Digital communications and contracts. Best Practices

CONTRACT FORMATION Copyright. 2020. Law Office of Giselle Ayala Mateus. www.ayalamateus.com

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• The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter. No reader, user, or browser of this site should act or refrain from acting on the basis of information on this site without first seeking legal advice from counsel in the relevant jurisdiction. Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.

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CONTRACT IS A MATTER OF STATE LAW • The first thing to remember is that contract is matter of state law.

Consider: • The place of performance.

• The law of the contract.

• The language of the contract.

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A CONTRACTS IS THE RESULT OF… • Offer • Acceptance

• Consideration

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What is an offer?

An invitation to enter into a contract, which creates upon the receiver the expectation that the only step left is his performance or a return promise.

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What is an offer?

Offer. Invitation to a proposed transaction. An email, a conversation, a text message, a presentation.

Receiver is expected to respond. Action or promise.

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Exchange of expectations The negotiation process

Offer

Acceptance Reliance

Preliminary negotiation Copyright. 2020. Law Office of Giselle Ayala Mateus. www.ayalamateus.com

What is acceptance?

A statement or conduct which communicates to the sender of the offer that there is agreement to the terms of the offer and a firm intention to contract.

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The negotiation process • The law and the courts consider the communication between the parties.

• The parties’ words.

• Sometimes…

Course of performance, course of dealing or usage of trade…

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Words matter • “Subject to agreement” • “I reserve final determination for tomorrow.”

• “Subject to written confirmation” • “Subject to your response before…”

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Consider this when interacting with clients, business partners or other parties

WORDS ORDINARY MEANING

COMMUNICATIONS/ INSTANCE RESPONSE OR NOT

NUMBER OF INTERVENING PARTIES

COMPLETENESS OF TERMS

LOCAL USAGES

NATURE OF THE SUBJECT MATTER

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SOCIAL RELATIONSHIP

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Best practices for contracting present parties Copyright. 2020. Law Office of Giselle Ayala Mateus. www.ayalamateus.com

Is an oral agreement an enforceable contract?

May be…

…This may be a matter of evidence…

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• In order to ensure a meeting of the minds as to the parties’ respective obligations, it is certainly preferable to have a contract that is reduced to a signed writing.

• However, a contract need not always be in writing to be enforceable in New York. A contract is binding if there is an offer, acceptance, consideration, mutual assent, an intent to be bound, and both sides agree on all the essential terms. While a fully executed document is the most concrete way to prove the existence of a contract and its terms, parties can enter into a binding contract without memorializing their agreement in the form of a signed, written document.

By choice or through inadvertence. Stewart D. Aaron & jessica caterina

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New York Statute of Frauds As a matter of state law, unlike other states, NY considers a limited list of agreements that must be in writing.

01

02

03

04

05

Contracts that cannot be performed within one year.

Special promises to answer for another’s debt

Promise to pay a debt discharged in bankruptcy

Insurance

Contracts involving real estate

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Email and electronic signatures • It is generally accepted that an email or electronic signature can satisfy the writing and subscription requirements of the Statute of Frauds.

• The Federal E-Sign Act (15 U.S.C. § 7001) • New York’s Electronic Signatures and Records Act (ESRA)

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What is a signature?

An electronic sound, symbol, or process, attached to or logically associated with a contract or other electronic record and executed or adopted by a person with the intent to sign the record.

15 U.S.C. ยง 7006(5) (2012) N.Y. STATE TECH. LAW ยง 302(3) (McKinney Supp. 2016).

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In case of litigation court would look: Content and language are important, but when it comes to emails court have looked whether the sender typed his name or “signature� as a manifestation of intent to be bound.

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When signature is not enough…

• Contracts that require a formal act and a simultaneous execution before a notary public.

• Communications “subject to formal confirmation” • Communications that do not define the material terms of the agreement.

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Exchange of messages •

In Agosta v. Fast Systems Corp. the court determined there was sufficient evidence of a legally binding agreement where the parties did not execute a formal contract but continued to communicate via email regarding the contract’s terms.

•

While there was no integrated, written agreement between the parties, the parties’ course of conduct, including the email exchanges, inferred an intent to enter into a contract. Additionally, the court held that the parties’ signed and unsigned writings, when read together, were sufficient to establish the parties’ agreement.

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Contract best practices Copyright. 2020. Law Office of Giselle Ayala Mateus. www.ayalamateus.com

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1. Don’t let technology (or anybody else) fool you

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2. Date the Contract, Document or Communication

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3. Both parties should execute the contract

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4. Initial lastminute handwritten changes to the contract

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5. Sign in your correct capacity

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6. Check the other party’s authority to sign

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Best practices dealing online or through technology Copyright. 2020. Law Office of Giselle Ayala Mateus. www.ayalamateus.com

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Put the person signing on notice that they are entering into a binding agreement so that there is no confusion.

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Provide the person signing with the ability to opt out of an electronic contract and use a paper version.

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Maintain complete and accurate records of the electronic transaction.

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Conclusion “a party that does not wish to be bound at the time of the preliminary exchange of letters can very easily protect itself by not accepting language that indicates a ‘firm commitment’ or ‘binding agreement.’” Judge Level Teachers Ins. & Annuity Ass’n of Am. v. Tribune Co., 670 F. Supp. 491, 499 (S.D.N.Y. 1987).

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Credit to

• Photos by Jamie Street, Kelly Sikkema, Kate Macate, Christian Wiediger, Марьян Блан | @marjanblan, Ulises Baga and JESHOOTS.COM at Unsplash.com

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LAW OFFICE OF GISELLE AYALA MATEUS

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Copyright. 2020. Law Office of Giselle Ayala Mateus. www.ayalamateus.com

LAW OFFICE OF GISELLE AYALA MATEUS • Giselle has served as counsel and representative for her clients on issues of business visas, adjustment of status, asylum application, work visas, interview with immigration officials, presentation and validation of foreign documents, as well as review and drafting of commercial contracts, creative developments, transfer of intangible rights and business formation in the United States. Likewise, she has worked as a simultaneous interpreter on family and housing proceedings, immigration, and application for public benefits.

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