Acceptance of a Contract by Email
Therefore, a contract could theoretically be written on a towel as well as on watermarked paper, provided that the terms have been clearly stated and agreed, and that oral or oral contracts are not unknown (although they are difficult to apply and frowned upon by many). In Forcelli v. Gelco, a representative of Gelco Corporation`s insurance company, offered the plaintiff $230,000 to settle the matter first orally and then repeat it in an email. The plaintiff agreed, but when Gelco attempted to withdraw from payment after winning the case a few days later, the New York Appeals Division decided in a separate case that the email constituted a legally binding contract and that Gelco was required to pay the full amount of the offer. The Tribunal`s judgment was based on the following elements: UCC § 2-201 (formal requirements; Fraud Status) requires that a contract for the sale of goods valued at $500 or more be proven by a memorandum signed by the party against whom enforcement is sought in order to be enforceable.  The question of whether contracts and electronic signatures are valid is largely resolved by the Uniform Law on Electronic Transactions (UETA). Together with its federal counterpart, the Law on Electronic Signatures in Global and National Commerce (ESIGN), UETA and ESIGN, it was clarified that contracts with electronic signatures are not invalid simply because of their electronic form. UETA and ESIGN make electronic transactions just as enforceable as paper contracts with manual signatures.  In other words, among jurisdictions that have adopted the restatement rule, the doctrine of the mailbox rule applies to bilateral contracts, but not to option contracts.
California, in the minority of states, also applies the mailbox rule to option contracts. In Palo Alto v. BBTC Co., 11 Cal.3d 494 (1974), the court held: „In California … The „effective in posting“ rule has received legislative sanction and is the stated policy of that state. As explained above, the notice of exercise of the option, if it is considered the acceptance of an irrevocable offer, is clearly covered by Article 1583. Most people think of contracts as formal agreements that are written and signed by the parties involved, often in the presence of lawyers, but the fact is that a contract is just an agreement between several parties on an exchange of valuables and the physical form of the contract is not so important. Again, this underscores the importance of distinguishing the exact moment of acceptance. In the case of contracts concluded by e-mail, it is not clear whether acceptance takes place at the time of sending the acceptance by the recipient of the destination or at the time of receipt by the tenderer. The legal consequences are enormous. Let us take as an example a sale of goods in which the contract is concluded by e-mail. If we assume that the offer is made by the buyer and the acceptance is made by the seller, sending the seller`s acceptance is the decisive transaction. If the acceptance is to take place with the sending of the acceptance, then the place of jurisdiction of the buyer is the relevant place of jurisdiction, while the opposite is the case if we come to the conclusion that it is the actual access that constitutes the contract.
Thus, there is a theoretical basis for the idea that an agreement of terms in an email, formally stated or not, could constitute a legally binding agreement, and that this theoretical basis was born in the real world by law. However, none of the arguments in favor of the existence of the mail acceptance rule apply to emails. Most importantly, there is no real-time delay between „publishing“ and receiving the email. The type of communication is considered better than immediate and therefore must follow the rules for „virtually instantaneous“ communications: there are many acceptable ways to format your acceptance email as long as it contains the necessary information. Here is an example of an acceptance email with the template above:  For a longer discussion of why the mail acceptance rule should not be applied to emails, see: Simone WB Hill, „Flogging A Dead Horse – the postal acceptance rule and email,“ (2001) 17 Journal of Contract Law 151. Some of the ideas explored in this article are discussed in more detail and depth in this publication. According to the booking rule, the service is a means of acceptance. If A orders 1000 blue Coathangers and B ships them, this shipment is considered to be the sending of the acceptance of A`s offer to purchase the Coathangers. A defective performance is also an acceptance, unless a declaration is attached. For example, if A orders 1000 blue coathangers and B accidentally sends 1000 red coathangers, this is still a contract acceptance. However, if B sends the red coathangers a note they sent them because they ran out of blue coathangers, it is not an acceptance, but an accommodation which is a form of counter-offer.
What do you think of the mailbox rule? Should it be the default rule in contracts? Why or why not? Practical question: Pamela is a musician and author. She proposes devon and mark to sell her copyright on a popular song. Devon abandoned its acceptance of the offer by mail on Friday evening. On Saturday morning, Pamela meets Mark and signs an agreement that gives her the copyright. What is the likely outcome in this situation? For these reasons, it is argued that the postal acceptance rule should not apply to contracts concluded by e-mail.  The exact timing of a contract can be decisive. For example, if the parties agree to purchase an item „at the time of the conclusion of this contract“ at the market price, it is necessary for the performance of this contract to specify the exact time of the conclusion of the contract. Timing may also be relevant in determining whether, for example, a purchase results in a certain levy or allows the buyer to take advantage of a government discount. The law also deals with the time and place of sending and receiving electronic communications. Although this law was not specifically drafted for the conclusion of a contract, any contract concluded by „electronic communication“ (such as e-mail) is necessarily affected. What happens to someone like an employee who seems to be negotiating a contract by email? It is possible that a third party, such as . B a subordinate employee, without real authority, binds an enterprise to a contract if the third party had the obvious authority to do so.
`Where, by its voluntary act, a contracting entity has put a representative in such a situation that a person of ordinary wisdom with knowledge of commercial practice and the nature of the transaction in question is entitled to assume that that representative is authorised to perform a particular act on behalf of his principal after the performance of that particular act, the principal is prevented from doing so against that innocent third party: refuse the representative`s power of execution.  It is important to know when and where a contract is entered into, as this may affect the rights of the parties and the determination of jurisdiction over the contract in the event of a dispute. It is not clear when email contracts are formed. If the postal acceptance rules were applied to e-mail contracts in the same way as the postal service, an e-mail contract would be concluded when the acceptor sends the acceptance by pressing the send button on his computer. If the postal acceptance rule is not applied, the contract is concluded according to the normal rules of the contract when the supplier receives the acceptance. Parties often use email as a means of negotiating an agreement, which is then reduced to a single formalized document traditionally considered a „contract.“ However, what they may not know until a lawsuit is imminent is that their emails can and often create a binding contract. A contract can be created and „signed“ electronically via an email exchange if there is evidence of the intention to enter into an agreement. In cases where a party claims that a contract was entered into through an email exchange, the courts are often called upon to determine whether the email exchange constitutes a binding agreement or simply an invitation to negotiate a formal written contract. This article discusses the factors that determine this outcome.
Recent legislation, namely the Electronic Transactions Act 1999 (Cth), has not provided a definitive answer. In fact, legal intervention in this area, both locally and internationally, was intentionally not binding on this issue. This was done in part „so as not to interfere with the national law applicable to the conclusion of the contract“.  Contrary to this global trend, the United States has at least partially legislated in the form of the Uniform Computer Information Transaction Act (UCITA) (formerly Section 2B of the Uniform Commercial Code) to clarify the issue. There is no good reason to apply the mail acceptance rule to emails. The postal acceptance rule is an exception to the normal contractual principles adopted because of the delay between sending and receiving a letter and because the person who mailed it loses control of it after a letter has been sent. There are no good reasons to extend the mail acceptance rule to a means of instant communication, such as email, especially since the sender of a message is best able to determine whether the message was received or not. . . .