Commercial Litigation and Arbitration

When Does an Email Satisfy the Statute of Frauds?

New York’s statute of frauds (General Obligations Law § 5-701) requires a signature:

a. Every agreement, promise or undertaking is void, unless it or some note or memorandum thereof be in writing, and subscribed by the party to be charged therewith, or by his lawful agent, if such agreement, promise or undertaking:

1. By its terms is not to be performed within one year from the making thereof . . .

4. For the purposes of this subdivision, the tangible written text produced by telex, telefacsimile, computer retrieval or other process by which electronic signals are transmitted by telephone or otherwise shall constitute a writing and any symbol executed or adopted by a party with the present intention to authenticate a writing shall constitute a signing.

The contract in SD Protection, Inc. v. Del Rio, 498 F.Supp.2d 576 (E.D.N.Y. 2007), involved a five-year non-compete, triggering the statute of frauds. It was uncontested that neither party signed the Contract. The plaintiff argued that by writing "your offer is accepted" and then "Forever at your service. Eddie" in an email, the defendant ‛effectively signed the contract under Section 5-701(a)(4).“ The District Court concluded that discovery was necessary

to determine whether [the defendant] had "a present intention to authenticate a writing" under Section 5-701. The fact that the Contract includes signature lines that were never signed suggests that [he] lacked such an intention. However, further extrinsic evidence could indicate otherwise, such as evidence regarding the relationship between the parties before the Contract was written or additional email communications between the parties. Any attempt to decipher [his] intentions at this stage would be little more than guesswork.

The statute and the case raise interesting issues. Suppose ‛Eddie“ had been written in a script font. Would that have shown such an intention? Would the fact that the defendant performed under the contract reflect such an intention? What if the plaintiff changed position in reliance on the exchange of emails? Does anyone deal in paper any more? Electronics produce interesting issues.

Share this article:

Facebook
Twitter
LinkedIn
Email

Recent Posts

Archives