E-Mail Messages Can Create Binding Contract

The Michigan Court of Appeals recently held that a settlement agreement was binding, even though it was negotiated through a series of -email messages exchanged between the plaintiff’s attorney and the defendant’s attorney. In an e-mail message, the plaintiff’s attorney stated that he had confirmed his client would accept payment of $48,000 in exchange for a release of all possible claims. In response, the defendant’s attorney stated that the offer was accepted. Documents reflecting the agreement were prepared, but the plaintiff refused to sign.

The Court of Appeals held that the e-mail messages between the parties constituted a binding settlement agreement. The Court determined the e-mail from the plaintiff’s attorney constituted a settlement offer, and the e-mail from the defendant’s attorney constituted acceptance of that offer. Therefore, a binding contract was created between the parties, even though it was done through e-mail messages.

The Court also held that the e-mails satisfied the requirement that the agreement be in writing and “subscribed” by the party. The e-mail messages contained the ‘signature” of the attorneys because each attorney typed or attached his name at the end of the e-mail message. The Court noted, however, that it is not sufficient to include the attorney’s name at the top in the e-mail heading; a signature must be at the bottom of the e-mail to be valid.