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People buy many things online these days: books, airline tickets, stocks and Internet access. To make these purchases, consumers are daily forming contracts by exchanges of e-mail. Transactions usually are accomplished by giving a credit card number online and agreeing with a keystroke or mouse click to pay a set price for a particular good or service. With hundreds of thousands of transactions occurring this way, it is surprising that as of yet, it appears no U.S. court has issued a published opinion on whether contracts formed via e-mail are binding.
Contrary to the common misconception that contracts must be in writing to be legal, many oral contracts are enforceable. However, there are certain types of contracts that must be in writing and be signed to be legally binding. The traditional rule stating that certain contracts must be in writing is the Statute of Frauds, which evolved centuries ago. Agreements that must be in writing, according to the Statute of Frauds, include those for the sale of real estate, those for goods worth $500 or more and those which will not be completed within a year. In modern times, lawmakers also have required certain other types of agreements to be in writing. For any of these, the question now is whether e-mail is a valid medium for such contracts.
The probable answer may be found by looking at how the courts have received new technologies in the past. As early as the 1860s, courts in the United States began to adopt the view that the writing and signature requirements of the Statute of Frauds could be met by means other than ink and pen put to paper. The first new technology to stretch the interpretation of what constituted a "writing" was the telegraph. Soon after it was invented, people began using telegrams to contract for sales of goods and services. Inevitably, disputes arose over whether a particular agreement reached by telegraph was legally binding. An early opinion to conclude that such exchanges did constitute signed writings was the New Hampshire case of Howley v. Whipple, in 1869.
With a literary flourish, the court found that a telegraph contract was as valid as one formed with paper and pen. "Nor does it make any difference that in one case common record ink is used, while in the other case a more subtle fluid, known as electricity, performs the same office," the court said.
With the advent of each new means of electronic communication, courts have been faced with the same question: was a contract formed in the new medium as legally binding as a signed agreement on paper? Successively, courts concluded that agreements formed by teletype, mailgram, and most recently facsimile, all can constitute binding, written contracts. But the closest any court has come to deciding the validity of contracts by e-mail was the 1992 decision in Edward R. Boudreau v. Scitex Corp. Ltd., where a federal district court in Massachusetts concluded that exchanges of e-mails, facsimiles and phone calls over a six-month period created a binding employment contract.
In evaluating a new communications medium as a means of forming written contacts, courts have focused on two factors: 1) Can the communication be converted to a printed, tangible form? and, 2) Does the mark made to signify a signature indicate the sender intended to bind him or herself to a written contract? Where both of these features exist and other traditional contract requirements are met, courts tend to conclude that a binding contract was made, whether by ink or electricity.
One question still to be solved when assessing contracts formed by e-mail is how a signature can be verified. In evaluating other forms of electronic communications the courts have recognized that signatures can be forged, whether written in ink or sent by telegram or facsimile.
In each case, when the validity of a contract is contested, courts look to evidence from a handwriting expert or other witness with specialized knowledge of the medium to determine whether a given signature is valid. The authenticity of several e-mail messages was in dispute in the prosecution of confessed child murderer Jeremy Strohmeyer, who prosecutors say chatted online about his sexual fantasies less than two days before 7-year-old Sherrice Iverson was slain in a Nevada casino. Defense attorney Leslie Abrahamson claims her client didn’t write the e-mails.
Various solutions for the evidentiary problem of validating signatures on e-mail contracts have been proposed, including digital signatures, passwords and other security devices. But critics suggest these extra measures are inefficient and subject to forgery. Ultimately, to verify an e-mail signature, there must be a reliable means of proving a connection between the message and the purported sender. As yet, there is no consensus on the most effective and economical method for accomplishing this goal.
Pamela Lawton Wilson was a legal affairs reporter in San Diego from 1989 to 1993. She is now an associate at the civil firm of Sullivan Wertz McDade and Wallace.
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