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Did your text just create a contract?

Most contracts used in business and commercial dealings tend to be carefully drafted, with the assistance of lawyers. While some may be relatively simple, others involving complex transactions may stretch across hundreds of pages. In Minnesota, oral contracts may even be valid for some transactions.

But modern technology can affect the way in which we look at behavior without actually changing that behavior. A case from Massachusetts recently found that an email exchange had created a binding contract for the sale of land. The parties to that exchange may not have realized they were creating a contract, but if they had stepped back, they may have grasped that their trading email was similar to an exchange that could have occurred face to face across a negotiating table.

While not binding on a court in Minnesota, for any business, rulings like this should serve as a warning that they need to examine their relationship to modern technology, such as email, cell phones and texting. None of these practices are going away, and they will likely embed themselves more deeply into the fabric of most commercial dealings.

This means you need all of your employees, managers and other principles to understand their use of some of these instruments can create binding legal agreements. Most of the time, this will be to your advantage as it can speed the completion of a project or a deal.

However, if agreements are reached by happenstance or inattention, the consequences can be damaging and expensive to your business.

Source: Masscases.com, "ST. JOHN'S HOLDINGS, LLC v. TWO ELECTRONICS, LLC.," COMMONWEALTH OF MASSACHUSETTS, THE TRIAL COURT, LAND COURT DEPARTMENT, MISC 16-000090, April 14, 2016

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