Briefcase: Email Contracts

Guest: Professor D.C. Toedt

Can you inadvertently enter into a binding contract just by exchanging emails? D.C. Toedt, with The University of Houston Law Center, teaches contract drafting and explains what the courts have said on this question.

“Let’s look at a 2017 case from here in Houston,” Professor Toedt said. “John invested in a new company started by a man named Prentis. But things did not go well. The two men orally agreed that Prentis would personally repay John. But Prentis never did, so John sued him for breach of contract. Prentis said wait, I can’t be liable because I never signed anything. But John won anyway because he’d played it smart.”

“After John and Prentis reached their oral agreement, John sent Prentis an email that summarized the agreement,” Toedt continued. “Prentis responded with his own email, which said, ‘We are in agreement.’ The court said that was enough to create a binding contract.”

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