Email Exchange May Be A Contract
03/09/10
A recent Missouri case found an exchange of two e-mails constituted an offer and acceptance such that the parties entered into a binding contract. The court found that because of the subject matter of the emails, the statute of frauds, R.S.Mo. § 432.010, did not apply. As such, email communications containing monetary offers and acceptances of those offers between parties may constitute enforceable agreements under Missouri case law.
In St. Louis Union Station Holdings, Inc. v. The Discovery Channel Store, Inc.,1 Union Station (landlord) and Discovery Channel (tenant) were parties to a lease. When Discovery Channel closed its shop and abandoned its premises at Union Station, landlord filed suit against Discovery Channel seeking rent due under the lease. Union Station’s attorneys sought to settle the lawsuit, using email to communicate their client’s monetary counter-offer to Discovery Channel’s attorneys. Discovery Channel accepted Union Station’s counter-offer in an email reply to Union Station’s email.2
A few months later, when Discovery Channel sought to enforce the settlement agreement, Union Station disagreed. Union Station argued in part that there was no enforceable settlement agreement between the parties because (i) there was no written termination of the lease in violation of the statute of frauds; and (ii) there was no offer or acceptance, and no meeting of the minds of the parties.3
The Missouri Court of Appeals, Eastern District, upheld the circuit court’s decision that a valid and enforceable settlement agreement existed between the parties. First, the court held that the statute of frauds was inapplicable to the settlement agreement between the parties, even though the action underlying the email communications pertained to the lease between the parties. The court, noting that the subject of the purported contract was the settlement agreement – not the lease.
Second, the court determined that the required elements of a contract were contained in the emails exchanged between the parties. Missouri courts have held that contract law governs the question of whether the parties entered into an enforceable settlement agreement. Therefore, one must show offer, acceptance and consideration.4 The court found a valid offer in Union Station’s email to Discovery Channel, and Discovery Channel’s acceptance of the offer in its reply.5
Therefore, although a modification to a lease requires “a writing,” an agreement to settle a lawsuit for monetary damages pursuant to the lease does not. The parties to such an agreement may validly (and enforceably) reach and communicate their agreement to one another via email.
For more general information, visit Business Litigation, James F. Freeman III or Holly Fisher.
1 2009 WL 4823866 (Mo. Ct. App.2009).
2 Id. at *1
3 Id.
4 Id. at *2.
5 Id. at 3*.
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