In Court: E-mails Can Be Binding

This article was published on: 06/01/2008


In Court

Dash It Off; Repent Later
Basis Technology Corp. v. Amazon.com Inc. Massachusetts Appeals Court, 2008

BY MARIWYN EVANS

Its quick and informal nature is often the appeal of e-mail communications for busy professionals. But quick and fast doesn’t negate legally binding, as online bookseller Amazon learned the hard way.

In the case, Amazon and Basis Technology Corp., a software provider, were negotiating a settlement in a lawsuit in which Basis claimed that Amazon had not paid for certain work it performed. Upon receiving a summary of the general terms of the settlement agreement the parties had discussed, an attorney dashed off a quick e-mail response of “correct.”

The next day, attorneys for both parties told the trial judge that the parties had reached a settlement.
When Amazon later disputed the terms set down in the e-mail, Basis filed a motion seeking enforcement of the “agreement.” With some minor modifications, the trial court and later the appeals court concurred that Amazon had approved the agreement even though the company argued that it had not intended to be bound by the e-mail’s terms.

So be sure you read the fine print — electronic or otherwise — before you hit that send button.

Repeating an Error Doesn’t Make It Yours
Crawford v. Mintz Jr. North Carolina Court of Appeals, 2007

Sharing MLS data that contains errors with a buyer client doesn’t make you guilty of negligent misrepresentation, even if the buyer relied on that erroneous information in making a purchase. In the case, a buyer’s representative printed out listing information on a property in the MLS that indicated the home was connected to the city sewer.

The agent presented the information but failed to include the disclaimer from the bottom of the MLS listing, which stated: “information deemed reliable but not guaranteed.” After a septic tank leak two years later, the buyers sued the seller, the brokerage, and the salesperson for negligent misrepresentation.

The trial court found the parties liable since the buyer had justifiably relied on the information in making the purchase. The appeals court reversed the verdict, stating that even though the salesperson had omitted the disclaimer that might have alerted the buyer to independently investigate, the brokerage and salesperson couldn’t be liable, since neither created the MLS listing sheet.

For information about Real Estate Brokerage Essentials: Managing Legal and Business Issues, go to REALTOR.org/storeand search for item #126-358.