Is an Email Legally Binding? Understanding Contract Enforceability

A common and valid question that derives in the start-up community is - Whether or not an email constitutes a legal contract? In short, the answer is yes. Despite being a ubiquitous and simple means of communication, emails can constitute valid legal contracts. However, identifying these is not always as straightforward as one would think. 

This article aims to further your understanding of when an email is legally binding. Furthermore, it is important to keep in mind that the principles below don’t just apply to singular emails but will often likely apply to chains of email correspondence. 

What constitutes a contract?

A contract is a legally binding agreement between parties creating mutual obligations. For a contract to be legally enforceable it must meet certain criteria: (1) offer; (2) acceptance; (3) consideration; and (4) an intention to create legal relations. 

(1) Offer

For an email to be legally binding some sort of offer must be made. An offer is an expression of willingness to contract on certain terms with the intention (actual or apparent) that it shall become binding as soon as it is accepted by the person to whom it is addressed. An offer must be clear, non-ambiguous and capable of acceptance. Also, the terms must not be vague. 

(2) Acceptance

A legally binding email will have some form of acceptance of the offer above. Acceptance of an offer is the clear indication of the offeree's agreement to the terms of the offer, in the manner set out by the offer. They must clearly agree to the original terms for acceptance to have taken place and a valid contract to be constituted.  

If the offeree (the one agreeing) even marginally alters the original proposal, this is not acceptance and in fact a counter-offer. It is fundamental that acceptance is communicated and not just implied. 

You cannot presume that the other party would agree to your offer. Make sure to keep all this in mind when you are liaising with businesses as a simple “Please go ahead…” can constitute acceptance, which accidentally cost Superdrug £1.3 million! 

(3) Consideration

There must be some consideration between the parties for the email to be contractual.

Consideration is the payment or reward for the goods or service. The consideration must amount to value in the eyes of the contracting parties. The consideration must be sufficient but need not be adequate. As long as some type of exchange takes place (usually money in exchange for services and/ or goods) then consideration is met.

(4) Intention to create legal relations

An email contract is only enforceable if both parties intended to create legal intentions. This is assessed objectively, based on the theoretical position of a reasonable individual. Explicitly imply your intent to create legal relations to avoid misconception. Stating “subject to contract” or alternatively stating that this email is not an offer will avoid unwanted negotiations. Businesses contacting each other may have implied legal intentions, thus, explicitly acknowledging whether this specific email constitutes that contract is crucial. 

One singular email may not meet the formalities for a contract, but a chain of emails might do so be cautious of this. If the above criteria is met, across a string of emails, then a contract is formed. Also it is worth noting that a text message is acceptable if all the above criteria is met.

Author: Nadja Forrest -

Author: Nadja Forrest -

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DISCLAIMER

This article has been written by law students for the sole purpose of providing informative insight. The information in this article is intended for educational purposes only and does not constitute legal advice, nor should the information be used for the purpose of advising clients. You should seek independent legal advice before relying on any of the information provided in this article.

Sources

Athena Brands Ltd v Superdrug Stores Plc [2019] EWHC 3503 (Comm)

Treitel, The Law of Contract 13th ed, pp. 9-10