. Although a text message string may seem occasional and therefore unenforceable, UETA says the opposite. If a text message string contains the necessary contractual language, the text messages are legally binding. If you want to accept legally binding SMS between the landlord and the tenant, it is best to define the protocol in advance and in writing. At the very least, confirm that landlords and tenants are interested in using texts for communication and be consistent in using texts for the agreed uses. Potentially acceptable legally binding texts could be: The Massachusetts Land Court ruled that the text message and letter of intent were sufficient to meet the written requirement of the Fraud Statute. Given that a real estate contract must be drafted under State contract law, the importance of this decision would determine that text messages are legally equivalent to bilateral contracts written in ink and paper. A subsequent decision concluded that the broker who had accepted the contract did not have the authority to do so and therefore reversed the original judgment. But the mutual exchange of details and the intention to act via SMS led the court to consider the February 3 exchange as a valid contract. The short answer is, it depends. There are times when SMS can be legally binding and times when this is not possible. On appeal, the Massachusetts Court of Appeals focused its analysis on whether the letter of intent sent by email, as well as the text message, were sufficient to comply with the Fraud Act, which requires that all land purchase contracts, such as the building in this case, be in writing to be enforceable.
In its decision, the court noted that since the letter of intent detailed the terms of the agreement and the text message was signed by the seller`s broker, a binding contract was created. Remember that a basic binding contract must have four elements: there must be an offer, the acceptance of an offer, a counterparty, and the intention of the parties to create a binding relationship. In St.John`s Holdings, the court held that the fundamental elements of entering into the contract had been met. Since texts and contracts are still an evolving issue in the legal and business world, it is worth resorting to a relatively recent case decided by our own Massachusetts Court of Appeals. In the case where a statute filed a lawsuit, St John`s Holdings v. Two Electronics was negotiating the purchase of a commercial property. The buyer`s broker had sent an unsigned letter of intent as an attachment to the seller`s broker by email. The memorandum of understanding, which the parties wanted to make binding, was to be signed by both parties.
The seller`s broker then wrote a text message to the buyer`s broker requesting that the letter of intent be signed and a deposit be paid. It read: “Steve (seller) wants (the buyer) to sign first with a check, and then he will sign. Usually, the seller is the last or second to sign. I`m not trying to be stupid or opposite, but that`s how it usually works. Can (buyer) sign today and send it to me today. Tim. The buyer then signed the letter of intent and handed a cheque to the seller. However, considering that it had not established a binding contractual relationship with the buyer, the seller accepted a third party`s offer for the property and refused to countersign the letter of intent in accordance with the buyer`s instructions. The buyer believed that it had entered into a binding contract with the seller and had attempted to assert its legal interests in Massachusetts state court. As more and more people negotiate documents via email on their phone or tablet, it may be time to include a line in your auto-signature that says, “All negotiations are subject to a contract,” but that probably wouldn`t be enough if you indicate in the body of the email that you intend to be linked to the conversation.
As more and more transactions are made by text message, new legal issues will follow. Just explore these statistics for a while: in 2017, 8 trillion texts a day were sent worldwide. By the end of 2013, six billion text messages had been sent daily in the United States alone. Between 2011 and 2014, global text usage increased by 140% in two and a half years. Many now refer to SMS as the new email because of its speed. In fact, faster means everything in today`s business world and this is where SMS has a distinct advantage over email. In the business world, the advantage of SMS is obvious: faster reading, faster range, no subject line required, more personal and eye-catching. Right now, Massachusetts is the only jurisdiction that actually has a reported case in this area. I suspect that further litigation will erupt for the simple reason that business transactions are evolving rapidly and the use of SMS as a mechanism for closing transactions will continue at lightning speed. Think as a business owner every time you send an SMS, tweet, or email BEFORE YOU SEND.
If you need to use SMS to complete a transaction, it is imperative that you add a language that clearly indicates that a contract cannot be created by your text. Also, and perhaps most importantly, you need to find a way to get all the texts that naturally tend to be deleted. If your business plans to enter into text messaging transactions, you need to find a way to secure your text communications in the event of a potential future legal issue such as the one that occurred in St.John`s Holdings. At Katz Law Group, we have helped many companies ensure that their texts do not inadvertently create contracts. We can adapt the language to your company that will prevent you from respecting the contract and will allow you to correspond freely without having to think twice about the effects of such communication. Do not hesitate to call us at 508-480-8202. It is important to avoid accidental text messages, which can become legally binding. .