Working from home has become the new normal for many professionals, and with it has come an increased reliance on email to conduct business until it is safe to hold face-to-face meetings again.
This uptick in email correspondence, and in particular email negotiation, provides an appropriate time to review best practices regarding electronic correspondence and South Carolina contract law.
Contracts require far less formality to be binding agreements than many people realize. In South Carolina, an enforceable contract generally only requires three elements—offer, acceptance and consideration. Consideration can be thought of as the requirement that each party must obtain a benefit from the contract—the potential problem areas for email negotiators are the offer and acceptance elements.
The person making an offer is the “offeror,” and the person accepting an offer is the “offeree.” Under the law, an offer has been made if a reasonable person in the offeree’s position would understand that accepting the offer would conclude the bargain. The actual intention of the offeror does not matter—the law only looks to what a reasonable person in the offeree’s shoes would believe.
This is quite important for the email negotiator. If a message would lead a reasonable person to think there is an offer on the table, then this is a valid offer regardless of whether the sender meant to make an offer.
Best Practice: An email offeror should always try to read correspondence from the offeree’s perspective before pressing send. If the intent could be unclear, an email sender who does not intend to make an offer should write in the email, “This is not an offer,” or “Here are some general terms that could be acceptable to me, but I am not making an offer right now.” This language might seem stilted, but it will likely protect the sender from making an inadvertent offer.
To constitute a contract, there must be an acceptance of the offer. The rule regarding acceptances follows the rule regarding offers—there is an acceptance if a reasonable person in the offeror’s position would understand that the offeree is accepting the offer. Again, the actual intention of the offeree does not matter—acceptance can be binding even if the offeree did not mean to accept the offer.
Further, the law does not always require that an acceptance be verbal or written. Unless the offeror has specifically requested verbal or written acceptance, the law will infer acceptance if the acts and conduct of the offeree indicate that acceptance has taken place. So, both in cyberspace and in the field, the offeree should be careful that his or her acts do not manifest an unintentionally implied acceptance.
Best Practice: An email offeree should review his or her correspondence before sending it to make sure no reasonable person would understand there is an acceptance. “This is not an acceptance,” or “I would like to negotiate further,” leaves little doubt. Moreover, the offeree should send such a message before undertaking any action that a reasonable person would understand as an implied acceptance.
Emails as Signed Statements
While many oral contracts are enforceable in South Carolina, some contracts, including the transfer of real estate and the sale of goods for more than $500, require a signed statement to be enforceable. Remote workers negotiating these types of contracts should be wary, as South Carolina has adopted the Uniform Electronic Transactions Act (UETA).
Under the UETA, a contract cannot be denied legal effect solely because an email is used in its formation. Further, the law provides (i) that an electronic record like an email satisfies any legal requirement that a contract be in writing and (ii) an electronic signature, like that at the bottom of an email message, satisfies any legal requirement requiring a signature. Some courts have even held that the sender’s name in the “FROM” block of an email constitutes a valid signature.
The general thrust of the UETA is that the law makes no distinction between a traditional contract with a wet-ink signature and a contract formed by email transmission. As long as there is an offer, acceptance and consideration, then an email or series of emails will likely constitute a binding agreement in South Carolina.
Best practice: It is tempting to think of emails as informal updates punctuating daily professional life, particularly as one works from home. Sometimes, even professional emails are dotted with emoji smiley-faces and inspirational quotes; however, this does not diminish their formality in the eyes of the law. To avoid inadvertent contract formation, the remote worker should stay vigilant and treat email communications, particularly email negotiations, with the same attention and clarity as a professional, written letter. When in doubt, especially in situations in which the law demands a signed written contract, the overarching best practice is to pick up the phone and call your negotiating counterpart.
Please contact Phillips or your HSB attorney with any questions or comments.