Texting Your Way into an Unwanted Binding Real Estate Contract

Before you send that text, think to yourself: This could be interpreted as a contract.

Many people at some point in their lives have entered into an agreement or a contract. As such, most people know that most contracts have to be in writing in order to be enforceable. But can a simple text message with emojis (as most young people call them) and other texting slang phrases constitute a valid contract? Some courts say absolutely yes.

With today’s rapidly changing technology, courts are finding themselves in need of some adjusting. Courts all over the country and even the world are starting to view these casual exchanges between sellers and buyers as legally binding contracts, even if they are not signed.[1]

But even if you add a boilerplate paragraph at the end of the email suggesting that the terms are subject to a written agreement, courts might still consider the email exchange as a valid contract because your actions (or words) might indicate otherwise.[2]

Recently, one court determined that an email exchange can be considered a legally binding contract because the parties intended to enter into the terms suggested in these text messages and your phone number or even the “From:” line in your email could suggest a signature.[3]

In another case, a Massachusetts court in St. John’s Holdings LLC v. Two Electronics, LLC, 2016 Mass. LCR LEXIS 49 (Mass. Land Ct. Apr. 14, 2016) determined that a text message exchange between a buyer and a broker constituted a valid contract because the broker “signed” his name. The judge interpreted the broker’s name at the end of the text message as a signature.[4] Other courts have even ruled that a signature is not required to form a binding contract. For example, the court in CX Digital Media, Inc. v. Smoking Everywhere, Inc., 2011 U.S. Dist. LEXIS 29999 (S.D. Fla. Mar. 23, 2011) found that a valid contract is formed by the mere fact that you can interpret intent and counteroffers in the text message exchange. [5]

Similarly, a court in the United Kingdom, in Golden Ocean Group Ltd. v. Sagacor Mining Industries PVT Ltd., [2012] EWCA Civ 265, held that a series of emails constituted a valid agreement because the parties intended to be bound and “if the person puts his name on an email” it shows that he intends to take responsibility for the contents of the email.[6] Most often, if the terms are discussed throughout the email or text message exchange, the court will likely look at all of the messages, put them together, and create a contract.[7]

So before you begin a “texting relationship” with a potential buyer or seller, ask yourself whether it is feasible to meet in person to discuss the terms and then put them in a formal writing. If you send emails or texts, always include a disclaimer that they are “negotiations only” and the negotiated terms are not valid until there is a signed written agreement.